The total value of United States Treasurys on various blockchains, including Ethereum, Polygon, and Solana, has now exceeded $1 billion. This increase was partially driven by the recent launch of the BlackRock USD Institutional Digital Liquidity Fund, known as “BUIDL.” Since its launch on Ethereum on March 20, BUIDL has gained a market capitalization of $244.8 million.
According to Etherscan, the fund received a significant boost with four transactions totaling $95 million in deposits over the past week. This has made BUIDL the second largest tokenized government securities fund, trailing behind Franklin Templeton’s Franklin OnChain U.S. Government Money Fund (FOBXX), which currently holds $360.2 million in U.S. Treasurys. Data compiled by 21Shares, the parent firm of Dune Analytics, reveals that a total of $1.08 billion in U.S. Treasurys have been tokenized across 17 different products.
The most recent deposit to the BlackRock fund, amounting to $79.3 million, was made by Ondo Finance, a real-world asset tokenization firm. This deposit will enable instant settlements for Ondo Finance’s own U.S. Treasury-backed token, OUSG. In total, Ondo Finance made $95 million in deposits across four transactions. As a result, Ondo Finance now holds a 38% share in BUIDL, according to Tom Wan, a research strategist at 21.co.
BUIDL is designed to have a price pegged 1:1 with the United States dollar and pays daily accrued dividends directly to investors each month. The fund was launched on Ethereum using the Securitize protocol. In its Dune dashboard, 21.co describes tokenized government treasurys as a more attractive option compared to stablecoin yields, given the current high-interest rate environment.
BlackRock CEO Larry Fink has recently expressed his belief that blockchain tokenization could make capital markets more efficient. According to Boston Consulting Group, the market for blockchain tokenization is estimated to reach $16 trillion by 2030. U.S. Treasurys are just one example of assets that can be tokenized, with stocks, real estate, and other assets also being suitable for tokenization.
In addition to Ethereum, other blockchains are also playing a significant role in tokenizing real-world assets. For example, Franklin Templeton’s FOBXX is tokenized on the Stellar and Polygon blockchains, which currently have the second and third largest market share of tokenized products, with $358 million and $13 million, respectively.
There are several asset management firms involved in tokenizing real-world assets, including WisdomTree. Additionally, there are blockchain-native firms like Ondo Finance, Backed Finance, Matrixdock, Maple Finance, and Swarm operating in this space.
Overall, the tokenization of assets is gaining traction as a means to increase efficiency in capital markets, and it is expected to have a significant impact on the financial industry in the coming years.