- BlackRock’s sBUIDL enables secure access to DeFi tools while maintaining exposure to short-term U.S. Treasuries via its BUIDL fund.
- sBUIDL offers 1:1 redeemability for BUIDL and integrates with Euler on Avalanche to unlock collateralized lending options.
- AVAX incentives from Merkl enhance utility for users borrowing stablecoins against sBUIDL while still receiving BUIDL fund yields.
BlackRock has entered the decentralized finance space through its tokenized fund BUIDL, now integrated with the Euler protocol on the Avalanche blockchain. The firm introduced a new ERC-20 token, sBUIDL, which allows users to engage with DeFi tools while maintaining exposure to short-term U.S. Treasuries and repos.
The launch of sBUIDL enables holders of the BUIDL fund to mint a composable DeFi-compatible token. Users can lock their BUIDL tokens in Securitize’s vault system and receive sBUIDL, which retains full 1:1 redeemability. This structure ensures that liquidity and yield remain unaffected while enabling on-chain functionality.
Protocol Support and Ecosystem Incentives
Re7 Labs and Securitize collaborated on the protocol integration. Additionally, Merkl introduced AVAX-based incentives to encourage participation from sBUIDL holders. These incentives are available to users who borrow USDC or AUSD against their sBUIDL, allowing them to benefit from both yield generation and token rewards.
The BUIDL fund, currently exceeding $500 million in assets, is designed to maintain a stable value of one dollar per token. It distributes accrued daily dividends directly to investors’ wallets. The fund’s assets consist of cash, Treasury bills, and repurchase agreements. The move aims to convert idle fiat or stablecoins into yield-generating assets within a decentralized ecosystem.
Advantages of Avalanche Deployment
Deploying the fund on Avalanche offers technical benefits, including lower fees and faster transaction times. The blockchain’s compatibility with Ethereum and sub-second finality makes it an attractive environment for institutional deployments. Ava Labs noted that Avalanche’s infrastructure supports growing institutional interest in blockchain-based financial products.
This development follows recent institutional activity on Avalanche. Firms like J.P. Morgan, Citi, KKR, and Franklin Templeton have launched initiatives or integrated services on the network. The addition of BlackRock’s BUIDL fund builds on this trend, reinforcing Avalanche’s position in supporting institutional DeFi use cases.
