Stablecoin creator Ethena Labs and the real-world asset (RWA) tokenization firm Securitize are set to launch a new blockchain aimed at retail and institutional investors looking to engage with DeFi and the tokenization landscape.
On March 17, an announcement revealed that the upcoming Converge blockchain will operate as an Ethereum Virtual Machine, enabling retail investors to access "standard DeFi applications." Additionally, it will focus on offering institutional-grade services designed to connect traditional finance with DeFi prospects.
The Converge blockchain will debut with a range of product offerings, including those from Ethereal, Morpho, Maple Labs, Pendle, and Aave Labs’ Horizon.
This platform will leverage Securitize’s expanding influence in the tokenization space, with close to $2 billion minted across multiple blockchains. Recently, Securitize disclosed that BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL) has surpassed $1 billion in net assets just a year after its inception.
Custodial services for the Converge blockchain will be provided by Anchorage and Copper, alongside support from Securitize’s new partner, RedStone.
In terms of DeFi features, Converge will enable users to stake Ethena’s native governance token, ENA. The network’s gas tokens will include Ethena’s USDe (USDE) and USDtb stablecoins.
Institutional DeFi on the Rise
The concept of institutional DeFi — where traditional financial institutions implement regulatory-compliant DeFi infrastructure — seems to be gaining momentum as organizations seek to enhance their operations and tap into new yield opportunities.
Even previously skeptical entities like JPMorgan have acknowledged that institutional DeFi "holds the potential for growth and transformative impact."
The rise of RWAs fuels this trend, with projections from firms like McKinsey estimating a $2 trillion tokenization market by 2030.
As noted by Michael Bucella, co-founder of Neoclassic Capital, in a discussion, RWAs are drawing significant investments due to their ability to address “pricing inefficiencies” across both traditional and digital asset classes.
“To traditional finance, that translates to mispriced credit facilities (i.e., cost of capital) or inadequate exposure to undervalued volume. From a crypto perspective, these are low-volume, secure assets,” Bucella explained.
Incorporating stablecoins, which are digital representations of fiat currencies, the overall RWA market has surpassed $240 billion, as per industry statistics.
When excluding stablecoins, the combined value of RWAs on-chain is nearing $20 billion, spread across more than 90,500 holders.
This growth is illustrated by the substantial issuance of RWAs, particularly stablecoins, US Treasury, and private credit debt.