Securitize, Elixer launch DeFi vaults for Blackrock’s BUIDL

As a seasoned analyst with over two decades of experience in traditional finance and blockchain technology, I find this latest collaboration between Securitize and Elixer to be an intriguing development. The launch of liquid staking tokens (LST) for tokenized securities, including Blackrock’s BUIDL, is a significant stride towards the seamless integration of traditional assets into decentralized finance (DeFi).

In a joint announcement made on November 19th, Securitize and Elixer unveiled plans to introduce a Liquid Staking Token (LST) for tokenized securities. This includes Blackrock’s on-chain money fund, BUIDL, as stated by the cryptocurrency platforms.

Created by Elixer, a blockchain network specifically tailored for cryptocurrency exchanges, the deUSD RWA Institutional Program, as stated in a press release by Securitize, provides increased yield possibilities and compatibility with more than $1 billion worth of Real World Assets (RWAs) issued by Securitize within the decentralized finance (DeFi) sector. In simpler terms, this program allows for enhanced earning potential and seamless integration of over $1 billion in Real World Assets (RWAs) issued by Securitize across various DeFi platforms.

In a post on the X platform on November 19th, Elixer explained that DeFi vaults, built according to Ethereum’s ERC-4626 standard, provide an effortless way for Blackrock BUIDL and other RWA holders to interact with DeFi, using deUSD as the main currency.

Securitize has tokenized the BlackRock USD Institutional Digital Liquidity Fund (BUIDL), which is essentially a money market fund focusing on investments in short-term U.S. Treasury bills (T-Bills) and other low-risk, income-generating securities.

The DeFi vaults issue BUIDL depositors LSTs called sBUIDL, Elixer said.

Now, holders of BUIDL tokens can create sBUIDL and utilize it for DeFi transactions via deUSD. This process allows them to keep earning the original yield. According to a recent announcement from RWA.xyz, a platform that manages RWA data, this move has made available $1 billion in liquidity for these transactions.

Starting November 13th, Blackrock expanded the availability of its BUIDL platform onto multiple other blockchain networks such as Aptos, Arbitrum, Avalanche, Optimism, and Polygon.

Carlos Domingo, Securitize’s CEO, stated that with these new chains, we can anticipate an influx of investors seeking to utilize the underlying technology for enhanced efficiency across various tasks that were previously challenging.

The interest in digital tokens representing real-world assets, particularly those providing lower-risk returns similar to Treasury bills and money market tools, is rapidly increasing.

As reported by RWA.xyz on November 19, the total value locked in tokenized U.S. treasury debt amounts to around $2.4 billion. The BUIDL fund is the largest among these, managing assets worth the most, followed closely by Franklin OnChain US Government Money Fund (FOBXX), with approximately $540 million and $450 million in assets under management respectively.

Employing BUIDL in various blockchain networks allows it to be integrated into prominent financial services and structures based on blockchain, as stated by BlackRock.

Globally, the tokenized Representation of Widely Available Assets (RWAs), ranging from Treasury Bills to artworks, presents a potential market value of approximately $30 trillion, according to Colin Butler, Polygon‘s head of institutional capital, as he shared with CryptoMoon in August.

According to the U.S. Department of the Treasury’s Q4 2024 report, tokenization could enhance liquidity in the trading of Treasuries by minimizing operational and settlement complications.

2024-11-19 18:34

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