BlackRock makes a breakthrough by integrating the BUIDL Treasury Bond Fund worth nearly 3 billion USD with the decentralized lending platform Euler on Avalanche.
The world's largest asset management group has completed the "first direct DeFi integration" for the tokenized BUIDL Treasury Bond Fund through the Euler decentralized lending protocol on the Avalanche network. This move marks a significant step in connecting traditional assets with the decentralized financial ecosystem, allowing investors to benefit from bond yields while utilizing DeFi tools.
This integration is based on the sToken framework developed by Securitize, allowing tokenized products like BUIDL to expand on-chain functionality while maintaining security and regulatory compliance. The result is the creation of sBUIDL – an ERC-20 token with "composable" characteristics that can be fully converted back to the original BUIDL fund.
"This feature transforms BUIDL into a composable ERC-20, providing on-chain utility without affecting convertibility," the Euler representative confirmed about the significance of this integration.
Dual Yield Model from Treasury Bonds and DeFi
Re7 Labs built a technical integration allowing users to use sBUIDL as collateral on the Euler protocol. This enables investors to borrow stablecoins like USDC or AUSD based on their sBUIDL holdings, while still receiving AVAX rewards and base yield from the BUIDL fund.
This model creates a multi-layered yield mechanism: investors earn interest from US Treasury bonds (through BUIDL), can borrow capital for reinvestment or liquidity needs, and also receive AVAX tokens as an incentive reward.
It's worth noting that Euler Finance is a non-custodial lending protocol operating on EVM-compatible blockchains. In 2023, the protocol suffered a $197 million flash-loan attack due to a vulnerability in the donateToReserves function lacking liquidity checks. However, after patching the issue, Euler relaunched version v2 in September 2024 with a focus on modular architecture for developers, and has raised over $387 million in deposits as of March 2025.
