BlackRock Expands Tokenized Money Market Fund BUIDL Across New Blockchains

BlackRock, the world’s largest asset manager and a key investor in tokenization platform Securitize, has announced the expansion of its tokenized Money Market Fund onto five additional blockchain networks: Aptos, Arbitrum, Avalanche, Optimism, and Polygon. Initially launched on the Ethereum network in March 2024, the BlackRock USD Institutional Digital Liquidity Fund (BUIDL) will now reach various ecosystems within decentralized finance (DeFi).

Four of the newly added blockchains - Arbitrum, Avalanche, Optimism, and Polygon -are Ethereum Virtual Machine (EVM) compatible, which allows them to use Ethereum’s programming language, transaction functionality, and standards. These Layer 2 networks are designed to address Ethereum's scaling challenges by increasing transaction speed and reducing costs.

Aptos stands apart as the only non-EVM blockchain in this expansion, making its integration with BUIDL a notable milestone as it gains recognition as an institutional-grade blockchain.

By integrating BUIDL with additional blockchains, BlackRock is strategically positioning its tokenized fund to serve as a key asset within these ecosystems. This expansion opens opportunities for BUIDL to be utilized by protocols for treasury management and as a reserve asset for stablecoins.

Since its inception, BlackRock's BUIDL has gained traction as a collateral asset, particularly with Ondo Finance’s OUSG (Ondo Short-Term US Government Treasuries), where BUIDL serves as the sole underlying investment.

Many blockchains, structured as decentralized autonomous organizations (DAOs), hold significant treasury reserves and are encouraged to seek additional returns through strategic investments. One example isArbitrum's Stable Treasury Endowment Program (STEP), which allocates its native token to investments in tokenized financial assets.

The availability of BUIDL across multiple blockchains highlights the fee structure adopted by Securitize and BlackRock, borne by investors, with management fees set at 0.50% on most networks. However, the fee is discounted to 0.20% on three blockchains: Aptos, Avalanche, and Polygon.

These discounts are part of a success-based compensation agreement, where these blockchain foundations pay retrocession fees to Securitize based on the assets managed through BUIDL on their platforms.

BlackRock’s move marks a significant step toward mainstreaming tokenized assets and the recognition of blockchains as robust infrastructure for digital assets.