Backed, Chainlink, and Sonic in Revolutionary Collaboration to Tokenize Fortlake’s Sigma Fund

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As a seasoned analyst with extensive experience in both traditional finance and blockchain technology, I find this partnership between Backed, Chainlink, Sonic, and Fortlake to be nothing short of groundbreaking. The convergence of these powerhouses represents a monumental leap towards democratizing access to traditionally exclusive financial assets through the decentralized and transparent world of blockchain.

In an exciting development, Chainlink, Sonic, and Fortlake Asset Management have joined forces to convert Fortlake’s Sigma Opportunities Fund into digital tokens, signifying a major advancement in moving conventional financial assets onto the blockchain platform.

The fund is being supported by the process of tokenization, where permissionless tokens are generated. Asset tokenization innovator offers a solution that guarantees 1:1 correspondence with each fund unit, with the token price linked directly to the real-time Net Asset Value (NAV). This allows for swift deployment of these tokens within Sonic’s system. Originally called Fantom, this high-speed EVM L1 blockchain offers attractive benefits and robust infrastructure to developers.

Chainlink is widely recognized as the benchmark in blockchain finance. It enables the transfer of the net asset value (NAV) data for underlying fund shares to the blockchain, making cross-chain transactions smooth and liquidity a breeze. Additionally, Chainlink Proof of Reserves ensures accurate verification of Assets Under Management (AUM) and collateralization.

Sonic stands out due to its emphasis on developer convenience, advanced consensus system, and lightning-fast transaction speed – capable of processing 10,000 transactions per second in just one second for finality. This has made it a preferred option for DeFi protocols and other decentralized applications because of these qualities. It also excels as a platform for tokenizing real-world assets, thanks to its proficiency in handling large volumes of transactions with minimal delay.

At the 2024 Australian Fund Manager of the Year awards, Fortlake emerged victorious in the Fixed Income category. The Sigma Opportunities Fund, a strategy for actively managed international fixed-income investments, aims to deliver returns that are at least 7% higher than the federal funds rate, potentially reaching up to 10%. This impressive performance is attributed to exploiting market discrepancies. So far in 2024, the fund’s active fixed-income investment has yielded a return of 10%.

Adam Levi from Backed noted that tokenizing Fortlake’s Sigma Fund represents a significant achievement in the realm of blockchain technology. This action underscores how institutions can utilize blockchain technology to optimize back-office functions and secure greater access to capital. The collaboration indicates a dedication by both platforms to revolutionizing financial asset trading and management.

Fortlake’s Sigma Fund is being tokenized using Backed’s Tokenization-as-a-Service (TaaS) system, marking Backed’s entrance into private tokenization. This move signals that the platform will provide similar services to other financial institutions. Additionally, Backed aims to expand its offerings further, enhancing the blockchain ecosystem by making more tokenized assets available and increasing flexibility.

Colin Cunningham, who leads Tokenization & Alliances at Chainlink Labs, looks forward to collaborating with Fortlake and Backed to tokenize real-world assets using Sonic. He envisions that Chainlink’s role as a leader in on-chain finance can help boost the adoption, liquidity, and usefulness of Fortlake’s tokenized investment fund.

According to Sonic’s Business Development Head, Sam Harcourt, this partnership is among the initial moves by Sonic as it embarks on a global mission to convert traditional financial assets into digital tokens, thereby making its technological benefits accessible to the traditional finance sector (TradFi).

Christian Baylis, Founder and Chief Investment Officer at Fortlake, emphasized that the partnership with Sonic, Backed, and Chainlink for tokenizing Sigma is a major milestone. Essentially, this collaboration enables Fortlake to offer easier access to its expanding pool of digital asset investors for its fund. Baylis views this partnership as signifying the start of a new era in traditional asset management fundraising.

Transforming Sigma Fund into a tokenized format will unlock various DeFi prospects, including margin trading collateral, high-interest stablecoin savings accounts, and integrations with lending platforms. Notably, global asset manager BlackRock has entered the tokenization competition, with other platforms following suit, eager to tap into this emerging sector. Pioneering experiments in tokenization by JP Morgan, the Hong Kong Monetary Authority, and other institutions have demonstrated substantial savings through blockchain technology. According to Bank of America’s predictions, the asset tokenization market could swell to over $16 trillion within just five years.

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2024-12-04 17:03