BlackRock has officially launched its first direct DeFi protocol integration through sBUIDL on the Avalanche blockchain. The integration with Euler Finance announced on May 15, 2025, signifies an important turning point as the world’s largest asset manager brings its nearly $3 billion tokenized Treasury fund into the composable world of DeFi.
A New Era of Tokenized Treasury Assets
The original BUIDL fund holds nearly $3 billion in assets and is already the world’s largest tokenized Treasury vehicle, consisting of short-term U.S. Treasury securities and repurchase agreements. While BUIDL is an ERC-20 token, it previously lacked the composability needed for DeFi applications. The new sBUIDL token, developed through Securitize’s sToken framework, solves this limitation.
The sBUIDL is a composable ERC-20 token that is fully redeemable for BlackRock’s BUIDL fund. It represents a groundbreaking approach to bringing traditional financial assets onto the blockchain.
The integration allows users to use sBUIDL as collateral on Euler’s lending protocol while benefiting from the underlying Treasury yields.
How BlackRock’s sBUIDL Works
Re7 Labs developed the integration, which enables users to deposit their BUIDL tokens into Securitize’s vault system to mint sBUIDL tokens. These tokens can then be used as collateral on Euler to borrow stablecoins, including USDC, USDT, AUSD, and deUSD.
The dual yield potential is particularly appealing for users, as sBUIDL holders can earn the underlying Treasury yield from the BUIDL fund and receive AVAX rewards when using their token as collateral. This transforms what was previously a passive yield instrument into an actively usable DeFi asset.
The collateral parameters on Euler are generous, offering up to a 92.5% loan-to-value (LTV) ratio, which reflects confidence in the stability of the Treasury-backed token. Chainlink data feeds secure the sBUIDL tokens on Euler, ensuring reliable pricing and enhanced security.
Other major DeFi protocols like Aave may soon follow Euler in accepting sBUIDL tokens, potentially expanding the utility and adoption of BlackRock’s tokenized Treasury product across the broader DeFi ecosystem.
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