Today the Solv Protocol announced a $6 million funding round including Nomura’s digital asset subsidiary Laser Digital, UOB Venture management and several others, bringing the total funds raised to $14 million. The Singapore DeFi startup developed the Solv Protocol to enable onchain fund management on public blockchains.
Laser Digital also announced it received a license approval from Dubai’s Virtual Asset Regulatory Authority (VARA).
The Solv asset management protocol
“Solv has built a trustless institutional DeFi platform integrating brokers, underwriters, market makers, and custodians to create the first fund infrastructure on the blockchain to bridge DeFi, CeFi, and TradFi liquidity,” said Nomura Securities’ Olivier Dang who is COO of the wholesale digital office.
It has a pretty neat business model – any fund that uses its solution automatically pays a cut of the assets under management. The company launched in Q2 of this year and says it has facilitated more than $100 million in trading volume.
The founders, mainly Chinese technologists, didn’t believe that existing Ethereum token standards were appropriate for fund management, so they created a new one.
Solv is not keen on fungible tokens (ERC-20) because a new smart contract token has to be issued for each customization. And the challenge with non fungible tokens (NFTs ERC-721) is they are intended as single units and are not natively designed to be fractionalized. In contrast, there’s a need to issue shares in a fund. Presumably, the security token standard ERC-1400 isn’t appropriate either.
Hence Solv created the Semi-Fungible Token (SFT ERC-3525).
So far some of the larger asset managers have stuck with fungible tokens. They include Franklin Templeton with its $300 million onchain fund and Ondo Finance.
Others in the traditional asset management sector are starting to engage with blockchain. For example, UK asset manager Abrdn launched a fund on the Hedera DLT network. And Schroders is exploring tokenization on public blockchain as part of Singapore’s Project Guardian.
Meanwhile, for Nomura’s Laser Digital, this is at least the sixth blockchain and digital asset related investment this year.
