2 months ago
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Alternative asset manager ParaFi Capital has joined forces with real-world asset tokenization giant Securitize to tokenize part of its venture fund on the Avalanche (AVAX) network.
That will allow a massive wave of investors to partake in ParaFi’s investment strategy.
ParaFi Capital managing partner and founder Ben Forman stated,
ParaFi has been among the most active investors globally in companies focused on traditional asset tokenization. However, our firm doesn’t solely want to be passive investors in this technology; we want to use it ourselves. That is why we decided to take the initial step of tokenizing a portion of our latest venture fund.
Forman believes tokenizing private market strategies will unlock smooth settlement processes and cut administrative and legal costs, introducing benefits such as programmability, cross-margining, and heightened liquidity.
Tokenization meets private markets 🤝 Alternative asset management firm with $1B+ in AUM expands its L1 blockchain footprint. ParaFi has tapped Securitize, a tokenization giant managing $950M+ in investments, to tokenize an interest in one of its venture funds on Avalanche.…
ParaFi pivots to RWA tokenization
The company’s move comes after last month’s fundraising, which saw ParaFi securing $120M from top investors like Accolade Partners and Theta Capital Management.
The firm will use the money to expand its business in the crypto sector by investing in cryptocurrency-focused funds.
Moreover, the latest move is vital for ParaFi’s growth strategy. The company plans to build a comprehensive portfolio with 30-50 stakes, underscoring its commitment to the tokenization trends.
Also, the tokenized fund will see a wide range of investors joining ParaFi’s institutional players, including family offices, endowments, and foundations. The announcement stated:
Through this tokenized fund, a new group of investors have access to ParaFi’s venture strategy and join the firm’s existing institutional investor base, which includes leading endowments and foundations, fund of funds, family offices, and blockchain founders.
Meanwhile, the tokenized interest will be tradeable on the Securitize Markets soon, allowing individuals to capitalize on Securitize Credit’s lending and borrowing.
Avalanche sees institutional demand
Avalanche emerges as a suitable option for institutional players due to features like sub-second finality, EM compatibility, customizability, low fees, and a massive pool of tokenized assets.
Ava Labs president John Wu commented on the recent ParaFi support,
Financial markets demand innovation, and recently, we’ve seen significant leaps forward in the evolution of financial assets leveraging blockchain and tokenization as enablers for greater access and utility. ParaFi and Securitize continue to innovate within the ecosystem, and I’m thrilled to see the Avalanche platform support ParaFi’s first steps into tokenizing fund interests.
AVAX price outlook
The native token maintains a bullish stance after jumping from the daily low of $23.46 to $24.06.
AVAX traded at $23.70 during this publication, reflecting a slight dip from its 24-hour high. Moreover, the 26% dip in daily trading volume suggests weakness in the current uptrend.
Source – CoinmarketcapAvalanche’s current price performance reflects the broad market outlook. Nonetheless, the increasing interest from institutions will trigger solid rebounds once bulls dominate the crypto space.
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