ParaFi Capital partially will tokenize a $1,2 billion fund on the Avalanche blockchain

What’s new? Digital asset management company ParaFi Capital will partially tokenize its $1,2 billion venture fund on the Avalanche blockchain and launch share trading on the Securitize platform. ParaFi founder Ben Foreman said the company wants to not only invest in infrastructure projects in tokenization but also use the technology itself.

Material by Bloomberg

What else is known? Previously, ParaFi invested in Securitize and Avalanche. The company itself completed a $120 million funding round in August with participation from Theta Capital Management and Accolade Partners.

When a fund is tokenized, ownership interests (shares) are converted into digital tokens stored and managed on the blockchain. Each token represents an ownership stake in the underlying asset and can be traded on digital platforms.

Tokenization lowers the barrier to entry, allowing more than just institutional and wealthy investors to participate in trading.

The Avalanche blockchain, which ParaFi is using to tokenize the fund, has a native token, AVAX. It ranks 13th in the overall cryptocurrency market capitalization ranking with a market cap of $9,8 billion and is trading at $24,05, having added 2,1% overnight. Weekly growth was 12,2%, with the asset’s value down 38% since the beginning of the year.

In March, BlackRock, the world’s largest investment company, launched its BlackRock USD Institutional Digital Liquidity Fund (BUIDL) on the Ethereum blockchain in partnership with Securitize. BlackRock later led Securitize’s $47 million funding round.

BUILD has a capitalization of $514 million and a market share of 30,74%, according to Dune. In total, more than $1,6 billion worth of securities have been tokenized as of September 13. Citi Bank predicts that by 2030 the tokenization market will reach $5 trillion.

In July, it became known that the leading US crypto exchange Coinbase will launch a tokenized money market fund together with Apex Group, which manages over $3 trillion in assets.

In August, the Association of Financial Markets in Europe (AFME) called on local companies to use blockchain to tokenize bonds and politicians — to create a favorable regulatory framework to facilitate the introduction of the technology.