Converge, an Ethereum Virtual Machine (EVM) compatible Layer-1 (L1) blockchain, has been formally introduced by Ethena Labs and Securitize. Converge is intended to serve as a settlement layer for digital currency and tokenized assets by fusing traditional finance (TradFi) with decentralized finance (DeFi).
In the upcoming weeks, the developer testnet for the blockchain is anticipated to go live. Additionally, the mainnet implementation is scheduled for the second quarter of 2025.
What is Converge and what to expect from it
Converge will function as a network that is compatible with EVM, guaranteeing builders a smooth development experience. Leading infrastructure suppliers such as LayerZero, Pyth Network, Wormhole, and RedStone will be integrated.
Ethena's native governance token, ENA, will be used by the network for staking. Furthermore, USDe and USDtb will serve as the native gas tokens for the network.
“Our vision is to provide the first purpose built settlement layer where TradFi merges with DeFi, centered on USDe & USDtb and secured by ENA,” the announcement said.
Leading RWA tokenization company Securitize plans to introduce its tokenized assets on Converge in the future. The business has already released assets on-chain valued at about $2 billion. This project is a big step toward tokenizing more financial instruments than just treasury-backed funds and assets. It encompasses a wide variety of securities from several asset groups.
Furthermore, Ethena will automatically issue USDe, USDtb, and iUSDe on Converge and export these assets in formats that are compatible with TradFi for institutional adoption. By luring institutional investors to DeFi, this campaign is poised to open up a massive potential.
“We believe the biggest theme of this cycle and the years to come is the onboarding of institutional flows of capital. Even after significant growth, DeFi TVL today at $100 billion is negligible compared to global capital markets,” the post noted.
Converge seeks to bridge the current divide between TradFi and DeFi by fusing Securitize's leadership in tokenized securities with Ethena's DeFi influence.
Converge will be founded on three key ideas. Permissionless DeFi access will be made available first. This would eliminate the requirement for KYC and enable users to engage in a decentralized financial environment driven by USDe.
Secondly, it will offer TradFi applications with permission. Traditional financial institutions will be able to safely communicate with KYC-compliant parties using USDtb and iUSDe as a result. In conclusion, the platform will facilitate credit leverage, fixed-income products, and equity trading by supporting permissioned financial products, such as different tokenized assets produced by Securitize.
A broad spectrum of customers and institutions will be able to embrace blockchain-based financial solutions thanks to these pillars.
The Rise of Tokenized Assets and RWA Adoption
The RWA market is expanding quickly at the time of Converge's introduction. According to recent data, the entire value of RWAs has doubled in the last year, with the on-chain value rising 17.81% over the last 30 days to $18.8 billion.
As a result of the sector's growth, there are currently 117 asset issuers and about 90,550 asset holders.
The entire value of stablecoins has increased by 1.41% over the past month to $224.5 billion, further solidifying this trend. Interestingly, Ethena's USDe has become the industry's fourth-largest stablecoin.
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