BlackRock’s BUIDL Ethereum Fund Draws $245 Million In a Week, What Next?

It has been 10 days since the launch of BlackRock’s BUIDL (Tokenized US Treasuries) on Ethereum, and it has drawn $245M in funds.

Ondo Finance said in a blog post on Wednesday, “Not only does this further validate our original concept of a tokenized US Treasury fund, but it also bolsters our thesis that tokenization of traditional securities on public blockchains represents the next major step in the evolution of financial markets.”

Currently, there are around $1 Billion in Tokenized US Treasuries on Blockchains, and the amount is growing by 26% weekly. 1,572 Holders are earning an average yield of 5% to Maturity on Tokenized US Treasuries on Blockchains.

Let’s look at the different issuers of Tokenized US Treasuries on Blockchains.

Currently, there are 16+ Issuers, but more than 80% of the Market Cap is shared between 4 issuers:

• Franklin Templeton at $360M,
• BlackRock at $245M,
• Ondo at $140M,
• and Superstate Trust at $82M.

Which Networks are used most for Tokenized US Treasuries?

• 61% market share ($607M worth of Tokenized US Treasuries) is on Ethereum.
• 36% ($358M) is on Stellar.
• 1.39% ($13M) is on Polygon.
• 0.88% ($8M) is on Solana.

The dominance of Stellar is slowly decreasing in favor of Ethereum, as shown below. Stellar had a 100% market share during the start of 2023, but currently, it has 36%, with Ethereum being at 61%.

Why do people want to buy Tokenized US Treasuries when they can earn a higher percentage in DeFi?

• It is risk-free when compared to DeFi, with the only risk being a bug in the smart contract.

Which network will be the dominant one for RWA (Real-World Assets)?

• We can already see that Ethereum is dominating the Tokenized US Treasuries. This is mainly because Ethereum is more intuitive-friendly: Solidity is the most audited programming language in the web3 ecosystem, Ethereum hasn’t been down since its launch, Ethereum is the most distributed and decentralized chain after Bitcoin, and the Ethereum Foundation, responsible for Ethereum upgrades, is very decentralized and makes slow updates that improve the network’s security and usability.

Second-order effects of this?

• Tokenized US Treasuries are just the starting point; we can expect the entire stock market and index funds to be tokenized on the blockchain.
• We can anticipate other countries’ governments purchasing US Treasuries on blockchains.
• More institutions will begin to conduct activities on-chain.

Data from RWA.xyz | Analytics on Tokenized Real-World Assets