With the increasing number of cryptocurrency networks, the competition has intensified, making it challenging for players like Avalanche to stand out. Although Solana and Ethereum currently lead the market, the Avalanche team aims to recapture the momentum of 2021, particularly through developments in the Real World Assets (RWA) sector. Today’s agreement is a significant milestone in this effort.
Avalanche and Galaxy Digital’s Innovative Approach to Real World Assets
In a recent official announcement, a breakthrough was revealed focusing on Real World Assets (RWA). Galaxy Digital successfully tokenized a complex Collateralized Loan Obligation (CLO), traditionally only traded among major banks and funds, on the Avalanche network. This development indicates the availability of a token version of this debt package on the blockchain.
CLOs pool loans that large companies secure from banks and package them into tradable assets. Investors who purchase these packages receive portions of the interest companies pay on their loans. Tokenization of these debt packages enables instantaneous transactions and increases liquidity, providing accessibility that was previously limited due to the complexity and lengthy documentation associated with traditional market trading.
“CLO slices were issued and tokenized on Avalanche, facilitating seamless, low-cost trading. Tokens listed on the INX platform grant qualified investors market access. Onchain execution introduces private credits onchain, offering instant payments, full structural transparency, improved secondary market liquidity, and greater collateral efficiency potential.” – Avalanche Announcement
With a $75 million initial issuance, Galaxy’s tokenized CLO is backed by Grove’s $50 million allocation.
“Earlier this year, citing the need for predictable swaps, low fees, and programmability in capital transactions, Grove selected Avalanche as the foundational partner platform for its corporate credit roadmap.” – Avalanche Announcement
AVAX Price Forecast and Market Outlook
Having experienced a downturn for 101 days since the September 22 peak, AVAX has begun to recover, albeit weakly, as the new year unfolds. Contrary to many leading altcoins, AVAX’s rally is expected to gain momentum if it surpasses the $14.8 mark, with a potential rebound to $18.5 and possibly $22 levels, contingent on favorable BTC market conditions.
Avalanche’s strategic focus on expanding its RWA presence as institutional interest continues to rise this year is noteworthy. Should new agreements keep this interest alive, Avalanche could gain increased attention from major financial institutions as a viable blockchain alternative to Ethereum and Solana, potentially fueling a price rally.