After greater than a decade constructing infrastructure for exchanges, monetary establishments and central banks, R3 noticed the market beginning to bend in a brand new path. A few yr in the past, the agency initiated a strategic reset, asking a easy however elementary query: what’s the easiest way for patrons to maneuver property totally onchain?
Todd MacDonald, R3’s co-founder, stated that course of coincided with a deep overview of the blockchain panorama.
“We spoke to basically all of the layer ones and layer twos,” he defined in an interview with CoinDesk, as R3 evaluated the place institutional capital markets have been most probably emigrate. That work culminated in a strategic partnership with the Solana Basis, introduced final Could on the blockchain’s Speed up convention, he stated.
A layer 1 community is the bottom layer, or the underlying infrastructure of a blockchain. Layer 2 refers to a set of offchain programs or separate blockchains constructed on prime of layer 1s.
The choice, MacDonald stated, was grounded in a long-term conviction that every one markets will in the end turn into onchain markets.
“We expect Solana is the most effective community for that future,” he stated, pointing to its construction, throughput and trading-first design. R3 got here to see Solana as “the Nasdaq of blockchains,” a venue purpose-built for high-performance capital markets relatively than common experimentation.
By way of its Corda blockchain platform, R3 helps greater than $10 billion in property and works with individuals together with HSBC, Financial institution of America, the Financial institution of Italy, the Financial Authority of Singapore, the Swiss Nationwide Financial institution, Euroclear, SDX and SBI, he stated.
Tokenization, the method of representing real-world property comparable to shares and bonds as digital tokens tradable on blockchain networks, has emerged as one of many key use instances drawing rising curiosity and funding from conventional monetary establishments.
Exercise in decentralized finance (DeFi) stays focused on a handful of chains, with Ethereum nonetheless the biggest by whole worth locked (TVL), reflecting its deep liquidity, broad developer ecosystem and institutional adoption. Nonetheless, Solana has emerged as one of many fastest-growing DeFi platforms, benefitting from excessive throughput, ultra-low charges and quickly increasing person engagement.
Latest knowledge reveals Solana’s DeFi ecosystem holding greater than $9 billion in TVL, making it one of many prime networks exterior Ethereum and its Layer 2s, and in some intervals rivaling the mixed DeFi exercise of main Ethereum L2s.
Solana’s mannequin has pushed considerably increased onchain transaction quantity and lively wallets, particularly for buying and selling and high-frequency purposes, at the same time as Ethereum retains total TVL dominance and the biggest share of institutional property.
Since that pivot final Could, R3 has spent the previous eight to 9 months virtually completely targeted on one drawback: the right way to tokenize the subsequent trillion {dollars} of property and convey them onchain in a approach that truly works for buyers. Meaning not simply issuing tokens, however designing merchandise that present onchain allocators need to use, and that conventional buyers can develop into over time.
MacDonald stated R3 is already seeing a shift in concentrate on Solana towards capital formation and capital allocation, relatively than pure hypothesis.
Liquidity, MacDonald argued, is the actual bottleneck for tokenized real-world property.
“The beating coronary heart of DeFi is borrow and lend,” he stated. The breakthrough second will come when a tokenized real-world asset could be handled as credible collateral on equal footing with native crypto property. As we speak, restricted liquidity, and in some instances inflexible permissioning, discourages DeFi buyers from participating meaningfully with these merchandise.
Somewhat than forcing demand, R3 is ranging from the place onchain urge for food already exists. MacDonald pointed to boom-and-bust cycles and notes that many refined buyers at the moment are on the lookout for yield that’s extra secure and fewer correlated to crypto markets.
“We’re attempting to convey these property onchain and package deal them in a DeFi-native approach,” he stated, whereas working carefully with present allocators to enhance entry.
The agency’s asset focus displays that technique. R3 is prioritizing higher-yielding merchandise, with non-public credit score as a core pillar.
“You want a headline yield to get consideration,” MacDonald stated, noting that returns round 10% are likely to resonate strongly with onchain buyers. On the similar time, these merchandise should steadiness return, liquidity and composability; a problem given that personal credit score liquidity is commonly quarterly or “by appointment” in conventional markets.
Past non-public credit score, R3 sees important alternative in commerce finance, the place MacDonald stated demand and provide are extremely elastic.
“If DeFi allocators actually leaned into commerce finance, the provision from the standard world is big,” he explains, pointing to the sheer scale of the market and the potential for sustainable returns.
Commerce finance is notoriously opaque, spanning fragmented jurisdictions, bespoke contracts and uneven knowledge requirements, which makes threat troublesome to cost, property arduous to standardize and liquidity sluggish to scale regardless of the market’s monumental dimension.
On the issuer aspect, R3 is already working with household-name funding managers, alongside an extended tail of asset house owners, from factories to transport corporations, who see tokenization as a brand new distribution channel and a brand new mannequin for capital formation. The goal is not only to reflect off chain merchandise, however to revamp them so they’re investable, tradable and composable onchain.
Enhancing liquidity may even require extra threat capital deployed instantly onchain. MacDonald stated that whereas there are massive native DeFi gamers in the present day, participation stays slender.
“We want extra range of steadiness sheets prepared to place capital to work,” he stated, alongside extra versatile redemption mechanisms that give buyers real alternative.
That imaginative and prescient underpins R3’s newly introduced Corda Protocol. Constructed natively on Solana, the protocol introduces professionally curated, real-world-asset-backed yield vaults that challenge liquid, redeemable vault tokens. Launching within the first half of 2026, the vaults are designed to offer stablecoin holders entry to tokenized debt devices, funds and reinsurance-linked securities, with out sacrificing DeFi-style liquidity or composability.
“Belongings accessible by Corda can be supported by protocol-native liquidity layer, enabling instantaneous swaps out of in any other case illiquid or liquidity-constrained property for onchain buyers. This unlocks the usage of the property as collateral at scale. The protocol can be built-in with prime curators and lending protocols to energy borrowing and levered place constructing,” MacDonald stated.
In an indication of sturdy early demand, Corda has obtained greater than 30,000 pre-registrations so far.
He framed the trouble as a direct response to a rising hole available in the market. As DeFi buyers transfer away from purely speculative methods, demand is rising for secure, diversified yield that’s uncorrelated with crypto markets. Whereas lots of of billions of {dollars} in real-world property at the moment are represented onchain, most institutional-grade yield nonetheless forces capital to maneuver off chain.
“Our purpose is to shut that hole,” MacDonald stated. “To convey Wall Avenue-quality property onchain in a approach that lastly is sensible for DeFi, and to convey off chain capital into onchain markets at scale.”
Learn extra: ‘DeFi is useless’: Maple Finance’s CEO says onchain markets will swallow Wall Avenue
