Avalanche Foundation to spend $50m for asset tokenization

Avalanche Foundation which maintains the Avalanche blockchain network recently announced that it will be spending $50 million to purchase tokenized assets that are minted on its network. Making the announcement on July 25, 2023, the foundation said that the move is part of a new programme called Avalanche Vista. With this new initiative, the foundation will be striving to bring the digital versions of multiple traditional investment products like credit, real estate, equities, and commodities to Layer 1 blockchains.

If there’s one trend that has emerged majorly in 2023, it’s tokenization. Even mainstream financial services companies like Franklin Templeton are following suit with crypto-native firms to offer traditional financial assets like government bonds as blockchain-powered tokens. It won’t be wrong to say that blockchain is giving real-world assets (RWA) like bonds a makeover to ramp up their impact.

International business advisory company Boston Consulting Group estimates that the market for tokenized assets could grow to $16 trillion by 2030.

Why tokenization is the talk of the town

According to Intain CEO Siddhartha S, moving parts of the asset administration process to a blockchain enables innovators to streamline the workflow with just one system of records. He goes on to say that the move also facilitates better user experience for both investors as well as service providers.

Just look at the current cryptocurrency market for how fast tokenization has been gaining traction. The world’s largest smart contracts platform and leading blockchain, Ethereum offers a wide array of tokenized assets. At the same time, smaller blockchain networks like Polygon, Solana, and Stellar are also waking up to the benefits of tokenized assets, as per rwa.xyz, which is an RWA data platform.

The trend of tokenization of assets is in tandem with how decentralized finance has been making rapid strides. Be it live cryptocurrency prices or the top ten cryptocurrencies, information about cryptocurrencies can be accessed with just a few clicks. Even if you have a random query like how to invest in cryptocurrency in India or cryptocurrency tax in India, there are multiple blockchain-related news sources to get the required information.

Avalanche Vista is in tandem with Avalanche Foundation’s aim to help financial institutions with testing and deploying blockchain-based services on its subnets. In April, there were reports that asset management firms like T. Rowe Price and WisdomTree were among the companies that had joined Avalanche’s testing.

In September last year, global investment company KKR opted to tokenize a part of its private equity fund by leveraging the Avalanche blockchain and Securitize.

The development was welcomed by the international crypto community and was well-covered by cryptocurrency news in India.

Avalanche is a Layer 1 blockchain that has been designed as an Ethereum challenger. Its key USP is a range of cutting-edge tools for deploying dApps and smart contracts. Developers can also scale their dApps seamlessly while enjoying high-speed transactions. The Avalanche network is made up of small sovereign networks which are called subnets. Its native cryptocurrency is AVAX token and it is used for all kinds of transactions on the network. 

Disclaimer: This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.

Author: Puskar Pande

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