BlackRock’s tokenized U.S. Treasury fund, BUIDL, recorded approximately $447 million in net outflows over the past 30 days, marking its steepest monthly drawdown since launch, according to data from RWA.xyz.
The redemptions, concentrated in the Ethereum-based BUIDL-I share class, coincide with outflows from other major Treasury-backed products, including Superstate’s USTB and Circle’s USYC, which saw $287 million and $67 million in net redemptions, respectively, over the same period.
While BUIDL’s market cap had surged to $2.87 billion across 18 months, peaking as the largest on-chain U.S. Treasury product, the recent downturn has pushed its total value to approximately $2.42 billion as of August 1, reflecting a 15.21% drop in the trailing 30 days.
Per RWA.xyz, the supply reduction was isolated to the BUIDL-I contract (`0x6a9DA2…C89041`), while the primary BUIDL share class (`0x7712…8Aa2AEc`) registered net inflows. This bifurcation indicates the drawdown is not across the entire product but instead linked to share-class-specific redemptions.
Why is BUIDL losing funds?
The most plausible drivers for the retreat stem from large ecosystem participants reallocating capital. Protocols such as Ondo Finance and Ethena, both of which have disclosed major BUIDL positions, appear as primary candidates.
Ethena Labs held $1.29 billion in BUIDL as of March 2025, while Ondo previously transitioned substantial portions of its OUSG liquidity strategy into BUIDL. Ethena’s USDtb, its BUIDL-backed synthetic stablecoin, permits instant atomic redemptions, allowing treasury migration at scale. Simultaneously, Ondo’s OUSG Instant Manager wallet (`0x282698…A6A43`), a known major recipient of monthly BUIDL distributions, likely contributed to the net share-class shift.
Additional outflows may be linked to operational dynamics introduced mid-June when BUIDL became eligible collateral on derivatives exchanges Deribit and Crypto.com. This integration has likely increased the product’s cyclical liquidity patterns around expiries and hedging flows. Redemptions from such platforms tend to exhibit short-term volatility rather than structural exits, suggesting that some of the drawdown may revert in subsequent weeks.
Historical frictions in redemption latency may also play a role. Earlier in the year, Circle’s redemption facility for BUIDL experienced brief capacity constraints, which led some allocators to diversify liquidity sources. The result is a more mobile and opportunistic use of BUIDL, with large holders dynamically shifting allocations based on network conditions, redemption throughput, and competing yield products.
On-chain analysis supports the hypothesis that redemptions were concentrated in the BUIDL-I Ethereum contract, where supply decreased meaningfully between July 1 and August 1. In contrast, the main BUIDL token contract saw a marginal supply uptick. Etherscan traces show that wallets linked to Ondo’s OUSG and possibly Ethena’s reserve stack (used to back USDtb) are the likely endpoints of these reallocation events.
The broader tokenized Treasury sector saw uneven flows over the same period. While BUIDL and USTB led outflows, WisdomTree’s WTGXX recorded $165 million in net inflows, followed by Securitize’s VBILL and OpenEden’s TBILL, which added $22 million and $15 million, respectively. These shifts suggest that while some capital exited the sector or rotated internally, appetite for tokenized short-term yield instruments remains present.
BUIDL remains the sector’s most prominent instrument by total value, but the latest activity reveals how its scale has made it sensitive to the internal portfolio adjustments of just a handful of large holders.
With more venues enabling BUIDL collateralization and redemption mechanics continuing to evolve, future shifts may increasingly reflect tactical reallocations rather than directional sentiment.
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