🤝 Security Token Prime Mid-Week Insights: 6/13/2024

Exclusive Intelligence for Security Token Prime Members

Summary and Key Takeaways

1. Fidelity International Enters the Tokenized Money Market Fund Race

The hottest tokenization trend of 2024 is liquidity products: treasuries, money market funds, and similar instruments. Quickly headed for $2B in total market size, Fidelity may be the reason it gets there within a month. Leveraging JP Morgan’ Onyx platform, the fund was announced notably by the international division of Fidelity, likely due to US homeland compliance issues. The purpose is for the use of Onyx's TCN (Tokenization Collateral Network) to use for collateral/ lending, a fantastic use case leveraging the near instantaneous transaction speeds via tokenization.

2. New Avalanche Infrastructure Fund Tokenized by Oasis Pro

Avalanche has grown as a preferred blockchain for RWAs over the years, including being selected by multiple institutions for their Avalanche Subnets (permissioned instances). R&S is launching a fund via Oasis Pro and putting their money to work to invest in the Avalanche ecosystem and capitalize on its growth. Investments from the $5M fund could consist of the native AVAX token, running validators to earn staking rewards, and a diverse portfolio of companies and applications integrated or building on Avalanche. There’s a $100K minimum for interested investors, contact Bob Yostpille for more details at [email protected].

3. Brickken Selected for EU Blockchain Regulatory Sandbox

This week Brickken announced they were chosen to participate in the sandbox set up by the European Commission, which will help the Spanish firm further expand upon its €200M in tokenized assets into all of Europe presumably. One of the most productive models for regulators to work with tokenization providers is by setting up sandboxes that firms can apply to in order to launch with regulatory support, guidance, and close review. This process helps companies ensure they aren’t innovating beyond the legal capacity of the respective jurisdiction while helping educate regulators on the potential and applications of this technology. The US lacks this, favoring the regions that do encourage industry participation through the Sandbox model. 

4. Ripple and Archax Extend Their Partnership From 2022

Ripple continues to march head on into the sector now formally announcing that their original partnership between Archax and Metaco, the custody arm created by Archax that was later acquired by Ripple, will be extended in order to onboard hundreds of millions in RWAs onto the RippleX platform. This move seems to be more marketing fluff as no token issuances were announced but makes sense because in 2022 it wasn’t sexy to talk about RWAs and now it is. 

5. RWAs Are Helping Onchain Adoption for the Fortune 500 According to Coinbase

Can you imagine when household brands start offering tokenized bonds or perks? The largest corporations in the world are beginning to understand the difference between cryptocurrencies and blockchain. Not to say they aren’t interested in Bitcoin and Ethereum at least, as Coinbase’s latest reports cites the ETFs as a major driver for adoption. They also cite stablecoins and RWAs as the other 2 catalysts for why 29% of Fortune 500 respondents said they were exploring the technology. When we start seeing recognizable brands onboard millions of RWA securities holders, tokenization can start to compete with TradFi public markets altogether. 

Notable Mid-Week Market Headlines

Security Token Prime Member Spotlight

STP member Tyler Vinson, CEO of REtokens recently came on the Security Token Show to talk about their $30M in real estate being tokenized on Polymesh, including what we believe to be the first tokenized church!

We are proud to work with REtokens to bring tokenized real estate to the world. This is just the beginning of our exciting relationship and we look forward to REtokens’ growing asset list and continued success

Graeme Moore, Head of Tokenization at the Polymesh Association

Did you miss that interview? Watch the replay here (13:06):

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Herwig’s Pick: Ondo Finance

Kyle’s Pick: Watford FC

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