The Avalanche Foundation has launched a program Avalanche Vista to demonstrate support for asset tokenization. The foundation, via the program, is setting aside about $50M for the purchase of tokenized assets on the Avalanche Blockchain.
Tokenization refers to the process of developing an on-chain digital representation of a real-world or off-chain asset. The $50M set aside for the program tells Avalanche Foundation’s strong interest in driving an inclusive financial system through their ecosystem architecture.
According to Avalanche, it is a step toward accelerating the growth of tokenization and on-chain finance. The assets to be considered on the Avalanche Vista spans the liquidity spectrum to include “equity, credit, real estate, commodities, as well as those that are blockchain-native,” Avalanche said.
Before the launch, other initiatives in the direction of Avalanche’s program relating to tokenization include the KKR fund on the Avalanche blockchain, the launch of IntainMARKETS, and the launch of Avalanche Spruce.
As identified by Avalanche, over time broader access to private market investing has been a challenge for the industry. “Among the barriers preventing broader access and smaller investment minimums have been high operational costs to facilitate manually-intensive functions,” Avalanche states.
However, the proffered solution by the foundation is the combination of on-chain asset issuance and administration. “This will enable technologies that create significant efficiencies in these processes and improve the asset issuer and investor experience,” Avalanche said.
Looking at the solution the foundation proposed, Siddhartha, Founder, and CEO of Intain, said that “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.”
Following the program launch, John Wu, President of Ava Labs commented that “Asset tokenization isn’t just the future of capital markets, it’s a critical driver of the present.”
In the predictions of VanEck, an asset manager institution will tokenize $25B in off-chain assets in 2023. Moreso, Black Rock CEO said that the next generation for markets, the next generation for securities, will be tokenization of securities.”
Also, the Avalanche Foundation initiative brought to light via the Avalanche Vista program is supported by a report by Security Token Advisors, showing that “77% of capital markets participants believe traditional securities will be digitized within 5-10 years. Additionally, the report said that ”the size of the tokenized securities market alone is expected to grow to $20T by the end of 2030.”
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