Securitize and Ethena have unveiled Converge, a new EVM blockchain designed to integrate DeFi with tokenized assets, aiming to bridge the gap between institutional investors and decentralized finance.
As per reports, Converge is expected to facilitate the issuance of both existing and future tokenized assets while fostering the development of institutional-grade applications in collaboration with key partners.
The project has already secured notable partnerships, including Maple, Morpho, Pendle, and Aave Labs’ Horizon. Custodial support is set to be provided by Copper, Fireblocks, and Komainu.
Securitize CEO Carlos Domingo confirmed that Converge is slated for launch within the next three months, with biweekly updates leading up to its release. While the testnet is not yet live, prototypes have been developed, indicating steady progress.
The origins of Converge trace back to when Ethena was in the process of raising $100 million for its own blockchain.
“They basically approached us to see whether we want to be part of it because they felt very strongly that the power of this will be not just that institutional DeFi … but that we can bring our RWA’s,” Domingo explained.
Ethena’s Guy Young also emphasized the blockchain’s role in filling a “clear gap in the market” as a settlement layer for tokenized assets.
Despite the optimism surrounding Converge, the announcement has drawn some skepticism, a common occurrence in the crypto industry. Addressing criticism, particularly from figures like David Hoffman, Domingo clarified that Converge is not a private blockchain and is not intended to function merely as a database.
He reiterated that in a multichain world, interoperability is key, with projects like Wormhole playing a role in facilitating cross-chain connectivity.
“I don’t think we can rely on one chain… Ethereum is great, and we support Ethereum and our largest assets are on [there]. But, at the same time, it has a lot of problems in terms of flexibility,” he stated.
Domingo pointed out that Ethereum’s slower upgrade process, high transaction costs, and longer finality times create room for alternative solutions like Converge. However, he reassured that Securitize will continue supporting multiple blockchains, catering to institutions that seek diversified exposure across various networks.
The broader vision behind Converge stems from concerns over DeFi’s stagnation since its peak in 2021. Domingo believes the lack of institutional adoption has hindered further growth, potentially limiting the next market cycle’s full potential.
“There’s clearly a problem with DeFi growth unless there’s institutional adoption,” he noted.
With Converge positioned as a possible solution to this bottleneck, the coming months will determine whether it can successfully break down barriers and attract meaningful institutional participation in the DeFi space.
Editorial Note: This news article has been written with assistance from AI. Edited & fact-checked by the Editorial Team.
