On July 25, Avalanche stated that it was on a mission to “pioneer the future of asset tokenization.”
Tokenization is poised to be one of the most impactful blockchain innovations of the next decade, it stated.
Around $50 million will be allocated to mint tokenized real-world assets on the scalable layer-1 blockchain network.
Avalanche Vista intends to accelerate the growth of tokenization and its role in on-chain finance (OnFi), it stated. Several assets will be considered for tokenization, including equity, credit, real estate, commodities, and blockchain-native assets.
John Wu, President of Ava Labs, commented that asset tokenization isn’t just the future of capital markets, “it’s a critical driver of the present,” adding:
“The groundswell of momentum across institutions building on-chain has been astounding, and the Avalanche Foundation is taking a big leap forward with this initiative.”
According to a report by Security Token Advisors, the tokenized securities market is expected to grow to $20 trillion by the end of 2030.
Furthermore, the value of tokenized U.S. Treasuries has reached an all-time high of $641 million, according to RWA.xyz. Treasury tokenization has grown by more than 460% since the beginning of the year.
In June, private wealth management firm Bernstein estimated that roughly 2% of the global money supply, or around $3 trillion, could be tokenized over the next five years.
Ethereum advocate Ryan Berckmans stated that RWA tokenization will also be huge for the Ethereum ecosystem since it is the industry standard:
“As tokenized real world assets grow to global ubiquity, we may expect Ethereum and our L2s to capture the vast majority of this growth. Not just because we’re a great place to tokenize, but also because we’re the best marketplace in the world.”
In May, Alibaba Cloud announced a launchpad to deploy its metaverse on the Avalanche network.
Avalanche token prices are trading flat on the day at $13.18, having shown no reaction to the latest announcement.
Furthermore, the asset has lost 6% over the past week, in line with the broader crypto market retreat.
AVAX has been down-trending for the past year and remains 91% down from its November 2021 peak price of $145.