Traditional Financial Giants BUIDL Leading the DeFi Revolution: How Institutional Capital Is Reshaping the Crypto Ecosystem

BlackRock’s BUIDL tokenized fund is rewriting the rules of DeFi. In just 8 months, the fund’s market cap has surpassed $500 million, becoming the second-largest project in the RWA track. More importantly, it is catalyzing the deep integration of traditional finance and decentralized finance, with the first projects to benefit gradually emerging.

Core Mechanism of BUIDL: The Perfect Blend of Stability and Compliance

BUIDL is not an ordinary crypto fund. Initiated by the world’s largest asset manager, BlackRock, in 2023, it establishes a special purpose vehicle (SPV) in the British Virgin Islands and employs SEC-approved Reg D exemption provisions, creating a truly institutional-grade compliant investment tool.

The operation logic of this innovative fund is quite straightforward: 100% of assets are allocated to short-term liquid assets such as U.S. Treasuries and repurchase agreements, maintaining an annual yield of 2%-4%. Each BUIDL token is pegged to 1 USD, fully avoiding market volatility risks. The monthly distribution of yields is automated through Rebase, allowing investors to receive tokenized interest income.

Currently, BUIDL is issued on six chains: Ethereum, Arbitrum, Optimism, Avalanche, Polygon, and Aptos, with an annualized yield of 4.50% and management fees between 0.20% and 0.50%. Fund redemptions are settled T+0, with USD settlements completed by 3 PM on each working day. The minimum investment thresholds are $5 million for individuals and $25 million for institutions.

Institutional Capital Arbitrage: How ONDO Profits from BUIDL

ONDO Finance was among the first to recognize BUIDL’s value. As the core product OUSG (money market fund) of Ondo Finance, it requires efficient subscription and redemption mechanisms to meet liquidity needs. Compared to traditional short-term T-bills, BUIDL’s real-time, 24/7 trading and redemption capabilities present an opportunity for Ondo Finance.

Deeper logic lies in threshold arbitrage. BUIDL’s $5 million minimum investment is unfriendly to retail investors, but Ondo Finance significantly lowers this threshold to $5,000 through the OUSG product, achieving a “reverse retailization.” This design not only attracts small and medium-sized investors from traditional finance into the DeFi ecosystem but also makes Ondo Finance a key hub connecting institutional capital and retail investors.

Since ONDO began holding BUIDL at scale, its price has increased by over 200%. According to the latest data, ONDO is trading at $0.39, down 2.53% in 24 hours, with a circulating market cap of $1.25 billion. Despite the correction, ONDO’s position as the first beneficiary of the BUIDL ecosystem remains solid.

Curve and Elixir Collaboration: A New Battlefield for DeFi Liquidity

The latest development comes from the announcement of a partnership between Curve and Elixir. Elixir, a blockchain network focused on order book trading, has launched the revolutionary deUSD—a synthetic stablecoin backed by both stETH and U.S. Treasuries (via MakerDAO’s USDS). In just four months, deUSD’s supply has exceeded $160 million.

The key innovation in this collaboration is the RWA institutional plan: BUIDL token holders can now directly mint deUSD while maintaining their original investment yields. What does this mean? Institutional investors gain a new DeFi interaction channel—they can enjoy BUIDL’s stable 4.50% yield while participating in DeFi strategies.

Elixir has chosen Curve as the primary liquidity hub for deUSD, a decision of great significance for CRV.

The Beginning of CRV’s Price Discovery

As the narrative of BUIDL×deUSD spreads, the market’s response has been a 90% increase in CRV over five days. But there’s an interesting phenomenon: ONDO’s market cap has reached $1.25B, while CRV’s current circulating market cap is $581.95M, with a price of $0.40 and a 24-hour decline of 1.84%.

The gap reflects market expectations. As the dominant DeFi stablecoin liquidity provider, Curve’s infrastructure is crucial for institutional adoption. As high-quality RWA assets like BUIDL continue to enter the DeFi ecosystem to mint deUSD, Curve’s trading volume, fee income, and TVL will enter a positive cycle:

More RWAs → More deUSD minting → Explosive trading volume on Curve → veCRV holder income increase → CRV revaluation

Compared to ONDO’s direct benefit model, Curve’s profit path is longer but with greater potential. Once institutional capital truly enters DeFi stablecoin trading at scale, Curve’s bargaining power as an infrastructure provider will be unmatched.

Structural Changes Brought by Traditional Finance Entry

This wave of change led by BUIDL is not just price speculation but a restructuring of financial architecture.

First, BUIDL addresses the biggest pain point for traditional financial institutions entering DeFi—risk and compliance. Through tokenization rather than traditional subscription methods, institutional investors enjoy DeFi efficiency while gaining regulatory certainty.

Second, it opens new imagination space for the integration of RWA and DeFi. When U.S. Treasuries and short-term financing can circulate, assemble, and trade on-chain, the liquidity boundaries of the entire financial system are being redefined.

Finally, it rebalances the interests of retail and institutional investors. Lowering thresholds is not charity but an inevitable expansion of market scale. Both ONDO and Curve have found their respective positions in this process.

What’s Next

As more traditional financial assets are tokenized into the DeFi ecosystem, Curve will face a key question: whether it can quickly upgrade its infrastructure to handle institutional-level trading volume. Meanwhile, ONDO needs to look beyond BUIDL for the next arbitrage opportunities in institutional assets.

BUIDL is just the beginning. The collaboration among BlackRock, Securitize, Elixir, Ondo, and Curve is laying the foundation for the long-term integration of traditional finance and DeFi. The real story is still being written.