ParaFi Capital, a leading digital asset manager backed by notable investors such as Henry Kravis of KKR & Co., has announced the tokenization of part of its portfolio on the Avalanche blockchain.
Launching 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 that included endowments, foundations, family offices, and other investors.
Collaboration 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, according to the Avalanche team. 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 ParaFi Capital's portfolio on the Avalanche blockchain represents a significant step in digital asset management, expanding investment access and improving market liquidity.
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