JPMorgan tests tokenized portfolios on Avalanche

JPMorgan’s subsidiary (Onyx Digital Assets), WisdomTree and Apollo, as well as a number of industry players, including Ava Labs, tested portfolio management for investment portfolios using appchains Provenance and Avalanche, The Block reports.

Among the pilot participants were other distributed ledger technology providers — Oasis Pro, Provenance, Biconomy, as well as providers of interoperability solutions LayerZero Labs and Axelar.

The initiative is being implemented as part of Project Guardian under the auspices of the Monetary Authority of Singapore.

The aim is to enable fund managers to tokenize, acquire and rebalance positions in RWA across multiple blockchains, standardising the settlement processes for transactions.

Participants of Project Guardian are exploring the exchange of tokenised assets with using DeFi protocols in open and interoperable permissioned networks.

According to a statement, the JPMorgan-led project is aimed at demonstrating how blockchain technology can work with large-scale client portfolios in fiduciary management — executing trades, enabling automated management of tokenised financial assets, including such alternatives as direct investments, private credit, real estate and infrastructure.

Onyx Digital Assets used the Axelar network to enable interaction with the permissioned Provenance Blockchain Zone — a Provenance appchain compatible with the mainnet.

Public networks provide fast finality and transparency. These attributes could prove decisive in hybrid systems that integrate RWA, as well as private blockchains and off-chain systems — Sergey Gorbunov, CEO of Axelar.

Anthony Moro, head of Provenance Blockchain, called the current project the first-of-its-kind solution for cross-blockchain interoperability in relation to institutional financial services.

LayerZero also connected to Onyx via the Evergreen subnets of the Avalanche network to enable subscription and redemption of WisdomTree funds.

Evergreen subnets — EVM–blockchains with a controlled set of validators and a user token to secure transactions.

Oasis Pro enabled tokenization of assets such as Apollo funds on the Onyx Digital Assets platform.

Concepts such as Biconomy’s Paymaster service have eliminated frictions in interacting with blockchains, including the need to pay transaction fees on-chain.

Earlier in October, JPMorgan launched Tokenized Collateral Network.

The blockchain solution has already been used by BlackRock and Barclays in converting shares into digital tokens and subsequent OTC-trading of derivatives between the two institutions.

Earlier, several hedge funds became participants of the testnet of the Evergreen subnet of the Avalanche blockchain to assess the benefits of on-chain trades and settlements for currency and interest-rate swaps.