A vote has commenced within the Frax Finance community to integrate BlackRock’s USD Institutional Digital Liquidity Fund Ltd (BUIDL) as a reserve asset for the proposed stablecoin, Frax USD (frxUSD). This voting process, which began on December 26, will remain open until January 1, 2025. Up to now, all votes cast by tokenholders of the decentralized finance lending protocol have been in favor of the proposal, with positive comments in the discussion supporting this initiative.
The proposal, initially presented by Securitize, a tokenization platform dealing with real-world assets, aims to provide several advantages. These include creating yield opportunities, enhancing liquidity, improving transfer options, and reducing counter-party risk by leveraging BlackRock’s robust backing. Achaffee, a user participating in the discussion, highlighted the potential of tokenized real-world assets to bridge traditional finance with decentralized finance by bringing institutional-grade investments onto the blockchain.
BlackRock’s BUIDL, which has exceeded half a billion dollars in assets under management in less than four months since its launch on March 15, offers daily accrued dividends directly to investors through a partnership with Securitize. The fund primarily invests in U.S. government securities and maintains a 1:1 value pegged to the US dollar.
The concept of BUIDL-backed stablecoins is gaining traction, with other entities like Ethena Labs having already launched a similar product, USDtb, on December 16, which has accrued $89 million in total value locked. This shift towards integrating real-world assets into decentralized finance marks a significant evolution in how decentralized entities manage their financial strategies across industries.
