Traditional funds have a long-standing time gap: while blockchain can operate 24/7, fund subscriptions and redemptions are still limited by traditional financial market hours. Now, BlackRock's tokenized fund BUIDL is beginning to bridge this gap through new liquidity facilities.

On November 12, Securitize and Ethena officially launched a $100 million liquidity facility for the BlackRock USD Institutional Digital Liquidity Fund (BUIDL).

Eligible investors can exchange BUIDL fund shares for supported assets including USDC outside of traditional financial market hours.

The facility initially provides $50 million in liquidity, with BUIDL and USDC each accounting for half; an additional $50 million can be replenished within an hour after the initial liquidity is used.

This means that the tokenized fund no longer has to wait for redemptions according to the schedule of traditional financial markets, but can begin to access additional liquidity outlets geared towards on-chain markets.

Not a 24/7 trading fund, but an increase in redemption channels

To understand the significance of this facility, it is essential to differentiate between fund subscriptions/redemptions and on-chain exchanges.

BUIDL is a tokenized money market fund launched by BlackRock, primarily investing in short-term assets such as cash, U.S. Treasuries, and repurchase agreements. Investors hold fund shares, with returns mainly coming from the interest generated by the underlying assets.

However, traditional funds have their own operating and trading schedules. Even if fund shares have been tokenized, it does not mean that investors can redeem directly from the fund manager at any time.

This creates a time gap: the on-chain market can operate 24/7, while traditional fund subscriptions and settlement processes may not be synchronized.

The liquidity facility launched by Securitize and Ethena provides another solution.

Under qualifying and trading conditions, investors can use this facility to exchange BUIDL shares for supported digital assets without relying entirely on the opening hours of traditional markets.

It is essential to emphasize that this does not mean the BUIDL fund itself has become an open market trading 24/7, nor does it imply that all investors can unconditionally redeem at any time. Actual exchanges are still subject to participation qualifications, supported assets, liquidity, and relevant operational rules.

How does the $100 million work?

The initial funding arrangement for this facility is divided into two parts:

• $50 million initial liquidity: BUIDL and USDC each account for $25 million, providing initial funding for the exchange between fund shares and digital assets.
• Additional $50 million: After the initial liquidity is utilized, the remaining funds can be replenished within an hour.

From a business logic perspective, it essentially establishes a liquidity buffer layer between the traditional fund and on-chain capital.

For example, an eligible investor holds BUIDL and wishes to obtain USDC during traditional market off-hours. Through the liquidity facility, the investor can hand over fund shares to the corresponding trading arrangement and receive the corresponding digital asset.

In turn, liquidity providers also need to manage liquidity on both the BUIDL and USDC sides, ensuring that there are sufficient assets to complete transactions when exchange demands arise.

Therefore, the $100 million does not represent BlackRock issuing an additional $100 million in fund shares to the market, nor does it imply that all BUIDL holders have acquired unconditional instant redemption rights. It represents the scale of liquidity available for this exchange arrangement.

Why are Securitize and Ethena collaborating?

This collaboration did not start from scratch.

Securitize is responsible for the tokenized issuance and related infrastructure of BUIDL, while Ethena has already established the digital asset product USDtb around BUIDL. USDtb is mainly supported by BUIDL, connecting the traditional money market fund with on-chain dollar asset demand.

Previously, both parties had established an around-the-clock atomic exchange mechanism between BUIDL and Ethena-related assets. The launch of this $100 million liquidity facility further increases the funding support available for exchanges.

For Securitize, the focus is on ensuring that the tokenized fund goes beyond just the issuance and holding stage, and provides more practical liquidity use cases.

For Ethena, BUIDL serves as both an underlying asset and liquidity source, further connecting on-chain capital demands and expanding the link between its products and traditional financial assets.

For BlackRock, the application scenarios for BUIDL are also expanding from on-chain holding to trading, collateralization, and liquidity management.

Tokenized funds begin to address real liquidity issues

In the past, RWA projects often emphasized asset scale, the number of on-chain holders, and the number of issuance networks.

However, for institutional investors, the ability to exit assets smoothly is equally important.

A fund, even if it has been tokenized, can lose its on-chain advantages if investors cannot exchange in a timely manner during market fluctuations or must wait for traditional markets to reopen.

This is also why the $100 million facility is worth noting: it begins to address the timing and liquidity issues that tokenized funds face in practical use.

Of course, 24/7 exchanges do not mean there are no risks. The liquidity facility has capacity limits; if there is a concentrated demand for exchanges within a short period, the initial funds may be quickly depleted; additional funding replenishment also has clear time and condition arrangements. Furthermore, the valuation of BUIDL's underlying assets, counterparty risks, and related compliance requirements still exist.

Therefore, what truly deserves observation is not the figure of $100 million itself, but the actual performance of this facility under market fluctuations, concentrated redemptions, and different trading periods.

The launch of the liquidity facility for BUIDL signifies that tokenized funds are moving from "being able to hold on-chain" to "being able to obtain liquidity on-chain." The next stage of competition for RWA is not just about how many traditional assets are moved on-chain, but whether these assets can truly circulate, exchange, and be used on-chain.

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