Securitize Introduces sToken to Unlock Liquidity for RWA

Securitize and Elixir have teamed up to launch sToken as an RWA liquidity generating tool for TradFi and DeFi investors.

Key Notes

Securitize has introduced the sToken on the Ethereum blockchain.The token wll serve as a bridge RWA with yield-generating capabilities.Despite being minted by Securitize, Elixir will also play a crucial role in its administration.

In an era where tokenization continues to reshape finance, Securitize has taken a bold step forward. The tokenization firm has recently introduced an innovative way for institutional investors to unlock liquidity from real-world assets (RWAs). The firm revealed this is achievable without sacrificing the generated yields.

This innovation, dubbed the “sToken”, is the product of a strategic partnership between Securitize Credit and the decentralized dollar project Elixir. This collaboration aims to bridge traditional finance and Decentralized Finance (DeFi) in a unique way. Ultimately, it might transform the management of assets on the blockchain.

sToken Bridges RWAs and Yield-Generating Opportunities

The newly launched sToken is built on Ethereum’s ERC-4626 standard, a framework for creating vaults that pool yield-bearing assets. This new token architecture allows institutional investors who hold RWAs issued by Securitize to convert these assets into deUSD, Elixir’s decentralized U.S. dollar token while continuing to earn yield on their investments.

The product presents a unique opportunity for institutional investors. Notably, investors can participate in the DeFi ecosystem while still earning returns from their tokenized investments. The scope of these investments will also include funds like BlackRock’s tokenized Treasuries, BUIDL.

This initiative, the deUSD RWA Institutional Program, facilitates a smooth interaction between RWAs and DeFi. The program serves as a bridge for users to access liquidity in a compliant and efficient manner. Token holders can leverage their sTokens within the DeFi space to unlock new opportunities for capital growth. At the same time, holders can continue to earn returns from their tokenized assets.

Notably, the sToken program will initially be available only to BlackRock’s  BUIDL token-accredited holders. This fund, backed by short-term US Treasuries, is the largest on-chain money market fund, with over $520 million in assets. Future support for other assets, such as Hamilton Lane’s SCOPE fund, is also planned to expand the use of tokenized RWAs.

Securitize and Elixir Revolutionize Tokenized Assets in DeFi

Tokenization is considered a way to open up new possibilities for asset deployment. By turning real-world assets into digital tokens, the financial world gains access to new tokenization opportunities for efficiency, transaction speed, and market inclusivity.

Major firms like BlackRock, KKR, UBS, and HSBC increasingly use tokenization to change how assets are issued, transferred, and used.

However, adoption remains limited due to regulatory challenges and faulty integration with DeFi. The Securitize and Elixir initiative has created a solution to address these issues. The program will make tokenized assets more accessible and useful for a broader range of investors.

Elixir’s CEO, Philip Forte, emphasized that this partnership fully integrates tokenized real-world assets into DeFi. For the first time, holders can use their assets on-chain and unlock liquidity via deUSD.

Elixir will hold a derivative of BUIDL, called sBUIDL, minted by Securitize users. This will help drive growth in Total Value Locked (TVL) and increase liquidity across multiple chains.

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