Hamilton Lane, one of the world’s largest asset managers, has announced the launch of a private credit fund on the Solana (SOL) blockchain, in a move that highlights the growing convergence of traditional finance (TradFi) and blockchain technology.
According to a recent report by Fortune magazine, the fund, named the Senior Credit Opportunities Fund (SCOPE), will now be accessible to investors through the Solana network.
Funding Institutions Directly on the Solana Blockchain
Hamilton Lane, which has more than $290 billion in assets under management, has partnered with Libre, a Web3 protocol developed by Brevan Howard’s WebN Group and Nomura’s cryptocurrency firm Laser Digital, to advance the initiative.
According to Fortune, Libre will act as a “backbone infrastructure” to enable on-chain issuance and distribution of tokenized real-world assets (RWAs), which Hamilton Lane hopes will help expand its distribution channels and reach a wider range of investors, including “mass affluent” and crypto-native traders.
Libre CEO and founder Dr. Avtar Sehra emphasized that Solana’s “low latency and high throughput capabilities” make it an ideal network for tokenization.
Interestingly, the move marks a significant milestone for the Solana ecosystem as it marks the first institutional fund to launch directly on the blockchain, as RWAs have risen as an investment vehicle for institutional investors leveraging crypto technology over the past year.
Financial Inclusion through Tokenization?
Hamilton Lane’s foray into blockchain technology is not entirely new, as the firm previously tokenized its SCOPE and equity funds using digital securities issuance platform Securitize.
Victor Jung, head of digital assets at Hamilton Lane, expressed satisfaction with the inflows generated by these efforts, but he hailed the launch of Solana as a significant step forward for the firm, enabling the tokenization of secured lending.
This is for decentralized finance natives, and we believe this is just the beginning of some of the financial asset classes being offered to new audiences with different risk-return profiles.
Similarly, proponents of these efforts argue that tokenization of financial assets will modernize and democratize traditional financial markets.
For example, BlackRock CEO Larry Fink has expressed the belief that the next step for the industry is to tokenize all stocks and bonds, envisioning a future where all financial assets exist on a unified ledger.
Tokenized private credit is gaining momentum, but some challenges remain, Fortune reports: Startups such as Maple and Centrifuge have had difficulty selling to crypto investors due to factors including the length of lockup periods and the changing risk tolerance of this particular customer demographic.
Additionally, some crypto investors may prefer the higher returns that meme coins offer, which could eclipse more modest returns from traditional assets in the long term.
The daily chart shows that the price of SOL is in a downward trend. Source: SOLUSDT on TradingView.com
At the time of writing, SOL is trading at $173, down roughly 5% in 24 hours following Tuesday’s market-wide decline.
Featured image from DALL-E, chart from TradingView.com
