AllianceBlock, which is developing decentralized and trustless gateways between traditional finance (TradFi) and decentralized finance (DeFi), has now announced a partnership with Alpha Blue Ocean’s private digital asset investment arm, ABO Digital, to provide tokenized structured products to institutional investors and crypto projects and organizations looking for alternative funding.
The groundbreaking partnership with ABO Digital will see the company use its decentralized and trustless blockchain infrastructure, as well as the Nexera Protocol, to tokenize conventional financial instruments, with the added benefit of allowing these tokens to be wrapped in conventional Actively Managed Certificates (AMCs) for investors who prefer not to hold digital assets, as per the information shared with Finbold on March 16.
By developing the idea of structured financial instruments in crypto, AllianceBlock would allow previously inaccessible assets to be tokenized and made available to conventional institutions as the market develops, creating a smooth gateway between TradFi and DeFi. CEO of AllianceBlock, Rachid Ajaja, noted:
“Through this strategic partnership, AllianceBlock is set to revolutionize the industry by leveraging its infrastructure to tokenize traditional financial instruments and new instruments for the digital asset space, taking a giant leap forward in providing institutions with a more compliant and risk-averse way to take advantage of DeFi’s benefits.”
ABO Digital provides alternative financial investments
ABO Digital was established to provide convertible bonds, debt issues, and warrants/options to the digital asset market, giving companies access to the funding they need to expand their client and revenue bases. Tokenization presents an opportunity for ABO Digital to provide alternative financial investments to institutions.
Amine Nedjai, CEO of ABO Digital, stated:
“Together, ABO Digital and AllianceBlock represent the perfect combination of innovation, expertise, and professionalism in the cryptocurrency market. With our combined effort, we aim to bring a fresh perspective to the world of decentralized and traditional finance and attract more institutional capital providers.”
As an alternative to issuing tokens to market makers or venture capitalists via a Simple Agreement for Future Tokens (SAFT), the structured products offered will allow crypto projects to gain access to additional liquidity from institutional capital providers while maintaining full compliance.
The capital and liquidity needs of the project will inform ABO Digital’s role in the collaboration, during which the company will assist in negotiating and structuring financial instruments. Using the infrastructure provided by Nexera Protocol and the identity management framework provided by NexeraID, AllianceBlock will tokenize and transform them into compliant AMCs.
Ultimately, institutional and individual investors will gain from the opportunity to invest in potential crypto initiatives utilizing more risk-averse and regulated financing arrangements.
For instance, ABO Digital and AllianceBlock will enable big crypto funds, private equity firms, and other market players to invest in tokenized shares, options, bonds, funds, and AMCs, further connecting the crypto community to regular financial markets. Tokenization will let these new assets reach new investors in both sectors, enhancing market liquidity.