BlackRock BUIDL, as the foundational asset of the DeFi US dollar supply chain... Tiger Research, on-chain restructuring diagnosis

Some analyses suggest that BlackRock’s tokenized U.S. Treasuries fund BUIDL is surpassing institutional-only products and becoming DeFi’s core “fundamental asset.” In a recent report, Tiger Research diagnosed that BUIDL’s expansion has moved beyond simple product distribution, reshaping the dollar-product supply chain of major DeFi protocols such as Ethena, Ondo, Frax, Spark, and others.

At the heart of this analysis is the point that the significance of BUIDL is not “the token issued by BlackRock” itself. After this asset—designed for institutional investors—is put on-chain, DeFi protocols recombine it into reserves, collateral, and portfolio assets, thereby starting to serve as raw material for new types of dollar products.

BUIDL is a tokenized fund for institutions launched by BlackRock in partnership with Securitize. Structurally, it invests in cash and U.S. Treasuries. Only qualified investors can participate, with a minimum subscription amount of 5 million dollars. In the language of traditional finance, it is closer to a closed-end product aimed at institutional capital, but in practice, the driver of initial demand is not institutions—it is DeFi protocols.

Tiger Research put forward three backgrounds for protocols adopting BUIDL. First is the clarity of “legal claim rights.” BUIDL is issued under Rule 506© private placement provisions under U.S. securities law, with investor rights and redemption structures that are relatively clear. Second is reducing regulatory adaptation costs. As regulation around stablecoins and real-world assets (RWA) becomes increasingly refined, using assets that already meet institutional standards can ease design burdens. Third is on-chain composability. BUIDL is not limited to simply holding assets; it can be further processed into collateral, reserves, and liquidity-layer assets.

From practical cases, BUIDL’s role becomes even clearer. When Ethena operates synthetic dollar products like USDe and its staked version sUSDe, it needs a defensive asset that can support the system when derivative-market funding rates turn unfavorable. In this process, it uses USDtb reserves—namely BUIDL and USDC. The key is not to chase high returns, but to reinforce structural stability. This means that even if derivative strategies falter, the system still needs a safety cushion to support the dollar peg across the entire system, and BUIDL is what is put into that cushion.

Ondo’s OUSG is also a representative example showing how BUIDL can be used. OUSG is an “intermediate product” that lowers the access threshold for institutional-only U.S. Treasuries / money-market products on-chain. In effect, it re-packages and connects the institutional MMF structures of BlackRock BUIDL or Franklin Templeton—structures that individuals or small participants find difficult to access directly—into OUSG. At this point, BUIDL’s role is not as a final consumer product, but as raw material passed along to a broader user base.

Frax’s frxUSD adopts a structure that incorporates BUIDL into the minting and redemption reserve assets. From the user side, it appears that people are using ordinary stablecoins, but in the back end, BUIDL supports a one-to-one issuance and redemption mechanism. In other words, even if BUIDL does not show up on the front end of the user experience, it is permeating—becoming the trust foundation of the DeFi dollar system in a subtle way.

Sky’s Spark liquidity layer chose a path closer to traditional asset management. Spark executed a total of 10 billion dollars-scale RWA asset inclusion plan through the “Tokenization Grand Prix,” allocating 500 million dollars to BUIDL, with the remainder diversified into other tokenized U.S. Treasuries assets. This shows that BUIDL is not just a single substitute; it is being internalized as a core pillar of on-chain investment portfolios.

In this trend, one important point is that BUIDL is not the final product. Rather than directly consuming BUIDL, protocols use it as the base set to assemble new dollar assets and liquidity products. The supply chain expands further here. For example, the stablecoin USDm in the MegaETH ecosystem uses Ethena’s USDtb as reserves, and USDtb in turn incorporates BUIDL as the underlying fundamental asset. As a result, when demand for USDm grows in the new ecosystem, demand for BUIDL also increases indirectly, forming a multi-layer structure.

This is a “on-chain supply chain” model that is hard to see in traditional finance. Traditional financial products attract investors through sales channels, broker networks, and institutional sales teams. BUIDL, on the other hand, first wins over a new customer group—DeFi protocols. These protocols then stack BUIDL on top of their own products, creating network effects. Tiger Research interprets this as: “Not customers acquired through sales, but customers attracted through design.”

Ultimately, BUIDL cases are changing the entry strategy for the tokenized asset market itself. The expectation that demand can be created purely through institutional brand recognition—or by tokenization alone—has obvious limitations. By contrast, assets that simultaneously meet legal stability, regulatory compliance, and on-chain composability can be used repeatedly within DeFi infrastructure, thereby creating new demand.

The market is now asking what the next hot topic after BUIDL will be. The conclusion of this analysis is that for the next tokenized asset to succeed, what’s needed is not traditional-finance-style selling, but understanding this unfamiliar customer group of DeFi protocols. BlackRock’s BUIDL has demonstrated that it can not only enable the on-chain migration of institutional funds, but also become the starting point of the DeFi supply chain. One viewpoint is gaining more support: in the tokenized asset market, the next winner does not depend on who can attract more investors, but on who can become the “fundamental asset” for more protocols.