The Avalanche Foundation has pledged up to $50 million to acquire tokenized assets minted on the Avalanche blockchain. Their new venture, “Avalanche Vista,” aims to exemplify the benefits of tokenization and pave the way for a financial system that is more accessible, efficient, and cost-effective.
Asset tokenization, the process of creating on-chain digital replicas of off-chain assets, has been facilitated more rapidly and efficiently thanks to Avalanche’s advanced consensus mechanism, unique Subnet architecture, and technological innovations. The foundation’s substantial investment signifies its commitment to advancing tokenization and its integral role in on-chain finance (“OnFi”).
Avalanche Vista seeks to underline the advantages of applying blockchain technology to more manual and operationally intensive use cases, such as asset issuance, settlement, transfer, and administration. It will consider assets across the full liquidity spectrum, including equity, credit, real estate, commodities, and blockchain-native assets.
This initiative follows several major milestones in asset tokenization, such as Securitize’s tokenization of an interest in a flagship KKR fund on the Avalanche blockchain, the launch of IntainMARKETS – a platform and marketplace for tokenized asset-backed securities – and Avalanche Spruce, where buy- and sell-side institutions are exploring the benefits of OnFi.
“Asset tokenization isn’t just the future of capital markets, it’s a critical driver of the present,” noted John Wu, President of Ava Labs. “The Avalanche Foundation is taking a big leap forward with this initiative.”
Traditionally, private market investments have largely been accessible to institutional investors and ultra-high-net-worth individuals due to operational costs and other hurdles. The use of blockchain and tokenization can solve this issue, creating efficiencies and significantly improving the investor experience.
The past year has seen both traditional financial institutions and crypto-native initiatives increasingly enable on-chain use cases with tokenized assets. “Moving parts of the asset administration process on-chain allows issuers to have one workflow and one system of record, enabling a better, more seamless user experience for service providers and investors,” explained Siddhartha, Founder and CEO of Intain, a leading structured finance platform.
A report by Security Token Advisors predicts traditional securities to be digitized within 5-10 years, with the tokenized securities market expected to hit $20T by the end of 2030. Additionally, asset manager VanEck has forecasted institutions will tokenize $25B in off-chain assets in 2023.
Avalanche, a smart contracts platform designed for infinite scalability and swift transaction finalization, facilitates businesses to launch potent, custom blockchain solutions through its novel consensus protocol, Subnet infrastructure, and HyperSDK toolkit. This recent move further solidifies Avalanche’s commitment to driving the future of asset tokenization.
