BlackRock and Securitize Launch Tokenized Fund on Avalanche
The real-world assets (RWA) tokenization platform Securitize, in partnership with BlackRock, is set to launch its BUIDL tokenized fund on the Avalanche blockchain. According to on-chain data, the contract for the fund has already been deployed and funded, indicating that this is a concrete and well-planned initiative.
What Is the BUIDL Fund?
The BUIDL fund is a blockchain-based investment fund that focuses on traditional financial assets such as US Treasury bonds, repurchase agreements, and cash. The fund has already achieved significant success on the Ethereum network, where it manages over $500 million in assets under management (AUM).
On-chain data shows that the BUIDL fund contract on Avalanche has been funded with $1 million, and one million BUIDL shares have been issued. However, the fund has yet to start trading. Notably, the contract owner on Avalanche is the same as the owner on Ethereum, identified by the address 0xe01605f.
Why Avalanche?
Despite the lack of an official announcement from Securitize or BlackRock, the on-chain activity suggests that Avalanche could soon host multiple tokenized funds. The network could join Ethereum and Stellar as a major platform for tokenized RWAs. This expansion comes after several other firms, such as ParaFi Capital, have chosen Avalanche to tokenize assets.
- ParaFi Capital is tokenizing a minority stake in its $1.2 billion fund on Avalanche.
- Avalanche is already hosting tokenized funds from Franklin Templeton, OpenEden, and Backed Finance.
Tokenization’s Growing Role in Traditional Finance
According to Ben Forman, founder and managing partner of ParaFi Capital, tokenization can unlock significant benefits for traditional financial markets. These include:
- Streamlined settlement processes
- Reduced legal and administrative costs
- Enhanced liquidity, programmability, and cross-margining opportunities
The growing interest in tokenizing private market strategies reflects the desire to offer traditional financial products to a new category of investors. With firms like BlackRock, Hamilton Lane, KKR, and Tradeweb Markets already working with Securitize, tokenization is rapidly gaining traction in the financial sector.
Tokenized Government Securities on the Rise
The value of tokenized government securities is currently valued at $2.34 billion, with a 4% growth over the past 30 days, according to data from 21co in Dune Analytics. While Ethereum remains the dominant platform for issuing tokenized funds, other blockchains like Solana, Stellar, and Mantle are also beginning to see some of the volume.
CZ’s Skepticism on RWAs
Despite the optimism surrounding tokenized securities, there are mixed opinions in the industry. Former Binance CEO Changpeng Zhao (CZ) expressed skepticism about the future of RWAs, citing their lower volatility compared to cryptocurrencies. At the Second Gulf Investment Forum in Bahrain, CZ stated:
“RWAs have significant potential, but they are much less volatile than cryptocurrencies. This lack of volatility could make them less attractive for traders in the secondary market, leading to lower trading volumes and liquidity, which in turn could drive up trading costs.”
Nevertheless, major financial institutions like Visa and SWIFT are actively exploring tokenization, with Citibank projecting the sector could be worth $5 trillion by 2030. While there are concerns, the broader industry seems optimistic about the future of tokenized securities.
Conclusion
The collaboration between BlackRock and Securitize marks an important step forward in the tokenization of real-world assets, with Avalanche emerging as a key player in this space. As more tokenized funds are deployed on the network, we may see Avalanche become a significant platform for RWAs, offering new opportunities for both traditional finance and blockchain technology.
Ecosystem
Research
News Network
About