Infini Course | From Asset On-Chain to Market On-Chain: BUIDL × Nasdaq Rebuild the Market’s Base Layer

A profound paradigm shift is quietly unfolding deep beneath the crust of global financial markets.For years, the industry fixated on Asset On-Chain—tokenizing real-world assets (RWA) such as real estate, bonds, and fund shares.

Yet the breakout of BlackRock’s BUIDL fund and Nasdaq’s landmark filing to trade tokenized equities together reveal a broader, more disruptive narrative: the evolution of financial markets has leapt from mere asset digitization into a new era of Market On-Chain.

The question is no longer just “what can be traded,” but strikes at Wall Street’s heart: how to trade efficiently, cheaply, and with minimal friction.

We believe the next step will be the tokenization of assets.

— Larry Fink, CEO of BlackRock

Fink’s prediction is materializing, but along an unexpected path: the charge did not begin on the asset side; it was anchored by the money layer, eventually catalyzing a wholesale overhaul of market infrastructure.

Before we examine the sweeping transformation of the RWA market, we must answer a fundamental question: where does the revolution’s ammunition come from? The answer lies in the emergence of stable, compliant, and mass-adoptable on-chain dollars. These are not merely digital assets; they are a new breed of financial infrastructure.

BUIDL Unpacked: More Than a Fund — A New On-Chain Dollar Primitive

BlackRock’s BUIDL (BlackRock USD Institutional Digital Liquidity Fund) is not merely a tokenized money market fund. Its real power is that it creates a new on-chain dollar primitive — yield-bearing, top-tier regulated, and highly trusted.

• Operating model: BUIDL’s credit foundation stems from blue-chip endorsements in traditional finance, offering institutions an unprecedented level of trust to come on-chain.

  • BlackRock: the world’s largest asset manager, responsible for fund management and investment strategy.

  • Securitize: a leading tokenization platform providing technology, issuance, and compliance frameworks.

  • BNY Mellon: a top-tier custodian bank safeguarding the underlying assets.

• Assets and yield mechanics: BUIDL’s price stability and yield originate from careful design.

  • Underlying assets: 100% invested in highly liquid U.S. Treasuries, repos, and other cash equivalents, ensuring low risk and high liquidity.

  • Distribution: Through a distinctive re-basing mechanism, daily yield is automatically minted as new tokens into investors’ wallets. This keeps each BUIDL token pegged at exactly $1 while the holder’s token count increases, enabling native, on-chain passive income.

• Permissioned finance: BUIDL operates in a permissioned environment where all participants must pass rigorous KYC/AML checks and be whitelisted. While this limits direct use in permissionless DeFi, it precisely addresses core institutional and regulatory concerns, opening a critical gateway for traditional capital to enter the on-chain world safely and compliantly.

The Crucial Liquidity Leap: Instant Redemption via Circle’s USDC

If BUIDL’s design lays the bedrock of trust, its partnership with Circle provides the spark for liquidity. This collaboration neatly resolves the core tension facing security tokens: the gulf between slow T+1/T+2 settlement in traditional finance and the 24/7 trading cadence of crypto.

Redemptions from traditional money market funds typically take one to two business days (T+1/T+2), during which capital is locked and unusable for other trades, severely depressing capital efficiency.

BUIDL’s solution is exemplary: it establishes a smart-contract-driven redemption pool that lets whitelisted BUIDL holders swap their tokens for highly liquid USDC nearly instantly, 24/7/365.

The implications are revolutionary:

• From investment product to settlement asset: Instant redemption transforms BUIDL from a yield-generating investment into a high-quality settlement asset that can be used for trading and clearing at any time. It acquires the core monetary attribute — an efficient medium of exchange.

• De facto T+0 liquidity: It wraps traditional financial assets in crypto-native liquidity, giving institutions crypto-like capital efficiency alongside compliance and stable yield.

Regulatory Moats: The Rise of Global Frameworks for Compliant Stablecoins

BUIDL’s success is not an anomaly but the product of a clarifying global regulatory climate. Major economies are paving the way for compliant on-chain money at scale, building deep legal moats around it.

These frameworks mean that an “on-chain dollar” or “on-chain euro” is no longer an extra-jurisdictional experiment but a regulated instrument formally recognized by the financial system, removing the biggest barrier to institutional adoption at scale.

A Pressured Revolution — How Compliant Stablecoins Reshape the RWA Market

Once compliant stablecoins are ready as high-efficiency settlement tools, they exert a powerful “forcing” effect across the RWA ecosystem. To access unprecedented liquidity and compliance, asset issuers must proactively retool and upgrade.

The Achilles’ Heel of RWA: Capital Efficiency and Liquidity Constraints Before BUIDL, the RWA narrative was hot, but the market was hamstrung by three structural bottlenecks:

1. Inefficient capital rotation: RWA settlement leaned heavily on T+1/T+2 timelines from TradFi, creating significant opportunity costs.

2. Fragmented secondary markets: RWAs are illiquid by nature, and even after tokenization they often become “liquidity islands” due to compliance requirements such as whitelists, impairing price discovery.

3. High trust costs: RWA value ultimately rests on off-chain legal frameworks and centralized institutions, leaving the blockchain’s trust-minimization advantages underutilized.

The Forcing Logic: Upgrading the Asset Side via High-Efficiency Settlement BUIDL offers the RWA market a near-perfect settlement target and store of value. It combines institutional-grade compliance, T+0 liquidity, and yield-bearing capital efficiency. These strengths create a powerful gravitational pull that transmits as follows:

1. Demand pull: DeFi protocols, hedge funds, and institutions need collateral and settlement tools that are both compliant and highly liquid. BUIDL fills that gap.

2. Asset-side adaptation: Other RWA issuers realize that if their assets are priced and settled in BUIDL, they can tap into BUIDL’s liquidity network and credit stack. That requires standardizing and modularizing issuance, trading, and settlement.

3. Ecosystem flywheel: As more RWAs choose BUIDL as their settlement medium, BUIDL’s network effects compound, attracting more assets and reinforcing a virtuous loop of money first, assets to follow.

Case Study: How Ondo Finance Leapt Forward with BUIDL Ondo Finance’s move to allocate a large portion (approximately $95 million) of its tokenized U.S. Treasuries fund, OUSG, into BlackRock’s BUIDL is a vivid microcosm of this “forcing” revolution. The essence of the partnership is a deep strategic upgrade:

• Credit endorsement: By investing in BUIDL, Ondo effectively links its underlying assets to BlackRock’s credit, substantially boosting market credibility.

• A liquidity revolution: More crucially, Ondo gains access to the BUIDL-USDC instant redemption rail. This means OUSG investors indirectly gain 24/7 subscribe/redeem capability. A RWA product once bound by banking hours suddenly acquires crypto-native, around-the-clock liquidity—unlocking a step-change in user experience and capital efficiency.

Endgame: From “Asset On-Chain” to “Market On-Chain”

Once the asset side adapts to efficient money, pressure naturally flows to the market’s core—trading and settlement infrastructure. That is why giants like Nasdaq are stepping in, marking a shift from incremental change to a phase change.

Clarifying the Core Concepts: An Infrastructure-Level Revolution The key is to distinguish clearly between “Asset On-Chain” and “Market On-Chain”:

In short, “Asset On-Chain” is only the first step—it creates digitized things to trade. “Market On-Chain” is the true revolution: it rewires the operating system by which those instruments are traded and settled.

Wall Street’s Moves: Nasdaq and DTCC Go On-Chain The actions of Nasdaq and DTCC—the two giants at the core of the U.S. securities back office—signal that “Market On-Chain” has moved from theory to reality.

• Nasdaq: Its filing with the SEC seeks to ensure that “on-chain shares” carry the same legal and economic rights as traditional shares and to move toward 24/7 trading*. In essence, this extends the trading layer of financial markets onto the chain.

• DTCC: As the central clearinghouse of U.S. securities markets, its changes are even more fundamental.

  • Project Ion: Now live in production, it uses distributed ledger technology to support T+0 real-time settlement, aiming to remake the core of clearing and settlement.

  • Smart NAV: In partnership with the Chainlink oracle network, it puts key data such as fund NAVs on-chain, providing trusted feeds for on-chain finance.

*Nasdaq has submitted a rule-change filing to the SEC to initially enable 23/5 on-chain trading of equities. These on-chain shares will carry the same rights as traditional shares and will use the same CUSIP. The earliest target launch is Q3 2026, contingent on regulatory sign-off and DTC readiness.

Quantifying a Trillion-Dollar Capital-Efficiency Revolution

The most immediate, striking change from “Market On-Chain” is the vast capital unlocked by T+0 real-time settlement.Under T+1, many trillions of dollars in cash and securities are trapped in the settlement pipeline each day. Shortening the cycle from “one day” to “real time” would be one of the greatest efficiency leaps in financial history.

• Potential market size: BCG projects that by 2030 the tokenization of illiquid assets could reach $16 trillion.

• Capital unlocked and cost savings: Moving from days-long cycles to near-real-time frees up trillions in in-flight liquidity. At the same time, smart-contract automation of post-trade processes can sharply reduce reconciliation, clearing, and custody overhead, saving the industry tens of billions of dollars annually.

System-Level Impacts, Challenges, and Outlook

This infrastructure revolution, triggered by compliant stablecoins, will reshape the financial landscape and bring new challenges. DeFi’s Coming-of-Age and the Rise of Hybrid Finance (HyFi) The influx of compliant RWAs is a double-edged sword for DeFi, giving rise to a new model — Hybrid Finance (HyFi).

• Opportunity: It brings real-world yield and high-quality collateral to DeFi, likely attracting institutional capital and pushing DeFi from niche to mainstream.

• Challenges and frictions:

  • The compliance gap: whitelist-based, permissioned RWAs don’t map cleanly onto permissionless DeFi.

  • The centralization paradox: RWAs inevitably tie DeFi to off-chain centralized actors — issuers, custodians, auditors — challenging decentralization ideals.

  • Technical risk: oracle failures, smart-contract bugs, and similar issues could be catastrophic when trillions in RWAs are at stake. We may see a permissioned financial sphere and a permissionless one evolve in parallel, bridged by purpose-built “compliance gateways” for limited interaction.

A New Risk-Management Paradigm While blockchain transparency reduces certain TradFi risks, it introduces new dimensions. Risk doesn’t vanish—it migrates.

• From credit risk to technology risk: In TradFi, key risks are counterparty credit and back-office operations. On-chain, they morph into technology risks (smart-contract bugs, oracle issues, key management) and regulatory risks (jurisdictional conflicts, policy shifts).

• From isolated to systemic risk: Highly composable on-chain finance can transmit shocks quickly. A single protocol’s failure can cascade through collateral chains and trigger systemic crises.

Dawn of the Next-Generation Financial Stack

We stand on the eve of an RWA revolution ignited by compliant stablecoins. The success of BlackRock’s BUIDL is more than a product win; it is a loud signal validating the core logic of “money first, assets follow,” and it shows Wall Street embracing blockchain at unprecedented depth and breadth to tackle its most stubborn efficiency woes.

This money-pressures-assets dynamic that ultimately drives “Market On-Chain” is not about replacing TradFi with blockchains; it is about building a more efficient, transparent, and inclusive global market. From initial “Asset On-Chain” experiments to the infrastructural rebuild of “Market On-Chain,” this is, at heart, the construction of the next-generation financial infrastructure.

Going forward, the line between TradFi and DeFi will blur. A new paradigm — driven by programmable money and programmable assets, executed by smart contracts, enabling 24/7 seamless movement and instant settlement of assets worldwide — is rising on the horizon. Challenges remain, but the direction is set and the gears of change are already turning.