BlackRock’s BUIDL Fund Cuts Out Middlemen—Goes Straight to DeFi on Avalanche

Wall Street meets crypto rails as BlackRock’s $1.2B BUIDL fund plugs directly into Avalanche’s DeFi ecosystem. No custodians, no brokers—just smart contracts executing trades at the speed of blockchain.

The move signals institutional comfort with decentralized infrastructure—or at least the fee savings were too juicy to ignore. TradFi giants dipping toes in DeFi pools? How very 2025.

Bonus jab: Somewhere in Manhattan, a prime broker just lost 0.3% in commission fees and felt a disturbance in the Force.

• BlackRock’s BUIDL Fund integrates directly with Euler, a DeFi lending protocol on Avalanche, marking a major institutional entry into DeFi.
• Securitize’s sBUIDL token, backed 1:1 by BUIDL shares, can now be used as collateral on Euler, enabling borrowing and earning AVAX rewards.
• Avalanche’s fast, low-cost, EVM-compatible network was chosen for this integration to enhance efficiency and scalability for institutional investors.

BlackRock, the world’s largest asset manager, has taken a major step into decentralized finance (DeFi) with its USD Institutional Digital Liquidity Fund (BUIDL). On Thursday, BlackRock announced the fund’s first direct integration with a DeFi protocol through Euler, a popular lending platform on the Avalanche blockchain. This integration marks a significant milestone for institutional finance’s entry into blockchain-based decentralized ecosystems.

The integration was developed by blockchain innovators Re7 Labs and Securitize, with additional incentives provided by Merkl in the form of AVAX rewards. These incentives aim to encourage participation from sBUIDL token holders, the ERC-20 tokenized version of BUIDL, allowing investors to earn extra rewards while engaging with DeFi tools.

Securitize, which manages the vault system for sBUIDL issuance, explained that this new functionality enhances the value proposition for users by combining traditional asset stability with DeFi’s dynamic yield opportunities.

Blackrock Backed sBUIDL Launches on Avalanche

Securitize introduced sBUIDL as a composable, blockchain-native ERC-20 token minted from the BUIDL fund. Investors lock BUIDL shares backed by short-term U.S. Treasury bills and repurchase agreements in Securitize’s vault to mint sBUIDL tokens. These tokens maintain full 1:1 redeemability for the underlying BUIDL shares, ensuring investors’ exposure to stable, government-backed assets remains intact while gaining access to DeFi functionality.

The future of finance is composable—
And now, so is the BlackRock USD Institutional Digital Liquidity Fund.

sBUIDL, minted from the BUIDL fund via Securitize’s sToken vault technology, is now integrated with @eulerfinance on @avax.

🔗https://t.co/T8XPl8pQRe pic.twitter.com/4NBOkmwXpF

Through this integration, sBUIDL holders can now use their tokens as collateral on Euler’s lending platform within the Avalanche ecosystem. It enables them to borrow stablecoins such as USDC or Avalanche’s native AUSD, all while earning AVAX rewards and benefiting from the underlying yield generated by the BUIDL fund.

Avalanche’s blockchain network was chosen for this innovative integration due to its high throughput, EVM compatibility, sub-second transaction finality, and low transaction fees. These features make Avalanche an ideal environment for institutional deployments seeking efficiency and scalability.

The BUIDL fund, valued at over $500 million, targets a stable $1 per token value and pays out daily dividends directly to investors’ wallets. Avalanche’s efficient infrastructure lowers the operational costs for the fund compared to other blockchain networks, further boosting investor returns.

BlackRock Brings Institutional Assets to DeFi via BUIDL

BlackRock’s MOVE to integrate BUIDL with a DeFi protocol highlights a growing trend of traditional financial institutions exploring blockchain technology to expand investment opportunities. By tokenizing a fund that invests in secure, short-term U.S. government debt, BlackRock offers institutional investors a familiar asset class with enhanced flexibility through blockchain.

This collaboration not only brings stability and credibility to the DeFi space but also opens new avenues for yield generation on otherwise idle cash or stablecoin holdings. It signals a critical step toward mainstream adoption of DeFi tools by large financial institutions.

Avalanche’s role in this development underscores the blockchain’s increasing appeal to asset managers like J.P. Morgan, Citi, Wellington Management, KKR, and Franklin Templeton, all of whom have integrated or are exploring digital asset strategies on Avalanche.

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