Asset Tokenization Trends of 2024: BlackRock’s BUIDL and RealT
Larry Fink has become the main character of crypto in 2024. He transformed BlackRock seemingly overnight into what will be the largest asset manager of BTC in the world. He made it clear on CNBC that an ETH ETF would be next. All just as “stepping stones” towards tokenization.
What’s their first foray into tokenization? The BlackRock USD Institutional Digital Liquidity (BUIDL) Fund. Seems like another Wall St. type fund right? Nope. This is likely the building block that will prove to help grow BlackRock’s AUM almost as fast and as large as the tokenization industry itself.
Larry Fink understands that capital markets will operate using blockchain. It’s a more efficient way of managing almost any financial transaction or administrative task related to stocks, funds, bonds etc. but a BIG one is the instant settlement function with zero counterparty risk. Atomic swaps for financial instruments. DUH, we’re going to use blockchain for capital markets.
So that means there is a race to build the ultimate pair for settlement. Most brokerage accounts already force you to settle into money market funds today, sans blockchain. Naturally, a similar vehicle will become the go-to solution for settling tokenized transactions. Therefore, Larry wants BUIDL to do exactly that for all of tokenized capital markets. BlackRock has chosen Securitize as their tokenization partner and integrated with every major custody provider out there. All the right moves to knock this opportunity out of the park.
BUIDL is Just a Building Block, RealT Might Be The Matchstick
Yes, the BUIDL product could be the settlement token for trillions worth of onchain transactions in the coming years alone. More on my prediction that Tokenization will hit $10T in size by 2027 another time. BUIDL is cool but will take time for the adoption to kick into high gear since the market still lacks high quality products and size itself. Our current focus should turn to RealT instead.
Most people in ‘crypto’ or ‘tokenization’ have not heard of RealT despite the fact that the company has tokenized and sold hundreds of US properties to the tune of over $100 Million in total sales. RealT also invested heavily into DeFi infrastructure over the last 5 years. They were the first to leverage a whitelist model for RWAs on Uniswap before quickly moving elsewhere. Today they have $13M of those property tokens (all managed via SPVs) locked on the Aave lending protocol and have a full fledged Automated Market Maker platform to provide partial liquidity. All via overseas sales to now almost 20,000 token holders.
This is impressive in its own right, but it’s not the catalyst I’m referring to which they have unleashed today. RealT is now selling itself. There is virtually no chance you’ll get access to this opportunity just given how strong and deep the RealT community is. On many occasions, properties sell within minutes, not hours or days. The founders even took lengths to ensure broad access by doing this offering across multiple tranches.
What is also different from all their usual US-based SPVs is that this sale is being conducted through a Swiss-based SPV and following the DLT law that was enacted in 2021. The punchline: unlimited shareholders and transfers until registration (KYC) is needed for things such as distributions.
This means you can essentially use all of DeFi with equity as long as you don’t need to interact with the issuer directly. I look at this akin to USDC. If you want to mint directly through Circle, you will need to go through KYC. However, third-party transfers are freely done by the owner. If RealT applies all of their DeFi expertise to this token as they have their properties, then you can now use RealT’s equity in a way crypto has always dreamed of using it — no barriers to ownership and full DeFi utilization.
We’ve already started to see ICO’s offer trade-ins for equity (Hacken) or protocols offering equity in the IP/ company behind it (Casper Labs). Now you can align that ownership also with the utility of DeFi. I absolutely believe this could unleash a whole new wave of projects looking to remove the criticism of no founder alignment and scam risk by utilizing this model, most likely through RealT’s infrastructure… and completely outside of the United States.
Recap: 2 BIG Trends — We’ve got the “USDC of capital markets settlement” and the DeFi RWA infrastructure live in 2024. There is no going back now. Happy tokenizing!
