The Frax Finance community has voted to adopt BlackRock's Digital Liquidity Fund (BUIDL) as a reserve asset for their stablecoin frxUSD.
Frax Finance's Decision
The voting commenced on December 26 and shows strong community support for the proposal. The voting will conclude on January 1, 2025. A positive outcome may lead to yield opportunities, enhanced liquidity, and reduced counter-party risks.
Bridging Traditional Finance and DeFi
The proposal, initiated by real-world asset tokenization platform Securitize and BlackRock's intermediary for BUIDL, presents RWAs as a crucial link between traditional finance and DeFi, according to user achaffee.
What Does the Data Say?
According to Dune Analytics data aggregated by 21Shares, about $3.4 billion of tokenized treasury funds are now on-chain. Frax is not alone in its approach; Ethena Labs manages the USDtb synthetic dollar, now possessing $89 million in TVL, as reported by DefiLlama.
The adoption of BUIDL as a reserve asset for frxUSD by Frax Finance signifies a pivotal move towards integrating DeFi with traditional financial mechanisms.
