As a seasoned crypto investor with over a decade of experience navigating the ever-evolving landscape of blockchain and digital assets, I find the recent decision by Frax Finance to adopt BlackRock’s BUIDL as a reserve asset for their stablecoin, Frax USD (frxUSD), an intriguing development.
The decision by the Frax Finance community to incorporate BlackRock’s USD Institutional Digital Liquidity Fund Ltd (BUIDL) as a reserve asset for the newly launched stablecoin, Frax USD (frxUSD), has now been executed.
Since December 26th, votes from token holders of the decentralized finance (DeFi) lending protocol, FXS, have uniformly supported the proposal. The same sentiment is reflected across all comments in the discussion forum. The vote will continue to be open for acceptance until January 1st, 2025.
The summary suggests that if the proposition for Frax USD is approved, it may bring about advantages such as generating yield possibilities, enhancing market liquidity, facilitating transaction options, and minimizing counterparty risk thanks to its association with BlackRock.
During the conversation on Dec. 22 regarding Securitize’s initial proposal, it was mentioned that a user named achaffee believes this action could serve as a link between conventional finance and Decentralized Finance (DeFi).
As per Achaffee’s explanation, tokenized real-world assets (RWAs) serve as a “strong connection” between conventional finance and Decentralized Finance (DeFi), allowing for high-quality investments to be integrated onto the blockchain.
Over the last nine months, significant entities such as Decentralized Autonomous Organizations (DAOs) and decentralized protocols have issued substantial Requests for Proposals (RFPs) in public forums, aiming to find the best strategies to strengthen their financial reserves or support their stablecoins using Reserves of Widely Accepted assets.
They pointed out that these initial expeditions symbolize a substantial development in the methods used by autonomous parties to handle their financial assets, as well as their approach towards multi-sector investment strategies.
As an analyst, I’m thrilled to share that within just four short months following its launch on March 15th, our project, BUIDL, has successfully amassed over half a billion dollars in assets under management (AUM). This rapid growth is a testament to the trust and confidence our community has placed in us.
This investment maintains a constant value equivalent to the U.S. dollar, and it distributes accumulated dividends to shareholders on a monthly basis thanks to its collaboration with Securitize. The fund primarily focuses on purchasing U.S. government bonds.
Based on information from Dune Analytics, which was collected by 21Shares, there is currently approximately $3.4 billion in value of tokenized government bonds on the blockchain.
It’s not just Frax considering the possibility of creating a stablecoin supported by BUIDL; Ethena Labs, developers of Ethena and creators of the USDe synthetic dollar, announced on September 26 that they are developing a BUIDL-backed stablecoin as well.
The digital currency known as USDtb, which was introduced by Ethena, is distinct from their USDe product. USDtb officially launched on December 16th and currently holds a total value of $89 million, as indicated by information from DefiLlama.
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2024-12-27 09:15