BlackRock's Covert Takeover: From ETF Bait to Underlying On-Chain Operating Systems

According to Woofun AI, BlackRock (BLK.US)'s real ambition in the crypto field far exceeds the appearance of a Bitcoin ETF, and its core strategy is shifting from simply trading product bait to achieve lower-level sovereign takeover of on-chain collateral and risk pricing power through BUIDL products. Although the global media focuses on its ETF products that absorb hundreds of billions of dollars, this is only a ticket; the real change is to build an infrastructure that all upper level applications must rely on. Once built, BlackRock will charge “rent” as a rule-maker no matter how the market fluctuates.

BUIDL is a tokenized monetary fund launched by BlackRock in 2024. Its initial size is approximately $2.5 billion, and the underlying assets are anchored in short-term US Treasury bonds and cash. Although it may seem limited in size, its operating mechanism conceals a centralized shackle: the product is a strictly licensed asset, and only whitelisted wallets that have been reviewed and approved by BlackRock and its partner Securitize can hold and transfer funds.

This means that BlackRock has the absolute power to freeze wallets and suspend redemptions regardless of whether it is actively flagged by BlackRock's compliance department or pressure from regulators. Unlike the free circulation of ordinary cryptographic tokens, BUIDL's liquidity is completely controlled by a single entity. This structural risk will be directly transmitted to all upper level agreements that use it as collateral, becoming a potential weak point for the entire on-chain financial system.

This underlying dependency has been deeply implemented in the stablecoin sector. USdE, a synthetic dollar stablecoin issued by Ethena, currently ranks third in market capitalization, and its other token, USdTB, has more than 90% of its reserve assets directly allocated to BUIDL. USdTB acts as a risk buffer for USDE during sharp fluctuations, making BlackRock's treasury bond assets actually the underlying foundation of crypto's leading US dollar assets.

According to data compiled by Woofun AI, USdE's circulation is as high as 6 billion US dollars, but its own reserves are only reserved for 65 million to 80 million US dollars to withstand losses. It mainly relies on crypto assets superimposed on short futures to build reserves, and the conventional stablecoin allocation is only about 7%. Once the arbitrage benefits disappear, the meager amount of its own buffer funds will not be sufficient to cope with the risks, and Ethena will only be able to transfer funds to BUIDL on a large scale to seek shelter.

Furthermore, Ethena recently branded and issued customized stablecoins to third-party companies. BUIDL has become the core reserve asset throughout the entire product line, and BlackRock assets will become the final bearing foundation in times of crisis.

Exchange-level access has further strengthened this pattern. Since April, OKX has allowed its major institutional clients to use BUIDL as trade margin to hold positions. The tokens are managed by Standard Chartered, and idle funds can generate treasury bond yields. This is the first time that a large traditional bank has been deeply involved in this type of cryptographic business, marking the formal transformation of idle security deposits into interest-bearing assets, and the issuer of this asset is BlackRock.

At the same time, BlackRock connected USdE to its self-developed risk management platform Aladdin. This move was not just to support the cryptographic industry, but to capture data, risk exposure structures and operational logic within the on-chain financial system. Through Aladdin, BlackRock was able to ascertain the level of leverage on all parties in the market and accurately predict where falling prices would trigger large-scale forced liquidation. Even if the founders of the crypto project claimed to be independent, they eventually had to use BlackRock's exclusive model to measure risk. USDC, the second-largest stablecoin with a market capitalization of about $78 billion, has the vast majority of its cash reserves also managed by BlackRock's funds, and the complete risk chain has already taken shape.

Historical experience shows that BlackRock excels at relying on underlying infrastructure to achieve a monopoly. In the early years, index funds were seen as plain “raw water products,” but BlackRock took the world by storm with iShares index funds, and now the three giants, BlackRock, Vanguard, and State Street, have become major shareholders close to 90% of S&P 500 companies. They don't need to stand in front of the stage; they only need to stay at the bottom and wait for capital to pour in. The Aladdin system replicates this logic. It covers assets of more than 20 trillion US dollars, accounting for about 10% of the world's total financial assets. A large number of competitors pay to use the system for risk control, which is tantamount to relying on BlackRock's algorithm to evaluate their own safety bottom line. During the 2008 financial crisis and the 2020 COVID-19 bond crisis, the US government twice commissioned BlackRock to dispose of crisis assets, and a large amount of bailout funds eventually flowed into its own products. This pattern of issuing underlying collateral assets while operating an asset pricing risk control system is the ultimate form it is trying to build in the crypto industry.

Looking forward to the future, if various tokens and dollars continue to use BUIDL as the underlying reserve, DeFi funds are continuously stored here, and market risk is uniformly calculated and priced by Aladdin, BlackRock will become the underlying operating system in the crypto world. ETFs only represent investment needs, and can be cleared at any time without impacting the foundation of the system; however, once collateral is established, it will be extremely difficult to withdraw, because dismantling the underlying foundation means dismantling all upper level loans and leveraged positions, which can easily induce a systemic collapse. Currently, BUIDL's size of 2.5 billion US dollars is still small compared to the stablecoin market of over 300 billion US dollars. Tether and Circle still occupy the market share, but Boston Consulting predicts that the tokenized physical asset market is expected to reach 16 trillion US dollars in the 2030s. The essence of this power exchange is that the market traded asset stability but handed over control at the bottom, and BUIDL is a licensed asset that follows BlackRock's rules, relies on whitelist entry, and centralized control of redemption rights from beginning to end. Its influence will grow exponentially with the deep binding of upper tier products.