Key Points
- BlackRock’s BUIDL fund, which became the world’s largest tokenized fund within 40 days of its March 2024 launch, is expanding from Ethereum to five additional blockchains including Arbitrum, Avalanche, and Polygon.
- The expansion enables 24/7/365 peer-to-peer transfers and on-chain dividend distribution across multiple ecosystems, with varying management fees from 20 to 50 basis points depending on the blockchain.
Multi-Chain Strategy Signals Growing Institutional Embrace of DeFi
BlackRock, the world’s largest asset manager, has taken a significant step in expanding its digital asset footprint by launching new share classes of its USD Institutional Digital Liquidity Fund (BUIDL) across five additional blockchain networks. The expansion beyond Ethereum to include Aptos, Arbitrum, Avalanche, Optimism, and Polygon represents a strategic move to increase accessibility and utility within the growing tokenization ecosystem.
Differentiated Fee Structure Reveals Strategic Blockchain Partnerships
The expansion comes with an interesting fee structure that may indicate BlackRock’s strategic priorities in different blockchain ecosystems. While Arbitrum, Optimism, and the original Ethereum deployment maintain a 50 basis point management fee, newer additions like Aptos, Avalanche, and Polygon offer more competitive 20 basis point fees. This pricing strategy appears linked to direct financial support from Aptos Foundation, Avalanche (BVI), Inc., and Polygon Labs BD Investments, who have agreed to pay BlackRock quarterly fees based on their respective share class values.
Technological Infrastructure and Institutional Support
BNY Mellon’s role as fund administrator and custodian has been crucial in facilitating this multi-chain expansion, further demonstrating the growing integration between traditional finance and digital assets. The tokenization infrastructure, provided by Securitize, enables key features that distinguish BUIDL from traditional funds, including near real-time transfers and on-chain dividend accrual and distribution.
CEO Carlos Domingo of Securitize emphasized the significance of this development, stating, “Real-world asset tokenization is scaling, and we’re excited to have these blockchains added to increase the potential of the BUIDL ecosystem.” This expansion marks a significant milestone in the institutional adoption of blockchain technology and suggests a growing comfort level with digital asset infrastructure among traditional financial powerhouses.
