1. ParaFi Capital Fund Tokenization
2. Working with Securitize and Avalanche
3. Market Context and Future Outlook

ParaFi Capital, a leading digital asset manager backed by notable investors such as Henry Kravis of KKR & Co., announced plans to tokenize a portion of its portfolio on the Avalanche blockchain.

ParaFi Capital Fund Tokenization

ParaFi Capital will tokenize a minority portion of its latest venture capital fund, which closed in May. The tokenized Limited Partner (LP) interest will be available on the Securitize platform and will operate on the Avalanche blockchain. By tokenizing a portion of its fund, ParaFi aims to broaden investor access beyond its traditional institutional base, which includes endowments, foundations, family offices, and other investors.

Working with Securitize and Avalanche

Securitize is a leading firm in the tokenization of real-world assets and has established a track record with high-profile partners like BlackRock, Hamilton Lane, and Tradeweb Markets. The platform manages over $950 million in investments and provides infrastructure for transitioning traditional assets onto modern blockchain rails. On the contrary, Avalanche has emerged as one of the leading blockchain platforms due to its fast transaction finality, low fees, and EVM compatibility. The network’s architecture supports a diverse range of tokenized assets and provides an ecosystem for financial operations. ParaFi's use of Avalanche aligns with the network's expansion into tokenized asset management. At the time of writing, Avalanche has 1.553 billion in total value locked (TVL).

Market Context and Future Outlook

The tokenization of assets is gaining momentum in the financial sector. Recent data from OurNetwork shows that the market for tokenized real-world assets has surpassed $10.9 billion. The market continues to expand, with significant investments from firms like BlackRock, which launched its BlackRock USD Institutional Digital Liquidity Fund (BUIDL) on the Ethereum blockchain in 2023. The tokenization trend is expected to continue its upward trajectory. According to global bank Citi, the market for tokenized assets could reach $5 trillion by 2030.

The tokenization of part of ParaFi Capital's fund on the Securitize platform and Avalanche blockchain marks a significant step in the evolution of digital assets. It expands investment opportunities and fosters greater liquidity and accessibility in the market.