Author: 0xLayman, ChainCatcher
Editor: TB, ChainCatcher
The current total locked value (TVL) in the DeFi market is approximately $100 billion, while the fixed income market has reached a size of $190 trillion. This shows that although the DeFi market is already quite large, it is just a drop in the ocean compared to traditional financial markets, which are full of potential. Therefore, institutional investors often have great interest in entering this market, but the lack of compliant infrastructure to help them invest safely and conveniently is a significant barrier.
According to official information, Converge was created to address the above pain points.
A Settlement Layer for the Integration of TradFi and DeFi?
At Tokenize NYC on March 18, Ethena Labs and Securitize publicly announced their plan to launch Converge in the second quarter of 2025—a blockchain designed to integrate traditional finance (TradFi) and decentralized finance (DeFi) that is compatible with Ethereum. Even though Converge currently only has a website seeking development cooperation, no white paper, and only two tweets on its official Twitter, the collaboration between Ethena and Securitize has still attracted widespread attention in the market.
As a product of collaboration between a crypto-native protocol and traditional financial license holders, Converge is expected to leverage the core resources and technological advantages of Ethena and Securitize. Its core concept is to combine stablecoins with compliant real-world assets (RWAs) to provide a suitable way for institutional funds to enter the crypto market.
Thus, the DeFi protocol Ethena, with a market cap of nearly $6 billion, plans to migrate its existing ecosystem business to Converge, making it the core DeFi infrastructure for Ethena. Meanwhile, Securitize has created nearly $2 billion in RWA assets across multiple blockchains (such as BlackRock's BUIDL, Apollo, KKR, etc.) and will also issue existing and future tokenized assets on Converge, while promoting interoperability among multiple protocols.
Unlike the existing DeFi ecosystem, Converge adopts a model where stablecoins USDe and USDtb are used to pay gas fees, ensuring the stability of transaction costs and attempting to alleviate some institutional investors' concerns about adopting systems with volatile fee structures. Additionally, Ethena's native governance token ENA will serve as a stakeable asset (sENA) for Converge, ensuring network security through a permissioned validator set composed of traditional financial institutions and centralized exchanges.
DeFi Ecosystem
Converge has built a three-layer structure around Ethena's native USDe, USDtb supported by BlackRock's BUIDL fund, and iUSDe designed specifically for asset management institutions to meet different user needs:
- Open DeFi Ecosystem Layer: Permissionless, allowing all users to trade and interact with assets freely.
- Permissioned Application Layer: Designed for institutional users that meet KYC/KYB requirements, ensuring compliance and security.
- Tokenized Securities Financial Products Layer: Deploying Securitize's comprehensive tokenized securities issuance and management system, covering various asset classes such as stocks, bonds, and real estate, while actively exploring new application scenarios like on-chain stock trading.
In terms of performance, Converge will be compatible with the Ethereum Virtual Machine (EVM), allowing it to run Ethereum-based smart contracts, dApps, and tools without modification, and its performance will be consistent with industry-leading blockchains.
Partners
Currently, Converge has attracted support from multiple DeFi projects and plans to launch a dedicated market for tokenized assets and iUSDe in collaboration with Aave Labs' Horizon, work with Morpho Labs to launch a money market supporting Ethena and Securitize assets, collaborate with Maple Finance to build on-chain yield and credit products, partner with EtherealDEX to provide high-performance derivatives and spot trading, and work with Pendle to focus on interest rate speculation for institutional assets.
Additionally, institutional custodians such as Anchorage, Copper, Fireblocks, Komainu, and Zodia will provide support for asset custody and compliance. On the technical side, Converge will achieve cross-chain integration through LayerZero and Wormhole protocols, and leverage RedStone and Pyth oracles for real-time data support.
Opportunities and Challenges
The compliance solutions offered by Converge are expected to attract more traditional institutional investors into the DeFi market, thereby enhancing market liquidity, solidifying the market foundation, and driving the appreciation of related crypto assets.
However, the differences in compliance requirements around the world mean that the platform will need to continuously adjust and adapt its rules for the issuance and trading of RWAs. Furthermore, in the early stages of the ecosystem, demonstrating the advantages of on-chain finance over traditional finance in terms of capital efficiency and investment costs, and attracting more institutions and investors to participate actively, will be key to the project's success.
(This article does not constitute investment advice and is for reference only.)
免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。
