BlackRock, the world's largest asset manager, has made a groundbreaking move into decentralized finance (DeFi) by integrating its $2.8 billion tokenized U.S. Treasury fund, sBUIDL, with the Euler lending protocol on the Avalanche blockchain. This marks the first time a major institutional fund has directly linked with a DeFi protocol, signaling a strong vote of confidence in the DeFi space.
*Key Features of the Integration:*
- *sBUIDL Tokens as Collateral*: sBUIDL tokens can now be used as on-chain collateral for lending and borrowing activities on the Euler protocol.
- *Securitize's sToken Framework*: The integration utilizes Securitize's sToken framework, which converts real-world assets like U.S. Treasuries into compliant on-chain tokens.
- *Avalanche Blockchain*: The DeFi operations occur on the Avalanche blockchain, known for its speed, low fees, and scalability ¹ ².
*Implications for the Future of Finance:*
- *Increased Legitimacy and Regulation*: This move could bring greater legitimacy and regulation to the DeFi industry.
- *New Financial Possibilities*: The use of real-world assets like U.S. Treasuries as collateral opens up new financial possibilities, enabling users to access liquidity without selling their holdings.
- *Greater Adoption*: This integration could pave the way for more traditional financial institutions to tokenize their assets and enter DeFi ecosystems ² ¹.
*Benefits for Users:*
- *Earning Opportunities*: Users can borrow AUSD or USDC by leveraging their sBUIDL tokens as collateral, earning AVAX token rewards and underlying yield from the BUIDL fund.
- *Increased Utility*: sBUIDL tokens can be used in lending and borrowing activities, increasing the utility of tokenized instruments ².