ParaFi Capital, an alternative asset management firm, has tokenized part of its venture fund on the Avalanche blockchain in partnership with Securitize, allowing a broader range of investors to participate. The move aims to enhance efficiency, reduce costs, and marks a strategic shift for ParaFi.

Following a successful fundraising, the firm plans to expand its presence in the crypto domain and build a portfolio with 30 to 50 stakes over the next three to five years. The tokenized interests will be tradable on Securitize Markets, with additional financial options available through Securitize Credit's lending and borrowing services.

This initiative aligns with the growing trend of asset managers transitioning to blockchain-based models. The decision to choose Avalanche was based on its suitability for institutional use.

The broader market for tokenized real-world assets, driven by increased demand for private loans and US Treasury debt, has surpassed $10.9 billion. Notably, the tokenized US Treasury market has seen exponential growth in 2024, with its total value expanding from $726.23 million to $2.2 billion year-to-date.

This transition follows ParaFi’s August 2024 fundraising, where it secured $120 million from institutional investors like Theta Capital Management and Accolade Partners. The firm aims to use the funding to acquire stakes in the general partners of crypto-focused funds.

Over the next three to five years, ParaFi aims to build a portfolio with 30 to 50 stakes, reinforcing its dedication to tokenization technology. Furthermore, by tokenizing its fund, ParaFi opens access to a broader pool of investors beyond its existing institutional clients, including endowments, foundations, and family offices.

Carlos Domingo, CEO of Securitize, highlighted the increasing benefits of asset managers transitioning to blockchain-based models. Avalanche was chosen for its EVM compatibility, low transaction fees, and sub-second finality.

ParaFi’s tokenization comes as the broader market for tokenized real-world assets expands, surpassing $10.9 billion, driven by increased demand for private loans and US Treasury debt. The tokenized US Treasury market has experienced exponential growth in 2024, with its total value expanding from $726.23 million to $2.2 billion year-to-date.