DeFi protocol Frax Finance has opened voting on whether to adopt BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL) as the primary reserve asset for its upcoming stablecoin, Frax USD (frxUSD).
The voting period runs from December 27, 2024, to January 1, 2025.
“The vote to onboard Blackrock $BUIDL as the first backing asset for the new Frax USD (frxUSD) stablecoin is live!”
the protocol announced an official post on X, inviting community participation.
The proposal outlines the benefits of holding BUIDL as a reserve asset, including yield generation, liquidity enhancement, and minimized counterparty risks. The protocol claimed that adopting BUIDL could strengthen liquidity, enhance efficiency, and align frxUSD’ with secure, high-performing assets.
According to Nader Ghazvini, Head of Governance at Frax Finance, the move positions the new stablecoin to benefit from one of the world’s most liquid assets while leveraging the yield-bearing advantages of DeFi.
Launched on March 21, 2024, BUIDL is BlackRock’s first tokenized fund built on Ethereum as an ERC-20 token. It exclusively invests in U.S. government-issued assets such as Treasury bills, cash, and repurchase agreements. The fund hit over half a billion dollars in assets under management (AUM) in less than four months after its launch on March 15.
BlackRock manages the tokenized fund in partnership with Securitize and major financial institutions like the Bank of New York Mellon. Notably, the asset manager is also exploring using BUIDL as collateral for derivatives trading on platforms like OKX, Binance, and Deribit.
According to data from Security Token Market, BUIDL is currently priced at $1.00, a 24-hour trading volume of $250,000 and a market cap of $550,336,426.
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