Zoth and Singularity Finance are looking to cash in on institutional investors’ growing appetites for tokenized money-market funds with the launch of ZTLN Prime, a new asset class that aims to generate consistent, low-risk DeFI returns.
ZTLN Prime, which stands for Zoth Tokenized Liquid Notes Prime, is said to merge the stability of traditional financial investments with the advanced capabilities of blockchain and decentralized finance. Its creators say it’s designed to provide treasury managers with access to a more secure, liquid and transparent revenue-generating asset class.
According to Zoth, ZTLN Prime is backed by a combination of money-market funds and U.S. Treasury ETFs managed by trusted asset managers and held in the custody of Doo Group. To tokenize the fund, it partnered with Singularity Finance, which provides the compliant tokenization infrastructure required to satisfy industry regulators.
Singularity boasts a lot of expertise in bringing institutional-grade real-world assets on-chain, with its SFI tokenization framework being compatible with the Cayman Islands’ Monetary Authority (CIMA) and the Mutual Funds Act (2021 Revision), ensuring compliance that meets some of the highest global regulatory standards.
Zoth has high hopes for ZTLN Prime, saying it can optimize DeFi yields for institutional investors and deliver consistent returns, while addressing issues around safety and liquidity. In addition to being backed by a robust legal structure, ZTLN Prime has access to deep liquidity pools, enabling seamless token redemption without any lock-in requirements.
Singularity Finance’s co-founder Mario Casiraghi said ZTLN Prime is a key step towards closing the gap between DeFi and traditional finance.
“By combining Zoth’s expertise in tokenizing high-quality real-world assets we’re delivering an institutional-grade product that embodies safety, liquidity, and transparency for the global web3.0 ecosystem,” he insisted.
The asset is targeted primarily at asset managers and hedge funds looking for greater stability in DeFi investments, and to that end it’s designed to provide low-risk, optimized yields. Investors can be reassured by the strength of its asset backing – a combination of Blackrock-managed iShares ETFs and MMFs that largely deal with U.S. Treasury bills. Essentially, it’s a tokenized version of one of the most stable investments available in TradFi, designed to provide predictable returns with minimal risk. It represents a stark contrast to the high-risk but potentially very lucrative returns promised by ‘traditional’ DeFi investments.
Zoth Chief Executive Pritam Dutta stressed that ZTLN Prime’s high priority on investor safety, transparency and liquidity sets it apart from other tokenized DeFi products, giving investors greater confidence that their capital will generate consistent and reliable returns.
“ZTLN-P is an industry-driven product that aligns institutional-grade short term investments such as Blackrock iShares Treasury Bond ETF with the efficiency and transparency of blockchain,” Dutta said.
Institutional interest in tokenized assets has soared ever since the launch of BlackRock’s USD Institutional Digital Liquidity Fund, known as BUIDL, on Ethereum back in March. The BUIDL fund has grown to represent around two-thirds of the more than $2.3 billion in value locked in tokenized MMFs, yet its dominance shows that there’s room for plenty of alternatives.
Zoth faces some competition though. Along with BlackRock’s BUIDL, other traditional asset classes include the $420 million Franklin OnChain U.S. Government Money Fund, available on Avalanche, and Fortlake Asset Management’s Sigma Opportunities Fund, which recently launched on the Sonic blockchain.
