Tokenized Securities on Ethereum, Polygon, Gnosis Surge to $225M Market Cap

Tokenized Securities on Ethereum, Polygon, Gnosis Surge to $225M Market Cap

The tokenization trend is on the rise with a market capitalization of over $220 million and firms like Matrixport and Backed Finance issuing tokenized securities like government bonds and ETFs on Ethereum, Polygon, and Gnosis Chain.

The tokenization tendency is gaining momentum.

A Dune dashboard shows that the niche now boasts a market cap of greater than $220 Million across the 6 projects measured.

Tokenization refers to issuing financial securities, like stocks and bonds, on the blockchain.

Corporations like Matrixport, Backed Finance, Ondo, and Franklin Templeton have all created ERC-20 crypto tokens, representing Government bonds or exchange-traded funds (ETFs)stock.

The previous  30 days, for instance, Franklin Templeton tapped Polygon to host a tokenized version of its Nasdaq-listed OnChain United States Government Money Fund (FOBXX). Elsewhere, Backed Finance launched a tokenized version of Coinbase’s stock on Ethereum.

Per the same Dune dashboard, the collection of corporations in the niche has announced tokenized securities on Ethereum (ETH), Polygon, and Gnosis Chain. The bulk of activity is, on the other hand, occurring on Ethereum.

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Ondo and MatrixDock dominate the market with 61.4 percent and 32.1 percent share, with mostly short-term United States Government bonds, which as of now yield 4 percent to 5 percent owing to the hike in benchmark interest prices by the Federal Reserve.

Both Ondo and MatrixDock provide tokenized securities on United States Government bonds supplying a suite of digital investment management tools, trading services, and financial products.

Ondo likewise offers a lending service was known Flux, allowing users to put their ERC-20 securities crypto token as collateral. Up to now, users have added bonds worth $41.2 Million as collateral.

Backed Finance’s tokenized fixed-income bonds are likewise accepted as collateral on protocols of  Decentralized Finance like Angle and Ribbon Finance.

In addition to issuing United States Treasury Bills, the Swiss-based company likewise collaborated with the world’s largest investment fund manager BlackRock to trade and own an ERC-20 version of BlockRock’s ETF of over 400 corporations in the S&P 500 index.

Backed Finance’s head of marketing Kit Popplestone informed Decrypt that the “interoperability betwixt tokenized assets and Decentralized Finance platforms opens up whole lot of opportunities for new products and makes lending more efficient.”

Tokenization tendency on the rise

BlackRock’s CEO Larry Fink thinks that tokenization of securities will form “ the following generation for markets.”

Fink noted in a New York event a year ago that tokenized securities provide advantages such as instantaneous settlement, reduced charges, and simple integration in BlackRock’s business model.

Citi Bank analysts shared similar opinions in a March 2023 report, keeping in mind that monetary authority digital currencies— was known CBDCs—and tokenization would drive adoption.

Although while blockchain tech shows promise of innovation with tokenized securities, regulatory clarity has restricted growth and adoption.

“To continue this rapid growth, we must regulatory clarity and consistency, and just as significantly, crypto tokens must be interoperable and composable with DeFi,” stated Popplestone.

Nevertheless, he also mentioned that as the worldwide interest in monetary authority digital currencies and on-chain assets rises, the demand for tokenized securities “is only going to increase.”


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