Tokenization Specialists Securitize and Ethena Unveil Institutional DeFi Blockchain
Securitize and Ethena Labs have made a significant stride in the fusion of traditional finance and decentralized finance (DeFi) with the launch of their Ethereum-compatible blockchain, Converge. This innovative platform is poised to serve as a dedicated home for tokenized assets, catering specifically to institutional investors seeking to leverage the benefits of DeFi.
At the heart of this development is BlackRock’s money market token, BUIDL, which serves as a cornerstone for both Securitize’s and Ethena’s offerings. Ethena has developed a yield-bearing USDe token, as well as a USDtb stablecoin backed by BUIDL. The company is on track to migrate its robust $6 billion DeFi ecosystem to the Converge blockchain.
Securitize, which acts as the transfer agent for BlackRock’s BUIDL token, is planning to bring a range of tokenized real-world assets (RWAs) onto this new chain. This includes assets such as the recently launched Apollo credit fund token. The collaboration signals a growing trend among traditional financial institutions eager to explore the possibilities offered by tokenization.
Carlos Domingo, CEO of Securitize, highlighted the strategic advantages of tokenization, stating, “Tokenization, per se, is just putting your securities on a different ledger, and it produces cost savings and efficiencies, but it doesn’t necessarily lead to anything significantly different in terms of what you can do with these assets.” He underscored the potential of bringing DeFi innovations into the RWA space to drive substantial growth.
The initial ecosystem of partners for Converge includes notable firms such as Pendle, Avara (the parent company of Aave Labs), Ethereal, Morpho, and Maple Finance. Custodial services will be anchored by firms like Copper, Fireblocks, Komainu, and Zodia, while cross-chain interoperability will be enhanced with solutions from LayerZero and Wormhole, along with oracle support from RedStone.
Looking towards the future, Ethena founder Guy Young anticipates exciting developments on the Converge blockchain. He noted that new financial products will emerge that might use tokenized assets as collateral within custom-built money markets, potentially allowing for the trading of various assets—including equities—at unprecedented scales.
The Converge blockchain is designed to seamlessly integrate with the Ethereum Virtual Machine (EVM), enabling the execution of Ethereum-based smart contracts, decentralized applications (dApps), and other tools without the need for modifications, while maintaining performance on par with leading blockchains.
Ethena’s native governance token, ENA, will function as a stakeable asset (via sENA) within the Converge network, ensuring security through a permissioned validator set consisting of traditional finance players and centralized exchanges. Additionally, USDe and USDtb will act as gas tokens, facilitating transactions across the network.
One of the key features of Converge is its approach to compliance, offering a public open chain with a comprehensive know-your-customer (KYC) wrapper. Carlos Domingo elaborated on this, stating that the framework goes beyond basic wallet whitelisting. He explained that the context of DeFi, typically built for permissionless and anonymous transactions, must adapt to involve regulated instruments, necessitating more sophisticated compliance measures.
The launch of Converge represents a critical step forward in the integration of decentralized finance with mainstream financial systems, providing a framework for innovation and collaboration between the two worlds.
