BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL) has made headlines once again with its record-breaking dividend distribution of $4.17 million in March. This marks the largest monthly payout for a tokenized Treasury fund, showcasing the growing interest from institutional investors in on-chain exposure to traditional financial products.
Securitize, the issuer of BUIDL, reported the milestone dividend payment, bringing the total cumulative dividends to $25.4 million since the fund’s inception. This significant increase in payouts indicates a surge in demand for tokenized US Treasury funds, offering an alternative to crypto-native stablecoins.
The fund, which tokenizes a money market strategy consisting of US Treasuries and cash equivalents, provides daily dividend payouts Monday through Friday. This real-time yield accrual on-chain has attracted investors looking for transparent and yield-bearing assets backed by traditional financial instruments.
Tokenized US Treasury funds have emerged as a pivotal component in the on-chain finance sector, with a market size approaching $5 billion. This sector provides a bridge between traditional financial products and the decentralized ecosystem, offering a secure and verifiable investment option for both institutional and retail investors.
BUIDL’s assets under management (AUM) reached a record high of $1.93 billion on March 27, less than a month after surpassing the $1 billion mark. According to data from rwa.xyz, BUIDL ranks among the largest real-world asset (RWA) products on public blockchains, following only stablecoins in terms of market capitalization.
A key driver of BUIDL’s AUM growth is Ethena Labs’ synthetic dollar, USDtb, which relies on the fund for 90% of its backing. USDtb, designed to maintain price stability through a delta-neutral strategy, allocates reserve capital into BUIDL to earn yield from US Treasury exposure. The close integration of USDtb with BUIDL underscores the fusion of traditional fixed-income instruments with crypto-native applications.
In an exciting development, MakerDAO’s Spark is set to vote on a proposal to invest $500 million in BUIDL, which could further expand the fund’s market size. If approved, DeFi protocols’ participation in BUIDL investments would account for 74% of the fund’s current numbers, highlighting the growing synergy between traditional finance and decentralized platforms.
While BUIDL has expanded to various blockchains, including Arbitrum, Polygon, Optimism, Avalanche, Aptos, and Solana, the majority of its shares are issued on Ethereum’s blockchain. This dominance of Ethereum in BUIDL’s token issuance underscores the platform’s stronghold in the DeFi ecosystem.
Overall, BUIDL’s success reflects the growing demand for tokenized financial products that bridge the gap between traditional and decentralized finance. As more institutional investors seek exposure to on-chain assets backed by real-world instruments, the tokenization of US Treasury funds is poised to revolutionize the way we engage with financial products on the blockchain.
