Onyx by J.P. Morgan and Apollo Global Forge New Frontiers in Asset Management with Avalanche Blockchain
In a groundbreaking collaboration under the Monetary Authority of Singapore’s (MAS) Project Guardian, Onyx by J.P. Morgan and Apollo Global have unveiled a proof-of-concept (PoC) that signals a transformative leap in the asset and wealth management sector. This initiative showcases the potential of blockchain technology, smart contracts, and tokenization in revolutionizing portfolio management, bridging the gap between traditional and alternative assets.
The PoC marks a milestone by demonstrating how blockchain and tokenization can automate portfolio management, integrating alternative assets (alts) seamlessly alongside liquid assets in discretionary portfolios. Historically, these portfolios have underrepresented alts due to their operational complexities in trading and administration. However, this collaboration pioneers a new approach, leveraging technology to streamline and simplify the inclusion of assets like private equity, private credit, real estate, and infrastructure.
Onyx by @jpmorgan and @apolloglobal have announced a collaboration under Project Guardian, leveraging @LayerZero_Labs to connect Onyx with a permissioned Avalanche Evergreen Subnet, which facilitated subscriptions and redemptions for funds offered by @WisdomTreePrime. pic.twitter.com/AjQtLNKCKG
— Avalanche 🔺 (@avax) November 15, 2023
The initiative builds upon the solid foundation of Onyx Digital Assets, which has already processed an impressive $1 billion to $2 billion in tokenized assets daily and settled over $950 billion in tokenized treasuries since its launch.
In preparation for a future accommodating multiple blockchains, Onyx Digital Assets has utilized interoperability protocols to tap into assets tokenized on blockchains beyond its Consensys Quorum-based platform. This move led to a collaboration with Avalanche Evergreen Subnet through LayerZero, facilitating subscriptions and redemptions for funds offered by WisdomTree, a pioneering asset manager in fund tokenization.
Avalanche Evergreen Subnets, designed for institutional applications, incorporate tailored features such as EVM compatibility, permissioning, smart contract deployment, transaction privacy, and custom gas functionalities. These attributes, unique to enterprise blockchains, harness the innovation and integrations of public networks while catering to specific industry needs.
Financial industry leaders increasingly recognize the potential of blockchain, smart contracts, and tokenization in reshaping capital markets infrastructure and institutional workflows. Institutions like WisdomTree are actively engaged in Spruce, another Evergreen Subnet, exploring on-chain finance benefits.
“This initiative under Project Guardian aligns with Ava Labs’ mission to digitize and tokenize assets, leveraging Avalanche’s speed and scalability,” stated John Wu, President of Ava Labs. “We’re thrilled to collaborate with industry leaders shaping the future of finance.”
The PoC yielded valuable insights, validating key benefits:
- Inclusion of alts: Tokenizing investments streamlines management, automating funding, order execution, and settlement for traditional and alternative assets.
- Efficiency and scalability: Smart contracts linked portfolios to models, demonstrating mass rebalancing capabilities.
- Interoperability: Wealth managers accessed funds tokenized on various blockchains without asset movement, broadening the investable universe.
- Enhanced user experience: Innovations like Biconomy’s Paymaster simplified blockchain interactions, abstracting complexities in fee payments and key management.
Tyrone Lobban, Head of Onyx Digital Assets, highlighted the PoC’s significance, envisioning a transformed landscape for asset and wealth management through blockchain technology.
While operationalized in a testnet environment, this initiative charts a bold path toward personalized investment portfolios, promising streamlined order execution and settlement processes at scale.
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