Infinite Liquidity Generation As Tokenization’s Biggest Value Points

With cross-chain transactions nearing new security levels with Chainlink's newest cross-chain interoperability protocol(CCIP), we are close to witnessing a new wave of asset types and services hitting the cryptocurrency ecosystem.

Most Traditional finance business players have entered a phase of hyper developments in a race to deploy various “on-chain” investment options, solutions and services; this is evident in Blackrock’s recently launched first asset tokenized fund called BUIDL.

The urgency is real, I'd say.

BUIDL, an acronym for “Blackrock USD Institutional Digital Liquidity Fund” is a tokenized fund that was debuted on March 20th according to Cryptopotato.com report to enable “chain-level” access to good-old cash, treasury bills, and repurchase agreements.

Not a very exciting underlying market, for a crypto investor to say the least but nonetheless, quite a huge market of target.

At the time of writing, Ethereum-based BUIDL fund has a marketcap of $349.43 million according to Defillama.com.

That said, Dune analytics data published by 21.co(shares) shows that tokenized government funds total asset under management(AUM) is about $1.08 billion across 17 blockchains.

This is without a doubt relatively impressive given that the cryptocurrency and blockchain ecosystem is still a largely speculative sector.

Amongst the list of tokenized funds covered in the dune analytics report by 21.co is TBILL, issued by OpenEden.

My only reason for mentioning this fund in particular is that I recall once discovering and reading a little about it at times Blackrock had yet to even recognize bitcoin.

Blackrock however brings with its venture a great deal of attention being a title holder for being the world's largest asset manager.

Evidently, speculations have gone through the roof since inception that tokenized government funds could become a $16 Trillion Sector on the blockchain.

Limitless Atop Tokenization For Diverse Services

I hold a firm opinion that tokenization, as enabled by crypto and blockchain technology will lead to an insane new level of “fractional reserve banking”, a dangerous but exciting possibility in my books.

Uncommon to many, tokenization enables the creation of money that does not exist, on a financial protocol where it can be sustained till it holds a market influence.

New investment products and services are bound to hit the ecosystem hard as further integration of traditional financial assets allows for blockchain-based services to create new on-chain assets to mirror tokenized traditional funds/assets whilst employing additional investment benefits.

Upon any deal of success, these fresh on-chain investment vehicles become “collateral-fit” assets giving fresh liquidity sources for old, emerging and new markets.

For clarity, we are looking at BUIDL for example, having numerous wrapped versions on various blockchains(not issued by Blackrock) and a lot more protocols offering differing investment benefits that lures in fresh liquidity to capitalize on the popularity of BUIDL and Blackrock.

These asset markets will hold no direct affiliation with Blackrock other than the marketed “BUIDL backing” mechanism to their tokens of course.

Given that we are effectively dealing with “permissionless protocols”, we could have thousands of such services pop in as they require no permission to offer wrapped versions of these funds as they are simply blockchain data that anyone can target in a new program.

A great deal of scams, but with a great deal of fresh asset types and investment services awaits us. Interesting times to say the least, even though the FBI is issuing a silly warning to crypto investors right now and the worst US president ever is being dumber than ever, cause the fuck is “Tax On Unrealized Gains?”

Interesting times, truly.

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