All Roads Lead to
@fraxfinance and
@BlackRock 🏛️
Hours before we welcomed the new year, Frax's [FIP - 418] Governance proposal was passed, with 100% of the votes in favour. With such a partnership between two key players of Web3 and Web2, Frax's empire is set to lead the DeFi Renaissance ✊
The proposal was published by Securitize Markets, LLC, a placement agent for BlackRock USD Institutional Digital Liquidity Fund Ltd. (“BUIDL”)
BlackRock's BUIDL will now officially become one of the on-chain assets backing Frax's frxUSD stablecoin (formerly
$FRAX). In turn, further providing exposure to US Dollar yields.
What is BUIDL?
BUIDL, is an ERC-20 token that can be custodied by providers on ETH mainnet,
@0xPolygon,
@avax,
@Optimism,
@arbitrum, and
@Aptos. As mentioned in the proposal, "is a tokenized U.S. Treasury product designed to provide decentralized organizations and other institutional investors a blockchain-based investment solution that can be used alongside other investments as a reserve backing of stable assets.
By holding BUILD as a backing asset,
@fraxfinance will gain exposure to:
- Yield opportunities
- Several options to transfer
- Minimized countrerparty risk via Securitize, BlackRock, and Bank of New York Mellon
BUIDL will be investing 100% of its assets in cash, T-bills, notes, and other liquid assets. Currently BUILD is offering around 4.10% yield after fees on mainnet.
BUIDL's Stablecoin Trifecta
Prior to Frax's partnership with BUIDL,
@ethena, home of
$USDe, announced their developments of their 'BUIDL-backed stablecoin',
$USDtb. Their token debuted December 16th 2024 and since then it holds a market cap of more than $70.42M
Ethena mentioned that USDtb could provide support in stabilizing their synthetic dollar
$USDe during any black swan events or through bear markets.
With frxUSD as the 'All Weather Stablecoin', users, protocols and institutions are all set to succeed no matter what the market condition.
Low yields -> Frax swaps into treasuries.
Mid yields -> Frax is LPing and gear their focus towards on-chain DeFi.
Super high yields -> Frax goes towards Ethena
As
@fraxfinance mentioned, "BlackRock is just the beginning. Our mission is to give everyone access to the most performant stablecoins in the industry. We're building the decentralized central bank of crypto. Institutions are coming, but this time, you can be along for the ride. Join Frax Nation today." 🫡
With Frax joining forces with BUIDL moments before 2025 in addition to their longstanding relationship with Ethena, the DeFi renaissance is upon us anon. Will you be ready?