From Wall Street to Blockchain: How BlackRock's BUIDL Fund is Reshaping the RWA Landscape

The BlackRock Dollar Institutional Digital Liquidity Fund ( BUIDL ) is the first tokenized fund launched on a public Blockchain by BlackRock, the world's largest asset management company, in March 2024. This fund combines the stable returns of traditional finance with the efficiency of Blockchain technology, providing qualified investors with a new way to invest.

1. The Essence of the BUIDL Fund

BUIDL is essentially a regulated traditional money market fund ( MMF ), with underlying assets consisting of highly liquid, low-risk cash, US Treasury securities, and repurchase agreements. Its innovation lies in tokenizing fund shares into BUIDL tokens that circulate on a public Blockchain, achieving on-chain ownership records, transfers, and profit distribution.

The fund aims to stabilize the value of each BUIDL token at $1.00, which aligns with the net asset value target of traditional MMFs. The fund generates daily interest from the underlying assets and directly airdrops it to investors' wallets in the form of new BUIDL tokens on a monthly basis. This design ensures that the par value of each BUIDL token remains stable, making it an ideal DeFi collateral.

2. Ecosystem and Strategic Cooperation

The successful operation of BUIDL relies on a carefully constructed ecosystem:

• BlackRock: serving as asset manager, responsible for investment strategy
• Securitize: As a core technology and compliance partner, providing tokenization, transfer agency, and investor onboarding services.
• Bank of New York Mellon: Acting as the custodian and administrator of fund assets

BlackRock's collaboration with Securitize is a deeply integrated symbiotic relationship. Securitize not only provides technical support but also acts as a placement agent responsible for fund sales. BlackRock has made a strategic investment in Securitize and appointed executives to its board, demonstrating a long-term strategic alliance between the two.

3. Investor Path

The entry threshold for BUIDL is extremely high, only targeting "qualified purchasers" with a minimum investment of 5 million dollars. Investors must pass strict KYC/AML checks for their wallet addresses to be added to the whitelist.

The subscription process connects off-chain fiat currency with on-chain tokens: investors wire US dollars to Bank of New York Mellon, BlackRock purchases the underlying assets, and Securitize then mints the corresponding amount of BUIDL tokens and sends them to the investors' wallets.

When redeeming, BUIDL provides two paths:

1. Traditional Redemption: Initiate requests through Securitize, limited by traditional financial settlement cycles.
2. Instant Redemption: Redemption is completed almost in real-time through Circle's USDC smart contract.

4. Technical Architecture

BUIDL was originally issued on Ethereum, using a custom ERC-20 standard, with the core feature of whitelist transfer restrictions.

To expand its influence, BUIDL has rapidly expanded to multiple blockchain networks such as Solana, Avalanche, and Polygon. The Wormhole protocol serves as a cross-chain bridge, ensuring that BUIDL maintains unity and liquidity in a multi-chain environment.

Circle's BUIDL-to-USDC redemption contract is a key innovation in the tech stack, providing a universal exit for BUIDL to convert on-chain assets back to highly liquid US dollars.

5. Market Performance and Impact

Since its launch, BUIDL has experienced rapid growth, with assets nearing $2.9 billion by mid-2025, making it the largest tokenized government bond fund in the world. Its success is primarily attributed to being adopted as a reserve and collateral asset by numerous DeFi protocols, such as Ondo Finance, Ethena Labs, and Frax Finance.

The rapid rise of BUIDL verifies the huge demand from institutions and the crypto-native market for highly compliant, deeply liquid, and yield-generating RWA products. Driven by this, the entire tokenized U.S. Treasury market has surpassed $4.4 billion.

6. Strategic Analysis and Future Outlook

BUIDL faces multidimensional risks, including technical risks, regulatory uncertainties, and complex counterparty risk chains. Its core design reflects a trade-off between compliance and the composability of DeFi, forming a "permissioned DeFi" ecosystem.

BUIDL is just the first step in BlackRock's grand blueprint. In the future, it may expand to more asset classes, deepen DeFi integration, and drive industry standardization.

BUIDL represents a key moment in the fusion of TradFi and DeFi, establishing a viable blueprint for bringing real-world assets on-chain. However, its long-term viability depends on whether the crypto ecosystem will continue to prioritize compliance and profitability over the pure pursuit of decentralization. This philosophical tension is the deepest challenge faced by BUIDL.