Crypto Firm Avalanche Sets $50 Million Aside to Purchase Tokenized Assets

The crypto firm known as the Avalanche Foundation has set aside roughly $50 million to buy new tokenized assets that have been created on its layer-1 blockchain.

Avalanche Has Big Tokenization Plans

This inherently created a new division for the company known as Avalanche Vista, which will seek to establish the value of future tokenization in sectors such as equity, credit, commodities, and real estate. John Wu – the president of Ava Labs, the company that oversees Avalanche – said in a statement:

It creates a faster, more efficient way for companies to issue assets, individuals to own them, and everyone to transfer value… Our mission is to tokenize the world’s assets. Vista is our next show of commitment to do that. It’s not just dollars involved, but commitment to help web2 players work with us and explain tokenization.

Tokenization is what most blockchains are all about. The idea of taking assets, tokenizing them (i.e., putting them in digital form), and recording them permanently to a blockchain network ensures they’re always transparent and become available to those who would otherwise not garner the same chances as others with higher degrees of riches to their names.

As it stands, many blockchain companies are working to tokenize art and other assets that would otherwise remain purely in physical form. Non-fungible tokens (NFTs) are examples of tokenized art. Rather than someone buying a painting or a picture they might deem significant or worthy of attention, what they instead do is buy a fraction of it or a digital version of it. This allows multiple people to take part in ownership and opens more doors to the democratization of assets.

Wu also thinks there are many other benefits to tokenization such as operational efficiency, improved liquidity, and accessibility to new users. He also said that all blockchain transactions can occur quickly, and transparency is top-notch given investors can view their assets on-chain anytime they wish. He said:

People are seeing that this concept of instant settlement doesn’t really exist in the real world. Clearing in a traditional system takes a couple of days, and that’s trillions and billions locked up for a period. That can be done in a more efficient manner [on the blockchain] instantly.

Why This is a Big Deal

His views are shared by several other members of the crypto community such as Tyrone Lobban, the head of blockchain at JPMorgan’s Onyx. Lobban said:

Over time, we think [of] tokenizing U.S. Treasuries or money market fund shares, for example, mean[ing] these could all potentially be used as collateral in DeFi pools. The overall goal is to bring these trillions of dollars of assets into DeFi so that we can use these new mechanisms for trading, borrowing, [and] lending, but with the scale of institutional assets.