Arbitrum Endowment Committee Recommends Six Real-World Asset Products Including BlackRock’s BUIDL Fund

The total value of tokenized treasury product tokens has reached $1.72 billion, more than twice the $778 million figure at the year’s start.

The committee tasked to help diversify Arbitrum’s treasury recommended six real-world asset products to invest 35 million ARB worth almost $27 million from the DAO’s treasury, highlighting the increasing overlap between traditional and decentralized finance. 

The six products include BlackRock’s BUIDL Fund with Securitize, Ondo Finance’s US Dollar Yield Token, Superstate’s USTB Fund, Mountain Protocol’s USDM, OpenEden’s TBILL Fund, and Backed Finance’s bIB01 asset, according to Arbitrum’s treasury and sustainability working group lead, Devansh Mehta, who posted the announcement in network’s governance forum on Saturday.

The investments would be made as part of Arbirtum’s Stable Treasury Endowment Program (STEP), which aims to support the network’s real-world asset ecosystem by investing into stable and liquid products that generate a yield independent of crypto market volatility.  

Of the total 35 million, Arbitrum’s STEP committee proposed a roughly 31% allocation or 11 million ARB to BlackRock’s BUIDL Fund with Securitize, the highest figure among the group, while Ondo Finance’s US Dollar Yield Token and Superstate’s USTB Fund each had a suggested allocation of 6 million. The remaining three would be allocated 4 million ARB each, if the DAO approves, with a a snapshot vote occurring on July 1, 2024.

Read More: BlackRock and Securitize Submit Application for Arbitrum’s Program Focused on Real-World Asset Diversification

Arbitrum’s STEP program saw over 30 initial applications and 20 days ago the committee cut the list to 17 products. “To not spread the amount too thinly and increase operational or default risk causing loss of principle, we selected only 6 products,” wrote Mehta. “Specific amounts to each provider were mostly on the basis of existing AUM (the three tiers were below 100 million, above 100 million, and the topmost).” 

Blockchain explorer Etherscan shows that BlackRock’s tokenized RWA fund BUIDL has already garnered a total value of $481 million since it first rolled out in March, making it the largest fund ahead of Franklin Templeton’s Franklin OnChain U.S. Government Money Fund (FOBXX).

Growing Arbitrum’s RWA Ecosystem

“Being selected out of 25+ proposals highlights our expertise in both the crypto and asset management space,” wrote Superstate’s protocol relations lead Fig Gowen in an email to Unchained. “We are excited to contribute to Arbitrum’s goals of enhancing treasury management and growing the RWA ecosystem.”

Tokenization refers to the process of using cryptocurrencies to represent real-world assets such as US treasuries on a blockchain network. At presstime, the total value of all tokenized treasury product tokens in circulation stands at $1.72 billion, double from the beginning of the year when the figure was $778 million, data from analytics platform rwa.xyz. 

ARB, the cryptocurrency that powers the governance structure of layer 2 blockchain network Arbitrum, has slid 2.7% in the past 24 hours and nearly 30% in the past year to trade at 77 cents at the time of writing, per CoinGecko.

Read More: Arbitrum’s Market Cap Has Grown, But the ARB Token Is Near Its All-Time Low