Vote for BlakRock’s BUIDL to go live for Frax stablecoin support asset
The Frax Finance community has voted to accept BlackRock's USD Institutional Digital Liquidity Fund (BUIDL) asset for the proposed stablecoin Frax USD (frxUSD).
Opened on December 26, votes cast by decentralized finance (DeFi) lending protocol tokenholders (FXS) have so far all been in favor of the idea. All the comments in the discussion support it as well. Voting will remain open until January 1, 2025.
Source: Frax Finance
According to the voting summary, the benefits of approving the proposal for Frax USD could include the creation of production opportunities, deeper liquidity, forward options and reduced counterparty risk due to BlackRock's support.
In a Dec. 22 proposal for real-world asset-token platform Securities, BlackRock's BUIDL broker-dealer, a leveraged user said the move would help bridge traditional finance and DeFi.
According to Achafi, tokenized real-world assets (RWAs) provide an “excellent bridge” between traditional finance and DeFi by bringing institutional-level investments onchain.
“In the past 9 months alone, we've seen major players, including DAOs and decentralized protocols, issue large, public RFPs to explore how they can efficiently leverage their treasuries or back their stablecoins through RWAs,” achaffee wrote.
“These early explorations represent a significant evolution in how decentralized players manage their financial resources and consider cross-industry asset strategies,” he said.
Less than four months after its launch on March 15, BUIDL hit over half a billion dollars worth of assets under management (AUM).
Related: Securitize Offers BlackRock BUIDL Fund as Frax USD Collateral
The rate is pegged at 1:1 to the US dollar and daily accumulated dividends are paid directly to investors monthly in partnership with Securities. The fund invests in US government securities.
According to Dune Analytics data compiled by 21Shares, $3.4 billion worth of tokenized treasury funds are now on-chain.
Frex is not the first to speculate on a BUIDL-backed stablecoin. Athena Labs, the developer behind Athena, responsible for the USDe synthetic dollar, said on September 26 that it has a BUIDL-backed stablecoin in the works.
A stablecoin called USDtb is a separate product offering from Athena USDe. USDtb went live on December 16 and has accumulated $89 million in total value locked (TVL), according to data from Defillama.
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