AllianceBlock and ABO Digital to offer tokenized funding options for crypto projects
“Through this strategic partnership, AllianceBlock is set to revolutionize the industry by leveraging the infrastructure to tokenize traditional financial instruments and emerging instruments for the digital asset space, taking a giant leap forward in providing institutions with a more compliant and risk-averse way to benefit from DeFi’s benefits.”
AllianceBlock has partnered with ABO Digital to offer tokenized structured products for institutions and crypto projects and institutions seeking alternative forms of financing.
The provider of gateways between TradFi and DeFi will leverage its decentralized and trustless blockchain infrastructure and the Nexera protocol to tokenize traditional financial instruments and the ability to wrap them in traditional Actively Managed Certificates (AMC) for capital providers who do not want to hold digital assets.
ABO Digital, the private digital asset investment arm of Alpha Blue Ocean, was created to offer a range of structured financial products to the digital asset market, including convertible bonds, debt issuance and warrants/options, provided the capital startups need to grow their customer and revenue base. The firm will also explore offering alternative financial investments to institutions through tokenization.
The partnership will see the firm’s structured products offered as an alternative to traditional funding options, such as issuing tokens to market makers or venture capitalists via a simple agreement for future tokens (SAFT). The goal is to help crypto projects access additional liquidity from institutional capital providers with full compliance.
“A more compliant and risk-averse way to take advantage of DeFi’s benefits”
Rachid Ajaja, CEO of AllianceBlock, said: “Through this strategic partnership, AllianceBlock is set to revolutionize the industry by leveraging the infrastructure to tokenize traditional financial instruments and new instruments for the digital asset space, taking a giant leap forward in providing institutions a more compliant and risk-averse way to take advantage of DeFi’s benefits. This partnership marks a significant milestone for both companies and the industry as a whole, and demonstrates our commitment to innovation, compliance and risk management. The future of finance looks brighter than ever.”
Amine Nedjai, CEO of ABO Digital, commented: “Together, ABO Digital and AllianceBlock represent the perfect combination of innovation, expertise and professionalism in the cryptocurrency market. With our combined efforts, we aim to bring a new perspective to the world of decentralized and traditional finance and attract more institutional capital providers. We look forward to working with AllianceBlock and paving the way for a new era in finance, one that is both creative and professional.”
AllianceBlock will tokenize ABO Digital’s structured products
ABO Digital will help negotiate and structure financial instruments based on the project’s capital and liquidity needs. AllianceBlock, together with Nexera Protocol’s infrastructure and NexeraID’s identity management toolkit, will tokenize and transform these into fully compliant AMCs.
Participants’ capital will be locked in smart contracts, with these funds disbursed to projects only when the minimum funding threshold is raised. In return, capital providers will receive a traditional AMC, where AllianceBlock manages the assets by holding the convertible bonds, debt or warrants. ABO Digital will receive a structuring fee based on the amount raised, with AllianceBlock taking the majority of the fees for managing the AMC or directly through the tokenized asset.
Institutional and retail participants will benefit from the opportunity to provide capital to promising crypto projects using more risk-averse and compatible funding mechanisms, giving them a different form of ownership than directly owning the project’s tokens. In addition, they will have access to token fundraising rounds reserved exclusively for major capital providers and the AllianceBlock community through the Fundrs platform.
ABO Digital and AllianceBlock will bridge the gap between the crypto community and traditional financial markets by offering large crypto funds, private equity firms and other market participants the opportunity to raise capital in tokenized forms of traditional financial instruments, including stocks, options, bonds, tokenized funds and tokenized AMCs. Tokenization will help these new instruments reach new classes of investors across both worlds, thereby increasing market liquidity.
Institutional capital providers are closely watching the tokenization of real-world assets and the potential impact they could have on the investment landscape. The trading of many assets in the real world is still primitive, with ownership still stated on paper, thus increasing transaction times and costs. The subdivision of assets in the real world is also limited due to this model. With the tokenization of real-world assets, fractional ownership becomes a viable option and commerce becomes streamlined, democratizing access to new markets while making them safer and fairer. It is for these reasons that tokenization is going to play a transformative role in asset management in the coming years.