- Avalanche announces collaboration with J.P. Morgan and Apollo under Project Guardian to connect with a permissioned Avalanche Evergreen Subnet for fund management.
- The initiative demonstrates how blockchain can automate portfolio management and includes tokenization and smart contracts for more efficient asset management.
Revolutionizing Asset Management with Blockchain
Avalanche, a leading player in the blockchain space, has announced a significant collaboration with financial giants J.P. Morgan and Apollo Global under Singapore’s Monetary Authority (MAS) Project Guardian. This collaboration showcases a proof-of-concept (PoC) that could potentially revolutionize the asset and wealth management industry.
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
Project Guardian: A New Paradigm in Finance
The PoC under Project Guardian demonstrates the innovative application of blockchain technology, smart contracts, and tokenization to potentially automate portfolio management. This includes the integration of alternative investments (“alts”) alongside liquid assets in discretionary portfolios. Traditionally, portfolios have been under-allocated to alts due to operational complexities, but this initiative seeks to address these challenges.
Onyx Digital Assets and Tokenization
The initiative builds upon the Onyx Digital Assets platform, which already processes $1B-$2B in tokenized assets daily. Onyx Digital Assets utilized various interoperability protocols to connect with assets tokenized on other blockchains. LayerZero played a pivotal role in linking Onyx Digital Assets with a permissioned Avalanche Evergreen Subnet. This connection facilitated the management of funds offered by WisdomTree, a leading asset manager and pioneer in fund tokenization.
Customized Blockchains for Institutional Applications
Avalanche Evergreen Subnets are tailor-made blockchains designed for institutional use. They feature customizable aspects like EVM compatibility, network privacy, custom gas features, and permissioning at various levels, including validation, smart contract deployment, and transactions.
Blockchain as a Catalyst in Financial Services
Leaders in financial services are increasingly recognizing blockchain’s potential to enhance traditional capital markets infrastructure and institutional workflows. Firms like WisdomTree are participating in Spruce, another Evergreen Subnet, to explore the benefits of on-chain finance.
The Vision of Ava Labs
Ava Labs, the company behind Avalanche, is committed to providing the technology and tools necessary to digitize and tokenize global assets. John Wu, President of Ava Labs, emphasized the alignment of this initiative with their mission to harness Avalanche’s speed, scalability, and customizability.
Key Learnings from the Initiative
The PoC yielded several insights:
- Inclusion of alts in portfolios: Tokenization can standardize and automate the management of investments in alts, simplifying funding and settlement processes.
- Efficiency and scalability: The deployment of smart contracts for discretionary portfolios can enable automated rebalancing and linkage to representative models.
- Broadening the investable universe: Interoperability protocols allow access to funds on various blockchain platforms without moving assets from their original ledger.
- Enhancing the blockchain user experience: Solutions like Biconomy’s Paymaster service simplify blockchain interactions by managing transaction fees and private keys.
This collaboration under Project Guardian represents a significant stride in asset and wealth management, showcasing the transformative potential of blockchain technology. As the initiative progresses, it stands to redefine the landscape of investment management, offering personalized and efficient solutions at scale.