BlackRock’s BUIDL to Participate in MakerDAO’s $1 Billion RWA Push

Last week, MakerDAO unveiled the Spark Tokenization Grand Prix — a contest aimed at onboarding $1 billion of tokenized real-world assets.

The initiative has caught the eye of major financial heavyweights, including BlackRock, which manages $10 trillion of assets, Superstate, and Ondo Finance.

Carlos Domingo, CEO of Securitize, BlackRock’s issuance partner, believes this is a “great strategy” by MakerDAO.

“We will be there supporting this initiative with BlackRock’s BUIDL, the largest tokenized treasury fund,” he said on X, noting BUIDL’s participation in a similar initiative by Arbitrum, the largest Ethereum Layer 2 network by total value locked (TVL).

Asset management firm Superstate and Ondo Finance, which manages $550 million in real-world assets (RWAs), also plan to participate.

“Superstate is excited for the opportunity to participate in MakerDAO’s tokenized treasury investment plan,” the firm tweeted.

MakerDAO’s MKR token is up nearly 30% in the past seven days, making it one of the best performers among the top 100 digital assets by market capitalization.

The Spark Tokenization Grand Prix, scheduled to kick off on August 12, is part of MakerDAO’s broader Endgame strategy.

The Endgame Plan aims to improve the governance and tokenomics of the Maker ecosystem to reach a self-sustainable equilibrium called the Endgame State. In this state, “the ecosystem is resilient, and the scope and complexity of Maker Core will no longer change,” claims MakerDAO’s documentation.

The competition invites builders to onboard tokenized versions of traditional financial products, such as U.S. government bonds. MakerDAO plans to invest $1 billion into these products to integrate them into its ecosystem.

According to the MakerDAO forum, eligible products must have fair pricing, ample liquidity, and align with MakerDAO’s long-term goals. A committee led by Maker governance will evaluate and decide which products are best suited to be onboarded.

According to Token Terminal, MakerDAO’s weekly active users increased by 18% in July, rising to 726 from 614 in June. In terms of revenue growth, July recorded $14 million in the first 15 days of the month, compared to $10 million in June.

BlackRock’s BUIDL Reaches $500M Market Cap

BlackRock’s USD Institutional Digital Liquidity Fund, known as BUIDL, recently achieved a $500 million market cap, making it the first product of its kind to hit the milestone. BUIDL holds $502.8 million worth of tokenized Treasuries, according to Ethereum block explorer Etherscan.

Real-world asset tokenization continues to gain traction, with firms like Ondo Finance buying more of BlackRock’s BUIDL to back its OUSG token. This demand has pushed the tokenized Treasury market to nearly $1.56 billion from just $100 million in January 2023.

In December 2022, BlackRock CEO Larry Fink said that blockchain tokenization will be “the next generation for markets, the next generation for securities.” According to estimates by the Boston Consulting Group, the tokenization market is projected to reach $16 trillion by 2030.

In June 2023, nearly 80% of MakerDAO’s fee revenue came from RWAs, amounting to $13.5 million for the treasury.

MakerDAO is the largest DeFi protocol in the Collateralized Debt Position (CDP) category, with nearly $5.7 billion in total value locked, according to DeFiLlama.

Users can mint DAI, a dollar-pegged stablecoin, against collateral assets deposited to the MakerDAO protocol. DAI is the third-largest stablecoin, with a market capitalization of $5.3 billion, according to CoinGecko.