BUIDL in the bear 🐻

BlackRock CEO Larry Fink's enthusiasm for tokenisation could be DeFi's saviour.

Author

Tim Craig
April 08, 2025

GM, Tim here.

Decentralised finance is taking a shellacking amid widespread market chaos which some have characterised as Orange Monday.

In previous bouts of market volatility, DeFi protocols have encountered serious issues. This time around, they've managed to weather the storm — so far.

That’s little solace to lenders on Aave and Sky who’ve lost millions due to Ethereum and other DeFi tokens’ prices having plummeted to levels not seen in over two years.

How a DeFi whale lost $74m when an Ethereum-backed loan hit the wall

Ethereum's sudden drop is wreaking havoc. One whale with a large loan on Sky got liquidated. Others could follow if Ethereum's price continues to fall.

As traders brace for a potential bear market, $11 trillion asset manager BlackRock remains a reason for DeFi believers to keep the faith.

In early April, CEO Larry Fink published his annual Chairman’s letter to investors.

In it, Fink characterised DeFi as an “extraordinary innovation.” He also dedicated an entire section of the letter to tokenisation.

Tokenisation refers to turning real-world assets like stocks, bonds, and real estate into digital tokens tradable online. These tokens live securely on blockchains, enabling instant buying, selling, and transferring without cumbersome paperwork or waiting periods.

Bear markets in DeFi are usually characterised by a big drop in activity. This is because, like it or not, DeFi is mostly based around speculation on hyper risky assets.

Tokenisation could change that dynamic to a more sustainable one. The same permissionless infrastructure that’s popular with degen traders can also make financial markets more efficient.

Think US Treasuries, corporate debt, and money markets instead of governance tokens and memecoins.

Fink’s vision is clear — he sees blockchains as the next big upgrade in finance. “If SWIFT is the postal service, tokenisation is email itself,” he said in his letter.

There also appears to be a preference among Wall Street players for public blockchains like Ethereum over closed-garden counterparts like Hyperledger Besu.

There’s almost $20 billion worth of tokenised assets on public blockchains so far, according to data from rwa.xyz.

XRP issuer Ripple and Boston Consulting Group predict the tokenisation market will hit $19 trillion over the next eight years.

Tokenisation to hit $19tn by 2033, say Ripple and BCG

The concept of tokenisation is grabbing ever-more mindshare among institutions. Its applicability will propel it “exponentially.”

BUIDL, BlackRock’s USD Institutional Digital Liquidity Fund, is growing fastest on Ethereum, with almost $1.8 billion riding on the top smart contract network.

During the previous bear market, tokenisation was helped by increased demand for US Treasuries, which at the time produced higher yields than many riskier DeFi native products.

Even if the worst comes to pass and the Federal Reserve raises interest rates in response to inflation caused by President Donald Trump’s trade war, tokenisation — and DeFi — could benefit again.

Top DeFi stories of the week 🤖 

Crypto hacks hit record $2bn this year as new tactic reveals industry’s Achilles’ heel

The amount lost in crypto thefts has doubled compared to the same period last year. The $1.4 billion Bybit hack accounts for a large portion of that increase.

Tornado Cash’s ‘incredible victory’ in sanctions case thrown into doubt, crypto lawyers say

Crypto lawyers fret Treasury is leaving the door open to future sanctions. Tornado Cash deposits barely budged after the US removed sanctions.

ZKasino’s year-long silence on investor refunds ends in a $27m liquidation

A ZKasino-linked wallet liquidated for $27 million. Investors have been waiting for a refund since last year. The crypto market lost over $240 billion overnight.

This week in DeFi governance ⚖️ 

Post of the week 💥

Crypto Twitter pokes fun at the entirely predictable impact of Trump’s tariffs.

Got a tip about DeFi? Reach out at [email protected].

DL News is an independent news organisation that provides original, in-depth reporting on the largely misunderstood world of cryptocurrency and decentralised finance. From original stories to investigations, our journalism is accurate, honest and responsible.

Forwarded by a friend? Subscribe here.