In order to provide tokenized structured products for institutions and crypto projects looking for alternative forms of financing, AllianceBlock, the company creating seamless gateways between TradFi and DeFi through its decentralized and trustless infrastructure, announced today that it is collaborating with ABO Digital, the private digital asset investment arm of Alpha Blue Ocean.
AllianceBlock will use its groundbreaking partnership with ABO Digital to leverage its decentralized and trustless blockchain infrastructure as well as the Nexera Protocol to tokenize conventional financial instruments and give capital providers who don’t want to hold digital assets the option to wrap them into conventional Actively Managed Certificates (AMCs). AllianceBlock’s objective to create frictionless gateways between Traditional Finance (TradFi) and Decentralized Finance (DeFi) has reached another significant turning point with the cooperation.
In order to provide the cash startups need to expand their client and revenue bases, ABO Digital was established to provide a range of structured financial instruments to the market for digital assets, including convertible bonds, debt issuance, and warrants/options. ABO Digital will also look at using tokenization to provide institutions with alternative financial assets.
The structured products from AllianceBlock and ABO Digital will give cryptocurrency projects an alternative to conventional funding methods, such as issuing tokens to market makers or venture capitalists via a Simple Agreement for Future Tokens (SAFT), enabling them to access additional liquidity from institutional capital providers while remaining fully compliant.
As part of the agreement, ABO Digital will assist in negotiating and structuring financial instruments in accordance with the capital and liquidity needs of the project. They will be tokenized and converted into AMCs in accordance with all regulations thanks to AllianceBlock, the infrastructure of the Nexera Protocol, and the identity management tools of NexeraID. Smart contracts will be used to secure participant funds, and only once the required minimum funding level has been reached will those monies be released to projects. The standard AMC will be given to capital providers in exchange, with AllianceBlock managing the assets by keeping the convertible bonds, loans, or warrants. AllianceBlock will get the bulk of the fees for running the AMC or directly via the tokenized asset, with ABO Digital receiving a structuring fee dependent on the amount raised.
The opportunity to support innovative crypto projects using less risky and compliant financing channels will be advantageous for institutional and retail players as it will provide them with a different kind of ownership than directly holding the project’s tokens. Moreover, via the Fundrs platform, they will have access to token fund-raising rounds that are only open to major capital providers and the AllianceBlock community.
By giving major cryptocurrency funds, private equity companies, and other market participants the option to provide capital in tokenized forms of conventional financial instruments, such as shares, options, bonds, tokenized funds, and tokenized AMCs, ABO Digital and AllianceBlock will further close the gap between the crypto community and traditional financial markets. By making these innovative assets accessible to new investor groups in both worlds, tokenization will increase market liquidity.
Institutional capital providers are closely monitoring the tokenization of physical assets and any possible effects it may have on the world of investing. Many real-world assets are still traded in an archaic manner, with ownership being denoted on paper, lengthening transaction times, and raising expenses. This paradigm also restricts how real-world assets may be divided up. Real-world assets are tokenized, making fractional ownership a possibility and trade more efficient, democratizing access to new markets and ensuring their safety and fairness. For these reasons, tokenization is positioned to fundamentally alter asset management in the years to come.
“Through this strategic partnership, AllianceBlock is set to revolutionize the industry by leveraging its infrastructure to tokenise traditional financial instruments and new instruments for the digital asset space, taking a giant leap forward in providing institutions with 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, demonstrating our commitment to innovation, compliance, and risk management. The future of finance is looking brighter than ever.” –Rachid Ajaja, CEO of AllianceBlock
“Together, ABO Digital and AllianceBlock represent the perfect combination of innovation, expertise, and professionalism in the cryptocurrency market. With our combined effort, we aim to bring a fresh 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.” — Amine Nedjai, CEO of ABO Digital.
An innovative illustration of how the conventional banking sector and the digital asset sector might complement one another is the partnership between AllianceBlock and ABO Digital. Traditional institutions will be able to access a new class of previously inaccessible assets through tokenization as the industry develops and AllianceBlock broadens the idea of structured financial instruments in cryptocurrency.
