Backed, Chainlink, Sonic, and Fortlake Asset Management announced a partnership to tokenize Fortlake's Sigma Opportunities Fund, marking a significant milestone in the process of taking traditional financial assets to the blockchain.
Backed is tokenizing the fund by creating permissionless tokens. The asset tokenization pioneer's solution features 1:1 fund unit collateral, with the price pegged to the real-time Net Asset Value or NAV. This means the tokens are ready to be deployed within Sonic's ecosystem. Previously known as Fantom, the high-speed EVM L1 blockchain provides appealing incentives and powerful infrastructure to developers.
Chainlink is well-known as the golden standard for blockchain finance. Its SmartData will deliver the underlying fund shares' NAV data to the blockchain, while Chainlink CCIP will allow for seamless cross-chain operations and liquidity. Chainlink Proof of Reserves will help verify AUM and collateralization.
Sonic is widely recognized for its focus on developer experience, cutting-edge consensus mechanism, and transaction speed: 10,000 transactions per second at one-second finality. For these reasons, it is a popular choice for DeFi protocols and other decentralized applications. It is well-suited as a platform for tokenizing real-world assets thanks to its ability to handle a high transaction volume with minimal latency.
Fortlake won in the Fixed Income category at the 2024 Fund Manager of the Year awards in Australia. Sigma Opportunities Fund, an actively managed international fixed-income product and investment strategy, targets a minimum of 7% above the federal funds rate, up to 10%. The impressive returns are achieved by leveraging market distortions. The fund's active fixed-income investment returns have amounted to 10% so far in 2024.
Adam Levi at Backed described the tokenization of Fortlake's Sigma Fund as a milestone in the blockchain landscape. It demonstrates how institutions can leverage blockchain tech to streamline back-office operations and attain capital on higher levels. The partnership reflects the platforms' commitment to transforming financial asset trade and management.
Fortlake's Sigma Fund is the flagship fund to go through Backed's Tokenization-as-a-Service (TaaS) platform. The accomplishment emphasizes Backed's expansion into private tokenization, and the platform will continue to offer similar solutions for other financial institutions. Backed will explore new opportunities to broaden its services, giving the blockchain ecosystem improved access to tokenized assets and greater flexibility.
Colin Cunningham, Head of Tokenization & Alliances at Chainlink Labs, is excited by the prospect of working with Fortlake and Backed on the first real-world assets tokenized on Sonic. He hopes Chainlink, as the standard for on-chain finance, will assist in driving the adoption, liquidity, and utility of Fortlake's tokenized fund.
Sonic's Business Development Lead, Sam Harcourt, labeled the partnership as one of Sonic's first steps in its journey to tokenizing financial assets worldwide and bringing the advantages of its technology to TradFi.
Christian Baylis, Founder and CIO of Fortlake described the collaboration with Sonic, Backed, and Chainlink to tokenize Sigma as a significant development. Specifically, Fortlake is providing its rapidly growing body of digital asset investors with alleviated access to its fund. This is why Baylis believes the partnership marks the beginning of a new epoch in conventional asset management fundraising.
Tokenizing Sigma Fund will lead to new opportunities within DeFi, such as margin trading collateral, high-yield stablecoin savings, and integrations with lending markets. World-leading asset manager BlackRock recently joined the tokenization race, and other platforms are following suit, keen to explore new opportunities in the space. JP Morgan, the Hong Kong Monetary Authority, and other institutions' tokenization experiments have enabled significant savings through blockchain-based tokenization. According to the Bank of America, the asset tokenization market could exceed $16 trillion in as little as five years from now.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice
