In the latest sign of the rapid convergence of Wall Street and crypto, the world’s biggest asset manager is moving into decentralized finance or DeFi. BlackRock on Wednesday revealed it will be bringing its Treasury-backed digital token BUIDL onto Uniswap, a leading DeFi platform, where it will be bought and sold by institutional traders. As part of the tie-up, BlackRock is also purchasing an undisclosed amount of Uniswap’s own UNI token.
The new arrangement, which is being undertaken with the tokenization firm Securitize, is a significant milestone for the DeFi sector, which many view as one of the most useful applications in crypto. Unlike traditional trading, which relies on centralized intermediaries to record and settle trades, platforms like Uniswap rely on smart contracts to match buyers and sellers via liquidity pools and automated market makers. Currently, there is around $100 billion worth of capital sitting on DeFi platforms.
The decision by BlackRock to list its BUIDL token, which launched in 2024 and boasts a total market value of around $180 billion, reflects a major vote of confidence in DeFi by one of the finance industry’s most influential firms.
The practical impact of Uniswap adding BUIDL to its platform is likely to be minor at first, though, since the arrangement involves Securitize creating a whitelist of eligible institutions that can participate in the DeFi trading. The firm is also whitelisting a handful of market makers, including longtime crypto liquidity provider Wintermute, to facilitate trading. Meanwhile, access to BUIDL is restricted to qualified purchasers, a legal designation for those with assets of $5 million or more.
These restrictions will mean a relatively few numbers of traders will be exchanging BUIDL on Uniswap’s decentralized platform, which charges a fee of 0.3% on trades. The new arrangement, though, is also serving as an important test case, and is likely to lead to a growing pool of traders using DeFi to exchange stocks and a growing list of other traditional assets.
“Large asset managers want to walk before they run, and start with qualified purchasers. But the infrastructure we’re announcing will work equally with retail products,” said Securitize CEO Carlos Domingo, whose firm specializes in putting assets onto the blockchain.
Worlds colliding
The tie-up between BlackRock and Uniswap is striking because the pair occupy wildly divergent places on the financial services spectrum. The former is a quintessential Wall Street name while the latter is known as one of the most cutting edge forums in crypto where pseudonymous “degens”—industry parlance for high-risk traders—sling obscure digital tokens.
Uniswap founder and CEO Hayden Adams told Fortune the collaboration came together after a year and a half of meetings that took place at BlackRock’s posh office in Manhattan’s Hudson Yards, and at the startup’s “very pink” space in SoHo.
Adams declined to comment on the scope of BlackRock’s UNI purchase. The token, which serves as a proxy for Uniswap’s value, is currently trading at around $3.30 and has an overall market cap of over $2 billion.
For Adams, the decision of a large institution like BlackRock to embrace Uniswap’s technology validates his belief that asset trading of all sorts is going to migrate onto blockchain based platforms. He added that this tokenization process, whose touted advantages include instant settlement and more efficient uses of collateral, will produce savings and benefits that will accrue to the broader investing world.
In a statement, BlackRock’s Global Head of Digital Assets, Robert Mitchnick, said the Uniswap arrangement will also benefit stablecoins, which are rapidly becoming part of the broader financial landscape.
“This collaboration with Uniswap Labs alongside Securitize is a notable step in the convergence of tokenized assets with decentralized finance. The integration of BUIDL into UniswapX marks a major leap forward in the interoperability of tokenized USD yield funds with stablecoins,” said Mitchnick.
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