Article Rewrite:
Update: 22:15 March 5, 2024 UTC: Following the publication, a representative from Trident clarified that the loan is not on-chain, as initially stated. Therefore, the reference has been removed.
A group of institutional investors has utilized the Avalanche blockchain to tokenize a loan and send it to a counterparty.
According to an announcement made on March 5, venture capital firm Electric, which manages assets worth over $1 billion, has extended an undercollateralized AVAX (AVAX) loan with 4x leverage to a proprietary trading firm. The loan was facilitated by Trident Digital Group and Membrane Labs. Anthony DeMartino, co-founder and CEO of Trident, stated, “For our product to be effective, we needed the terms to be commercially viable, the counterparties to be legitimate, and the token to be in high demand. While BTC and ETH are readily available, our focus will be on lending altcoins.”
Meanwhile, John Wu, the president of Avalanche developer Ava Labs, acknowledged that there is currently limited interest from investors in unsecured lending or overcollateralized borrowing since the collapse of Genesis Trading in 2022. However, Wu believes that the development of new tools will facilitate the return of institutional investors to real-world asset tokenization. Prior to the collapse of FTX, the crypto lending market reached a peak value of $80 billion.
The Avalanche ecosystem is also expanding into other areas. On January 16, Cointelegraph reported that Avalanche is embracing the culture of memecoins with a dedicated $100 million investment fund for such ventures, including investments in nonfungible tokens. In an interview, Paps, CEO of Avalanche project Husky Avax, stated, “While those outside of Avalanche may not have noticed, Avalanche has been dedicating significant time, effort, and funds to culture over the past two years.”
Related: Avalanche Foundation to Commence Purchasing Memecoins for Cultural Purposes