Backed Finance Tokenizes BlackRock’s iShares Bond ETF on Base Layer-2 Network
Backed Finance has successfully launched a tokenized version of BlackRock’s iShares bond ETF on the layer-2 network Base. The tokenization protocol has converted the UCITS bond ETF, which tracks short-term U.S. Treasury bills, into a tokenized asset with the ticker blBO1.
Expanding Tokenization Possibilities
According to Adam Levi, co-founder of Backed Finance, the company aims to tokenize various assets held in bank accounts, expanding their product offering. By working with Backed for RWA (real-world assets) tokenization, organizations can avoid dealing with traditional finance processes or developing their own legal frameworks.
The Role of Base and Ethereum Congestion
Base is a layer-2 network built on Optimism’s OP stack and incubated by Coinbase. It aims to reduce costs and congestion on Ethereum through optimistic rollups. Backed Finance started working with Base in February due to its support for builders and developers.
RWAs in the Tokenization Movement
The addition of RWAs on Base is a significant development as decentralized finance protocols like Aave and Maker have turned to RWAs to generate revenue in the current high-interest-rate and low-crypto-price environment. Maker has already integrated U.S. treasuries to generate yield on its stablecoin DAI.
Future Tokenization Possibilities
While fixed-income products are currently in high demand, Backed Finance is open to tokenizing any security that receives market interest, including companies like Google or Tesla. However, U.S. investors are currently unable to participate in Backed’s tokenized offerings.
Hot Take: Backed Finance Expands Tokenization to RWAs on Base Layer-2 Network
Backed Finance’s launch of a tokenized government bond on the Base layer-2 network marks a significant step in the tokenization movement. By converting real-world assets into digital tokens, Backed Finance offers organizations an alternative to traditional finance processes. The integration of RWAs on Base aligns with the growing demand for fixed-income products in the decentralized finance space. While Backed Finance is open to tokenizing various securities, including well-known companies, U.S. investors currently face restrictions. As the market evolves, we can expect further advancements in asset tokenization and increased accessibility for investors.
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