The digital securities platform DEFYCA, based in Luxembourg, is getting ready to add its own protocol to the Avalanche public blockchain. Market participants and DeFi protocols will be able to connect with actual and securitized yields from the opaque private debt market that has been reserved for institutional investors thanks to this. According to information provided by Broadridge, private debt funds currently control $1.6 trillion in AUM (assets under management).
DEFYCA has successfully managed to create a protocol through which it will become possible to transfer conventional debt securities as well as loan portfolios on-chain and in the form of tokenized assets. DEFYCA intends to solve the volatility problems inherent in on-chain finance by integrating decentralized and institutional finance in an efficient and effective manner. In turn, this will open up possibilities for expanding upon previous trade-related actions in relation to established markets.
The DEFYCA protocol enables the distribution of tokenized assets, their transformation into securities, and the organization of liquidity pools. After this is completed, it will be able to trade instantly without the challenges associated with trading these assets using the conventional method. While using smart contracts to carry out settlement and payment flows, liability matching, price discovery, and other duties, an automated approach is employed. Thus, investment expenses have been drastically cut, and the issuer’s time period has been compressed. Participants are also able to obtain tangible, assured returns on their stablecoin holdings.
In this case, the Avalanche public blockchain will play a crucial role in delivering the DEFYCA platform. It will function as the company’s treasury chain, allowing participants to connect with liquidity on a variety of blockchains with low-cost fees and rapid transaction times. The credit for this goes to Avalanche’s breakthrough consensus protocol.
Alex Garmash, the co-founder of DEFYCA, states that their mission is to create a new term for enhancing and expanding access to the private credit markets. According to him, the protocol will demonstrate that Web3 is capable of launching a connectable and seamless trading arena, with the assistance of which investors will be able to trade, and funds will be able to raise cash through the use of novel tokenized securities.
Where the Director of Business Development, Institutions at Ava Labs, Morgan Krupetsky, is concerned, for the complete turnaround of DeFi, it is necessary to be able to shift real-time assets, along with off-chain collateral, to on-chain. He firmly believes that Avalanche has the vision to rope in both sides of the market and bring them together. It is also capable of speeding up adoption.
DEFYCA is the first protocol to move the off-chain credit market onto the blockchain, allowing traditional and cryptocurrency investors to participate in safe real-world assets (RWAs). Conversely, Avalanche is a smart contract platform designed for continuous improvement and rapid transaction completion. It has a unique consensus system, as well as the Subnet architecture and HyperSDK toolkit, which enables enterprises to easily develop robust, innovative blockchain solutions.