BTFs Hit a Technological Milestone
Funds that trade on blockchains have taken a step closer to reality as hybrid blockchain-platform provider Kadena prepares to launch its public blockchain with smart contract support on January 15.
The three-year-old startup has partnered with US Commodity Fund Investments to provide the technological infrastructure to support the trading and settlement of tokenized funds.
“The goal is to provide a marketplace in which people can trade and do instant settlement 24/7,” Monica Quaintance, head of research and networks, at Kadena, told IntelAlley. “Their pilot is on a traditional asset class. It’s not Treasuries, but it is like Treasuries.”
A fund structured in such a manner would eliminate the processes that a transfer agent would provide, she added. “You can do all of that on the public blockchain itself.”
UCSF files its application to create a new instrument with the US Securities and Exchange Commission and is waiting for the regulator’s decision.
The fund manager plans to use Kadena’s public-private blockchain to store investors’ personal information and KYC data on the private portion on the vendor’s Kadena Kuro blockchain while storing executions and transfers on its Kadena public platform.
Kadena miners, which are represented by 2,000 unique keys, already have mined 2 million blocks since genesis mining began in October 2019. The vendor expects it will take miners approximately 120 years before they mined last of the 1 billion tokens embedded in Kadena’s architecture.
The vendor claims that the platform has attained a throughput of approximately 750 transactions per second compared to bitcoin’s and ethereum’s 7 and 15 transactions per second, respectively.
The platform achieves its performance by running ten blockchains in parallel with each chain referencing a subset of its sibling chains to ensure that no chain lags or leads by too many transactions that it processes.
Kadena plans to add more blockchains but did not want to launch its platform with an overly large number of core blockchains, according to Quaintance. “We didn’t think it would be fair to have users bootstrap 1,000 chains in the last two weeks.”
The not-for-profit initiative will make it easier to ensure funds are comparable and clear about costs.
The new venue hopes to attract 15 to 20 listings over the next year.
An increasing number of firms are using distributed ledger technology.
Societe Generale paid for covered bonds in digital euros issued by Banque de France via blockchain.
The equity derivatives clearing organization has selected Axoni to develop and implement DLT.