This report is written by Tiger Research.BlackRock (BlackRock)'sBUIDL has become an indispensable asset in the field of digital assets. However, its biggest buyers are not traditional institutions, but DeFi (decentralized finance).
Core Summary
- The on-chain significance of BUIDL lies not in BlackRock issuing a token, but in that Ethena, Ondo, Frax, and Spark use BUIDL as a building block for their dollar products, turning an institutional fund into a foundational asset in the DeFi supply chain.
- The choice of BUIDL by protocols is not for yield but because it simultaneously meets three conditions: clarity of legal rights, on-chain composability, and existing compliance. No other asset can provide all three at the same time.
- The supply chain does not stop at the first layer. As BUIDL is processed into USDtb and further transformed into dollar products for specific ecosystems, the demand for underlying assets grows with the emergence of each new ecosystem.
- BUIDL reveals a brand new tokenized asset distribution channel. Its clients are not discovered through traditional sales channels but through DeFi protocols—this client group does not exist in traditional finance. Without recognizing this channel, the next BUIDL will not appear.
1. From Institutional Products to Protocol Infrastructure
BUIDL was originally designed for institutions: providing exposure to cash and U.S. Treasury bonds, limited to qualified investors, with a minimum subscription of $5 million.
However, the first movers were DeFi protocols, not traditional institutions. They purchased not merely for yield but for three reasons:
- Legal clarity: Issued under Rule 506(c), investor rights are protected by U.S. securities law. Protocols can distinctly explain asset attributes and redemption processes in legal terms.
- Lower compliance costs: After the GENIUS Act, reserve design has become very complex. BUIDL already meets institutional-grade collateral standards. Compliance burdens can be transferred without having to build from scratch. As regulation tightens, this advantage becomes increasingly evident.
- On-chain composability: Usable as protocol reserves, exchange collateral, or as foundational dollars for ecosystem products.
Since no other asset simultaneously meets these three points, BUIDL became the default foundational asset.
2. How DeFi Protocols Use BUIDL
The key is not the fact that protocols hold BUIDL but the specific roles BUIDL plays within the frameworks of each protocol.
2.1. Ethena (USDtb): Funding Rate Cushion
Ethena's flagship product is the synthetic dollar USDe and its staked version sUSDe.
The sources of yield for USDe include:
- Staking rewards from collateral assets
- Funding rates from perpetual contracts (through Delta neutral strategies)
The second source of yield—the funding rate—comes from Delta neutral strategies. USDe holds short future positions equal to the size of the collateral to offset price risk. When long demand dominates, longs pay funding to shorts. Ethena, as the short side, directly collects this revenue.
Risk emerges when funding rates turn negative. In a bear market, short demand may exceed long demand, leading the short side to pay funding rates. For Ethena, revenue turns into costs. If this situation persists, the insurance fund will be depleted, and the dollar peg of USDe will be under pressure.
Ethena needs an asset that can absorb this pressure. USDtb fills this role, with core reserves of BUIDL and USDC. Its purpose is not to increase yield but to provide a defensive cushion, ensuring Ethena maintains structural stability during periods of negative funding rates.
2.2. Ondo (OUSG): BUIDL as Intermediate Input
OUSG (Ondo U.S. Treasury Fund) is a tokenized fund that brings institutional-grade U.S. Treasury exposure on-chain. Direct access to institutional money market funds like BlackRock BUIDL or Franklin Templeton FOBXX usually requires millions of dollars and qualified investor status. OUSG lowers this threshold, acting as an on-chain intermediary, making these assets available to DeFi users.
BUIDL is a core component of OUSG's reserves, alongside Franklin Templeton's FOBXX and WisdomTree's WTGXX. OUSG repackages institutional assets that retail investors cannot access directly into an on-chain intermediate product.
2.3. Frax (frxUSD): Minting and Redeeming Reserves
frxUSD is a new type of dollar stablecoin designed by Frax Protocol, aiming to maintain a stable value of $1 like USDC or USDT. Its uniqueness lies in its reserve structure.
Existing stablecoins typically keep their reserves in cash or U.S. Treasury bonds in offline bank accounts. Frax replaces this with BUIDL (a tokenized U.S. Treasury on-chain). The mechanism is a direct 1:1 exchange: deposit BUIDL to mint frxUSD, return frxUSD to redeem BUIDL.
End users do not interact directly with this structure. They use frxUSD as a stablecoin for payments or in DeFi, while BUIDL operates in the background, supporting each minting and redeeming.
2.4. Spark's Tokenized Grand Prix (TGP) Allocation and the Shared Thread with BUIDL
Spark’s “Tokenized Grand Prix (TGP)” allocated $500 million of its $1 billion quota to BUIDL, with the remainder distributed to Superstate’s USTB and Centrifuge’s JTRSY. Spark did not opt for a single reserve asset but built a portfolio.
Traditional asset management firms also mix Treasury bonds, money market funds, and credit instruments in a similar manner. The difference is that this investment portfolio operates on-chain, being redeployed as collateral and liquidity via DeFi tracks.
In these four cases, BUIDL serves different roles: reserve asset, intermediate input, support for minting and redeeming, and component of the portfolio. But one pattern is common: in any case, BUIDL is not the final product. Protocols buy BUIDL to fill their systems, and this demand structure is already operating at scale.
3. Reprocessing BUIDL: Compound Demand Structure
As mentioned earlier, various protocols have directly adopted BUIDL as a reserve asset. But the chain does not stop there. Products built on BUIDL are becoming reserves for new products, thus realizing an expanded layer of derived structure.
MegaETH’s USDm is a clear example. USDm is an ecosystem-specific stablecoin co-developed by MegaETH and Ethena. Its reserves are USDtb, and the reserves of USDtb are BUIDL. As the internal demand for USDm grows within MegaETH, the demand for BUIDL also rises.
Every new ecosystem entering this structure adds more “clients” rather than “competitors.” Speed of adoption is also an important differentiating factor in on-chain finance. Building an equivalent derivative structure in traditional finance requires months of regulatory review, legal contract signing, and custody arrangements. On-chain, this process is significantly compressed. Within the regulatory framework, there are effectively no limits on the range of qualifying underlying assets.
In summary, BUIDL is unlocking compound demand by anchoring the continuously expanding on-chain structure on a secure real-world asset base.
4. What Comes After BUIDL?
BlackRock has built an institutional fund; Ethena, Ondo, Frax, and Spark have adopted it as a foundational asset; MegaETH has layered ecosystem-specific dollars on top of it. All of this has happened within less than two years since BUIDL's launch in March 2024.
This speed is not merely driven by BlackRock's brand. Legal clarity, on-chain composability, and regulatory compliance: BUIDL was the only asset able to provide all three at that time. This first-mover advantage is substantial, and it generates a compounding effect as more DeFi protocols integrate BUIDL into their reserves.
For teams designing the next tokenized asset, the question is how to enter this market. Most take one of two paths: either assume tokenization itself will create demand, or replicate traditional finance’s distribution model through sales teams, broker networks, and existing channels.
BUIDL took the third path. DeFi protocols, including Ethena, Ondo, Frax, and Spark, were the first adopters. Exchanges and institutions like Deribit, Binance, and OKX followed suit. BUIDL found a customer segment that does not exist in traditional finance.
These customers purchase assets and build their own products on top of them, which in turn become the foundation for the next protocol. They are not customers acquired through sales, but rather clients attracted through “design.” Without recognizing this customer group, the next BUIDL cannot emerge.
免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。
