Luxembourg-based DEFYCA to Tokenize Traditional Debt Securities on Avalanche Blockchain

By Tsunami 03/10/23 12:42 AM

DEFYCA, a Luxembourg-based digital securities platform, has developed a protocol that aims to provide access to the $1.6T private debt market on-chain by tokenizing traditional debt securities and loan portfolios. The protocol will soon be launched on the Avalanche public blockchain, allowing market participants and DeFi protocols to access securitized yield from the opaque private debt market usually reserved for institutional investors.

As per data published by Broadridge, private debt funds are now managing a record $1.6 trillion in assets under management. DEFYCA’s new protocol aims to address the volatility challenges in on-chain finance and facilitate higher velocity of trading activity in traditional markets.

DEFYCA is launching a protocol on #Avalanche that aims to open access to the $1.6T private debt market on-chain by tokenizing traditional debt securities & loan portfolios.

Let’s take a look at why DEFYCA #ChoseAvalanche / 🧵 pic.twitter.com/bimwuTB0Tu

— Avalanche 🔺 (@avalancheavax) March 9, 2023

DEFYCA’s protocol will issue, securitize, and structure tokenized assets into liquid pools that can be traded instantly and without the friction inherent in traditional trading. Smart contracts will automatically execute price discovery, liability matching, settlement, and payment flows, resulting in a reduction in investment costs and time for the issuer. Additionally, participants will have the opportunity to earn tangible secured returns on stablecoins.

The Avalanche public blockchain will play a core role in the launch of DEFYCA’s platform, acting as its treasury chain and enabling participants to access liquidity across multiple blockchains with low fees and near-instant transaction finality thanks to Avalanche’s consensus protocol.

According to Alex Garmash, Co-founder of DEFYCA, “The promise of DEFYCA is to create a new phase in the evolution and democratization of the private credit markets. Our protocol will prove that Web3 can open an accessible and frictionless trading venue, where all investors can trade, and funds can raise capital using innovative tokenized securities.”

The launch of DEFYCA’s testnet application is scheduled for early March, with the team planning to formally launch on Avalanche Mainnet after a successful deployment and beta testing. The platform offers a promising solution for bringing real-world assets and off-chain collateral on-chain, making the risk profile of these applications more robust, as per Morgan Krupetsky, Director of Business Development, Institutions at Ava Labs.

Overall, DEFYCA’s protocol launch on the Avalanche blockchain holds great promise for the future of decentralized finance, as it brings greater accessibility and transparency to the private debt market while minimizing risks for investors.

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