Injective has unveiled a significant development in decentralized finance with the launch of the first-ever tokenized index for BlackRock’s BUIDL Fund. This marks a critical step in bridging the gap between traditional financial assets and blockchain technology, allowing users unprecedented access to institutional-grade assets through decentralized platforms.
What is the BUIDL Fund?
The BUIDL Fund, formally known as the BlackRock USD Institutional Digital Liquidity Fund, is BlackRock’s first tokenized fund issued on a public blockchain. It gives institutional and retail investors exposure to U.S. dollar-denominated assets, such as U.S. treasury bills, while offering daily accruing dividends and maintaining a stable value of $1 per token. With over $500 million in assets under management, the BUIDL Fund is the largest tokenized fund to date.
The fund is managed by BlackRock, while blockchain firm Securitize handles tokenized share management, including reporting fund subscriptions, redemptions, and distributions. Key players in the crypto space like Coinbase, BitGo, and Fireblocks have also contributed to the creation and management of the fund.
Injective's The BUIDL Index
The BUIDL Index, launched by Injective, brings the world’s first perpetual market that tracks the supply of the BUIDL Fund. This new index allows users to gain 24/7 exposure to tokenized assets such as U.S. treasuries, with the added flexibility of leverage options. Unlike traditional index markets that track prices, the BUIDL Index tracks the actual supply of BUIDL tokens.
As the supply of BUIDL tokens increases or decreases, the index price adjusts accordingly, offering users the ability to take long or short positions based on their market predictions. The market is based on the fund’s mark price, which is calculated using a 1-hour TWAP (time-weighted average price) to minimize volatility from large inflows or outflows.
This perpetual market offers significant advantages over traditional markets, including faster speeds and lower fees through Injective’s decentralized exchanges (DEXs) such as Helix. The creation of the BUIDL Index was enabled by Stork, a decentralized on- and off-chain price feed that ensures fast and accurate data availability.
Expanding Real World Asset (RWA) Tokenization
The BUIDL Index marks a milestone in Injective’s expanding real-world asset tokenization efforts. This development comes on the heels of Injective’s broader Altaris Mainnet upgrade, which introduced a dedicated RWA oracle to support the tokenization of traditional assets. The oracle, combined with Injective’s infrastructure, allows for the seamless creation and management of tokenized assets like the BUIDL Index.
Making Investment More Accessible
Previously, the BUIDL Fund was only accessible to institutional investors with a minimum $5 million investment. With the BUIDL Index, however, anyone can trade the market with as little as $1, making high-quality financial products accessible to a broader audience. This democratization of institutional-grade assets opens up new opportunities for retail traders and institutional investors alike.
The Future of Finance = Injective
The launch of the BUIDL Index showcases Injective’s role in pioneering the tokenization of real-world assets. By providing an accessible and decentralized way to interact with institutional-grade financial products, Injective is driving the convergence of traditional and on-chain finance. This new index offers a glimpse into the future of decentralized finance, where capital efficiency and accessibility are at the forefront.
The BUIDL Index is only the latest in a series of advancements that demonstrate the potential of decentralized finance and Injective, to reshape global markets.
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