Key Takeaways

1. Cross-border remittance and emerging-market FX both suffer high costs and long delays, driven by complex procedures, banking-hour constraints, and dollar liquidity shortages.

2. KiiChain combines local-currency stablecoin liquidity across countries into an uninterrupted, 24-hour on-chain FX settlement layer.

3. Rather than eliminating intermediaries, KiiChain consolidates them into a borderless on-chain settlement platform, a practical use of blockchain technology to address the problem.

4. KiiChain has surpassed $500 million in cumulative transaction volume and 350,000 users. What remains to be seen is whether it can secure deep liquidity in emerging markets and execute the rest of its roadmap.

1. The Financial System Has Not Changed by 2026

On a Friday afternoon, the treasury manager at an exporter in Bogotá sends a payment to a supplier in the United States, and the screen returns nothing but a flat “processing” message.

A complicated process sits behind every cross-border transfer. The payment has to move through eligibility screening, verification of foreign currency accounts, currency conversion, and final settlement. Global financial infrastructure still functions by working around inefficiencies such as banks in different countries keeping different hours and operating under different regulatory regimes.

News from the other side of the world reaches us in real time. Technology has dissolved the borders around information and culture, yet the financial infrastructure that underpins the economy remains inefficient.

This market structure bears down harder on emerging market countries. Their local currencies carry a lower international standing, which makes immediate liquidity difficult to source and adds delay and cost at every stage of a transaction.

In some FX transactions, dollar liquidity is not deep enough to absorb the local currency on offer, so the conversion costs considerably more and takes considerably longer to complete.

2. KiiChain: The Start of an On-Chain FX Layer

KiiChain began with practitioners who had met these market inefficiencies at the front line.

Founders Danyel Arenas and Alex Cavallero previously ran a digital asset OTC desk and Inmersion Capital, a market making fund, across Latin America. Daily work at the OTC desk amounted to a continuous struggle with the structural defects of the traditional financial system, because they had to bridge shallow liquidity between local currencies and the dollar while filling two-way orders under inconsistent bank operating hours and strict capital controls.

Having absorbed the cost of that inefficiency with their own capital, they began to draw up a blueprint for an on-chain FX layer to address it.

KiiChain aims to serve as an on-chain FX layer for stablecoins and real-world assets (RWAs). The intent is to consolidate liquidity for dollar stablecoins and for local currency stablecoins onto a single chain, so that swaps and settlement run without interruption 24 hours a day, including the hours when banking systems are closed.

That vision has drawn market support, and the company has raised a total of $26 million from investors including Nimbus Capital.

3. Core Building Blocks of On-Chain FX Infrastructure

Delivering the global on-chain FX layer that KiiChain describes requires infrastructure that consolidates fragmented liquidity across multiple national stablecoins and supports real-time settlement without a break in service. Four components carry that load:

• KiiChain App: a hybrid marketplace that combines partnerships with institutional participants to execute trades across different assets and currencies.

• Kii Oracle: a data hub that connects real-time price data from external financial markets in a decentralized manner, based on a consensus mechanism among network validators.

• RWA Protocol: a tokenization gateway that brings the value of real economy assets into the on-chain ecosystem under a strict regulatory framework.

• KiiChain Pay: the core gateway that removes the technical barriers between fiat currency and on-chain assets, supporting uninterrupted, round-the-clock liquidity transfer through a unified API

These four components work together to lower the entry barriers of the traditional financial system and accelerate the shift toward an efficient on-chain financial base.

3.1. KiiChain App: A Settlement Engine Built on the Atomic Quote Network (AQN)

Emerging-market currencies are classified as peripheral assets within the global financial system, and that classification leaves them with a persistent structural weakness: thin liquidity and exposure to the risk of settlement delay. Existing foreign exchange trading methods, RFQ (request for quote) and CLOB (central limit order book) trading, do not resolve this problem.

A standard decentralized finance automated market maker (AMM) model is not a suitable alternative either, because the core of foreign exchange trading is currency exchange and genuine arbitrage demand rather than value storage or investment. Liquidity providers end up exposed to losses from price fluctuations, with little prospect of return from ordinary trading flow, a structural flaw in the model.

To address this, the KiiChain app adopted a model it calls the Atomic Quote Network (AQN), combining the immediacy of on-chain technology with the proven mechanics of traditional finance.

In this structure, the process of finding the most favorable exchange rate for the user follows the efficient method used in traditional finance’s RFQ system, while the actual settlement, the movement of money, happens instantly on the blockchain. The model draws on the price competitiveness of traditional finance and the fast, transparent settlement of blockchain, combining the strengths of both.

This resolves the settlement-delay risk characteristic of emerging markets, but liquidity risk is not a problem the model itself can solve. That is an external factor, and it will remain a task for KiiChain: continuing to build out a broad base of institutional market-making partners.

3.2. RWA Protocol: Compliant Tokenization

Traditional FX transactions cannot verify collateral directly, so they have relied on proxies for trust between banks, such as letters of credit and correspondent accounts.

KiiChain replaces that arrangement by tokenizing the collateral itself on-chain. The T-REX standard (ERC-3643) embeds identity and eligibility rules in the token programmatically, blocking transfers to addresses that do not qualify. Licensed off-chain operators handle sensitive identity verification, and only revocable cryptographic attestations are recorded on the chain.

Eligible asset classes range across real estate, bonds, and commodities, though regulated financial products can be distributed only through licensed issuers. Every function operates within a legal perimeter, so the entities that issue attestations remain subject to regulation and jurisdictional control.

3.3. Kii Oracle: Validator-Based Price Consensus

Price discovery in the traditional FX market takes place in the interbank market, which a small number of large dealer banks lead. Restricted access secures trust in that market, but it also means currencies that are not deeply integrated into the network, such as emerging market currencies, face opaque pricing that a handful of dealer quotes can determine.

On-chain, the approach is to replace that closed interbank trust with open consensus among validators. Kii Oracle has trusted validators collect prices independently from multiple exchanges, then reaches consensus by computing a median weighted by each validator’s staked share. Values that fall far outside a predefined standard deviation are excluded automatically, which prevents a small group from moving the price by submitting extreme quotes.

The consensus mechanism aggregates and validates fragmented price data, which is a technical remedy rather than a source of the liquidity depth the interbank market holds. When the source market for a referenced local currency stablecoin is itself thin, the structure remains exposed to sharp price swings and distorted quotes regardless of how refined the oracle’s computation logic is.

3.4. KiiChain Pay: Diversified Payment Routes

Bottlenecks in traditional FX settlement arise mainly at the points where money enters and leaves the banking system, including account opening, compliance review, and limits on operating hours. Speeding up the middle of the process changes little if a transaction is blocked at the initial stage and cannot move to the next one.

KiiChain Pay does not remove those contact points. It bundles four routes for moving funds between fiat currency and digital assets, covering on-ramp, off-ramp, and swaps, into a single integrated API interface.

• On-ramp: converts fiat currency into digital assets following KYC.

• Off-ramp: withdraws digital assets to a bank account following KYC.

• FX swap: a custodial digital asset exchange completed either through a contract or through provider processing.

• DEX swap: a permissionless on-chain exchange with no KYC, routed through the LiFi router.

This integration improves access without resolving the bottleneck itself, because the on-ramp, the off-ramp, and FX swaps still depend on externally licensed operators, KYC, and the operating hours of off-chain providers.

The only segment that actually bypasses the banking bottleneck is the DEX swap, where fiat currency plays no part. Pricing carries a comparable limitation: the market API adds a spread to quotes from external liquidity providers, which amounts to resale at a margin rather than independent price discovery.

4. How FX Transactions Change

What KiiChain has built is not finance without intermediaries but something closer to a settlement layer where intermediaries can meet without regard to borders or business hours.

Some may ask what difference that makes. Building a new system that removes every intermediary is not realistic, however, because funds processed within a regulatory perimeter still require operators that hold KYC obligations and licenses.

The actual reduction in the process is limited. Only three of the eight steps described disappear entirely, and the remaining five keep their basic structure, with a change in who performs them and in what they are called rather than the disappearance of the procedure itself.

The change resembles the consolidation of scattered currency exchange points into a single center. Converting pesos into dollars once meant visiting and waiting at different exchange houses in each country, each constrained by its own operating hours. KiiChain gathers these intermediaries onto one on-chain platform rather than removing them. The operational capacity that handles settlement remains, and convenience and speed improve because the parties interact in a single space where physical and temporal distance no longer applies.

Consolidating liquidity for local currency stablecoins from multiple countries onto a single chain carries real market value. Swaps between digital assets on the platform run automatically through smart contracts around the clock. The points at which actual fiat liquidity enters or exits, however, remain tied to the operating conditions of off-chain providers.

KiiChain’s effort therefore reads less as a full dismantling of the intermediary structure than as a process of refining and optimizing the persistent inefficiencies of the traditional financial system by moving the underlying infrastructure on-chain.

5. What It Takes to Become the FX Market’s New Key

According to KiiChain, cumulative transaction volume has passed $500 million, with roughly 350 B2B2C corporate clients and a user base above 350,000. User growth has held at about 10% per month, gradually expanding the company’s position in the market.

The larger items on the roadmap remain at the concept stage, including an on-chain debit card, a payment network across 50 countries, stablecoin deposit products, unsecured lending, US virtual accounts, and an AI-driven automated settlement system. What KiiChain delivers in practice today is concentrated in its initial function as FX settlement infrastructure.

The company has only just reached the starting line.

Moving beyond a payment tool to an on-chain financial hub depends above all on drawing participants in the ecosystem together. Network effects emerge only when liquidity partners, multinational companies, and individual users interact within a single network, and that is what makes the shift to next-generation financial functions possible.

Whether that network effect materializes is still an open question, and execution is what will settle it. If KiiChain can turn its roadmap into working products and secure deep liquidity in emerging markets, it would move beyond a single blockchain built for FX settlement and toward a broader layer for how these markets move money on-chain.

🐯 More from Tiger Research

Read more reports related to this research.

• Circle Internet Group (CRCL): The Start of Full Vertical Integration

• Stablecoin Value Chain: Payment-Centric Stablecoin Value Chain

• Stablecoin Issuance Market: Four Business Models Reshaping the Market

Disclaimer

This report was partially funded by KiiChain. It was independently produced by our researchers using credible sources. The findings, recommendations, and opinions are based on information available at publication time and may change without notice. We disclaim liability for any losses from using this report or its contents and do not warrant its accuracy or completeness. The information may differ from others’ views. This report is for informational purposes only and is not legal, business, investment, or tax advice. References to securities or digital assets are for illustration only, not investment advice or offers. This material is not intended for investors.

Terms of Usage

Tiger Research allows the fair use of its reports. ‘Fair use’ is a principle that broadly permits the use of specific content for public interest purposes, as long as it doesn’t harm the commercial value of the material. If the use aligns with the purpose of fair use, the reports can be utilized without prior permission. However, when citing Tiger Research’s reports, it is mandatory to 1) clearly state ‘Tiger Research’ as the source, 2) include the Tiger Research logo following brand guideline. If the material is to be restructured and published, separate negotiations are required. Unauthorized use of the reports may result in legal action

📥 Download Report

1. On-Chain Data Is Not Ready for Use

The digital asset market is advancing rapidly. Stablecoins already process trillions of dollars a year in payments and remittances, and tokenization of traditional assets such as stocks and bonds is gaining momentum. Blockchain’s role now spans the financial value chain, from issuance and distribution to payment and settlement.

The question institutions ask has shifted from whether blockchain works to how to run it within existing accounting, tax, audit, and compliance workflows. Blockchain may sit at a new infrastructure layer, but institutional finance still holds it to the same procedures, controls, and standards.

This shift exposes a data challenge. Legacy systems run on standardized, structured records, but on-chain data is raw execution data, the direct output of state transitions, and institutions must index, decode, and normalize it before they can use it. It looks less like a tidy ledger and more like an unsorted pile of receipts.

Institutions therefore need a dedicated data pipeline that collects transaction data from distributed ledgers, refines it for business use, and stores and retrieves tens of terabytes on demand. On-chain data is public, but public access does not make it usable for institutional operations.

2. On-Chain Data Infrastructure: Reality and Limits

In the early stage of the digital asset market, this data access problem drew limited attention, since most digital asset services were small-scale pilots for a narrow set of participants. JPMorgan’s deposit token project, for example, functioned as a restricted payment instrument for a small group of institutional clients. In an environment where participants and use cases were clearly defined, transaction types stayed simple, and real-time precision carried limited importance.

On-chain data faced a lower bar at the time, since operations did not need every state to match in real time. Eventual consistency, the final state converging after a short delay, was often enough. A limited number of self-hosted nodes, an external RPC (Remote Procedure Call) endpoint, or a basic on-chain data API could support most operational needs in this environment.

This approach breaks down as on-chain environments expand. Asset types have diversified and transaction volumes have grown quickly, and data infrastructure now has to process more data, faster and more accurately. As digital asset services move into full-scale operation, the technical bar has risen from simple data lookup to something far more precise, timely, and reliable.

3. Institutional-Grade On-Chain Data Infrastructure Requirements

This higher bar requires a different standard for evaluating infrastructure. Tiger Research identifies three core requirements for on-chain data infrastructure that institutional finance can trust and use: completeness, consistency, and stability. On-chain data has to meet all three before institutions can actually rely on it in production.

3.1. Completeness: Capturing Every Transaction

Completeness is the most basic requirement for on-chain data infrastructure. It measures whether every transaction recorded on the blockchain ledger is collected and carried through processing without gaps. In institutional finance, a single missing transaction can change a balance calculation, an accounting entry, or a settlement result.

Gaps can first appear at the collection stage. A blockchain groups transactions from a given period into blocks and writes them to the ledger, and data infrastructure collects and processes these blocks in order. If node failures or network issues interrupt block collection for a stretch, the transactions in that stretch go missing along with it. This type of gap is comparatively easy to catch and fix, because a backfill operation can recollect the missing blocks and close the gap.

A second problem arises after infrastructure has collected all the raw block data. An indexer extracts the needed transaction records from that raw data and converts them into a queryable form, and records can be lost here if the parsing is incomplete. Consider indexing token transfer data on Solana, which runs an original token standard alongside an extended standard. An indexer built to parse only the original standard will miss the transfer history of tokens issued under the extended one.

High-performance chains raise the bar for completeness further. Shorter block times and higher transaction throughput both increase the volume of data the pipeline has to process within a short window. Even flawless collection and processing logic can fall behind if real-time processing cannot keep pace with the chain’s speed, and new transactions then take longer to show up. Completeness, in the end, means more than capturing every transaction. It means keeping pace with how fast a chain moves and how often it changes.

3.2. Consistency: Matching the Ledger

While completeness checks for missing data, consistency checks whether the data collected matches the blockchain ledger. It matters just as much as completeness in institutional finance, because a single bad data point can distort every calculation built on it.

On-chain data is probabilistic until finality. Traditional financial systems record and manage data on a central server, while blockchains update the ledger through multiple participants who validate blocks and reach consensus independently. Network delays or differences in validation timing can make two different blocks appear valid at the same time.

A block initially treated as valid can later drop out of the final ledger and get replaced by another, an event known as a reorg. Transactions in the dropped block can then fall out of the final ledger entirely or reappear in a different block. Data collected at one point in time can therefore diverge from the ledger state that is eventually finalized. This is a consistency problem.

Consistency problems can also originate in the node client, the core software that runs a blockchain node and functions much like the blockchain’s operating system. A flaw in this software can produce errors when it interprets and calculates ledger data. Major Ethereum node clients have, in fact, produced errors in transaction processing and fee calculation. This resembles a financial service that misreports a customer’s assets or settles fees incorrectly.

Collecting data alone does not guarantee consistency. Data captured at one point can diverge from the ledger that later finalizes, and node client defects can cause ledger data to be misread. Using on-chain data as institutional finance’s source of truth therefore requires continuously checking the collected data against the ledger.

3.3. Stability: Maintaining Operation at Scale

While completeness and consistency verify data quality, stability checks whether data collection, processing, and retrieval can continue without interruption at scale. This is a non-negotiable requirement in an industry where a single outage or delay can cause serious damage. On-chain infrastructure also runs on a network that never stops, which raises the bar for stability even further.

Large-scale operation means handling many requests at once. Traditional server infrastructure raises throughput through load balancing, which spreads requests across multiple servers. Blockchain infrastructure cannot get the same result just by running multiple nodes, because nodes can sit at different points in block sync and return different results for the same query.

Consider a user checking whether a transaction has processed right after sending it. The node that first received the transaction may have confirmed it, while another node handling the query hasn’t caught up yet. The infrastructure has responded correctly in both cases, but the user sees two different states for the same transaction.

Stability gets harder to maintain as data volume grows. Checking the current state isn’t enough for institutional finance, which also needs to calculate an asset’s state at a specific point in time and trace the transaction history behind it. This requires an archive node that preserves historical records, and depending on the chain, that record can run to tens of terabytes. Storing and querying data at this scale raises the risk of query delays and system bottlenecks.

Ongoing maintenance is another key piece of stability. Blockchains keep changing through hard forks, chain upgrades, and node client updates even while running in production. If the data pipeline can’t keep up with these changes, infrastructure that had been working fine can stop without warning. Stability, in the end, isn’t something a system secures once at launch. It has to be maintained by continuously adapting to changes in the chain environment.

4. Lambda256: On-Chain Data Infrastructure for Institutional Finance

Companies preparing to launch a digital asset business rarely build every layer of infrastructure themselves. Most choose a proven global chain infrastructure and build their business model on top of it. On-chain data infrastructure deserves the same approach, since meeting the completeness, consistency, and stability bar outlined above takes more than building a database.

A complex multi-chain environment requires indexing each chain’s data structure in real time while holding up under heavy traffic. It also demands constant adaptation to new standards and chain upgrades. On-chain data infrastructure isn’t a short development project. It’s closer to a large-scale infrastructure business that takes substantial capital, time, and operational experience.

A proven infrastructure partner lets a company focus on its core business. That’s a more realistic path than building everything in-house. This is why Lambda256 has become a technology partner for major digital asset businesses in Korea. Lambda256, the blockchain technology subsidiary of Dunamu, provides blockchain infrastructure to exchanges, financial institutions, and Web3 companies and has built operational experience in the Korean market along the way.

Building on this experience, Lambda256 launched Nodit, a Web3 development platform, in 2024. Datashare, Nodit’s recently unveiled on-chain data infrastructure product, was built around the data quality and operating standards institutional finance demands. Lambda256 ran a data warehouse version of the service for select partners for more than two years before the official launch, so the infrastructure has already been tested under live conditions.

4.1. Technical Edge: An In-House Indexing Engine and High-Performance Pipeline

Datashare’s technical edge lies in turning fragmented multi-chain data into datasets that fit existing workflows. Each chain has its own data structure and recording method, so collection and processing rules have to be built around each chain’s specifics. New standards and network upgrades keep changing each chain’s operating environment on top of that, and the more that happens, the harder data infrastructure is to manage. Datashare handles these chain-specific differences and ongoing changes through domain experts, an in-house indexing engine, and a high-performance data pipeline. Further details on Datashare’s technical differentiation can be found in an article jointly authored by Lambda256 and Decipher, Seoul National University’s blockchain technology society.

This structure only holds up if the node infrastructure feeding it raw data holds up too. Datashare runs on Nodit's Hyper Node architecture, which lets it handle heavy request volumes and node failures with flexibility. The Hyper Node architecture maintains a minimum threshold of available nodes and controls latency and recovery thresholds, so a problem on one node doesn't spread through the rest of the collection process. It also keeps running without interruption through mainnet upgrades and node software swaps.

Another key differentiator is that collected data goes through a separate verification process. Datashare checks the data against the chain state on an ongoing basis. It flags discrepancies from reorgs, node client errors, and chain upgrades, and confirms that each transaction’s outcome matches the resulting event record and balance change. This cross-check against the chain cuts data gaps and processing errors and gives Datashare the reliability it needs to serve as a source of truth within existing workflows.

Accuracy alone isn’t enough to put on-chain data to work. Institutions also need broad coverage across chains and data types. Datashare supports 13 core chains with high market demand by default and can extend to custom datasets built on the 50-plus chains Nodit already operates. Lambda256 plans to add labeled data next, combining exchange wallet addresses, DeFi smart contracts, and pricing data. That would extend the use cases beyond accounting and tax into risk management and anomaly monitoring.

4.2. Operational Edge: Compliance and Workflow Integration

Using on-chain data in institutional finance takes compliance, not just data quality. Korean financial institutions in particular apply strict standards, such as network segregation, access controls, and internal network operating rules, when they bring in outside data infrastructure. Datashare supports on-premise deployment within domestic IDCs to meet these requirements and holds SOC 2 certification to back up its security management framework. This lets financial institutions adopt on-chain data within their own security policies and regulatory guidelines.

It also matters that financial institutions can manage where their data lives and who can access it. Datashare supports an architecture that sends on-chain data straight to the cloud storage an institution already uses. It can load on-chain data in real time into an institution’s own environment, AWS S3, for example, so institutions get an outside infrastructure solution while keeping data management and access control in-house.

Datashare also plans to keep strengthening its integration with the data analysis tools financial institutions already run. It supports major data warehouses and analytics platforms such as Snowflake, BigQuery, and Databricks, so on-chain data connects organically into existing workflows.

Lambda256’s operational support is another strength. On-chain data infrastructure runs on a blockchain network that never stops, so catching and responding to outages or delays quickly matters. Datashare provides round-the-clock monitoring and dedicated technical support through a domestic team, and this cuts the operational load financial institutions would otherwise carry themselves. Institutions can then manage and use on-chain data reliably without significantly expanding their own blockchain infrastructure teams.

5. Where On-Chain Data Infrastructure Matters

Scenario 1: Tracking On-Chain Holders of Tokenized Stocks

A growing number of institutions are issuing listed stocks on chain as tokens alongside their traditional listings. Galaxy Digital, a global digital asset firm, tokenized its common stock as $GLXY and issued it on Solana. Securitize, an asset tokenization company, issued its own stock ($SECZ) on Solana the same day it listed on the NYSE. Solana’s speed and low cost have made it the go-to infrastructure for financial firms tokenizing listed stocks in a regulatory-compliant form.

Institutions handling both traditional assets and on-chain tokenized securities face a new operational challenge. Broker-dealers need to track token holders and beneficial owners on the blockchain accurately and prove that record to regulators and auditors. This work repeats not just at closing but at every dividend record date and voting record date. Missing data or a miscalculated balance at any of these points can lead to serious risks, including misdirected payments, disclosure errors, and failed audits.

The problem is that Solana’s data structure makes this hard. Solana wins on cost and speed, but it stores transaction records across a large number of separate accounts. A single DeFi transaction can scatter data across token accounts, liquidity pools, and fee accounts. Solana’s archive nodes also hold hundreds of terabytes of accumulated data, which makes it impractical for most institutions to reconstruct historical holder records and transaction history at a given point in time on their own.

Integrating Solana-based tokenized assets into institutional finance therefore requires data infrastructure built for immediate analysis, with no further processing needed. Datashare refines fragmented source data into a normalized form institutions can query directly in their existing data warehouses. It has optimized its pipeline for Solana's sub-0.4-second block times, which gives it the throughput to process roughly 20,000 transactions per second per chain in real time and keeps indexing delay to a minimum.

Scenario 2: Risk Management in Agentic Payment Settlement

A market for agentic payments, where AI agents decide and execute payments on a user’s behalf, is emerging. Since Coinbase launched its on-chain payment protocol x402, stablecoin-based autonomous payment infrastructure has picked up real momentum.

For agent-to-agent autonomous payments to work as a commercial financial service, the quality of the on-chain data behind each decision matters above all else. As human review drops out of the loop, the system has to judge available balance, transaction finality, and fraud risk from data alone. Missing or distorted on-chain data at this stage can cause serious errors across both payment approvals and rejections.

Several concrete factors in real blockchain environments drive this kind of data loss and distortion. The most significant is transactions that fail to execute. Depending on network congestion, more than 20% of all blockchain transactions fail, and on Solana specifically, the failure rate among non-vote transactions can exceed 40%.

If a payment system mistakes one of these failed transactions for a successfully processed one, it treats the balance as reduced even though no payment actually went through, then rejects the next payment over a balance mismatch that shouldn’t exist. Block reorgs are another critical factor that deepens this distortion, because a transaction that looked approved at one point can later get cancelled and pulled from the record.

To address this reliability problem at the source, Datashare filters for data with confirmed finality and supplies payment systems only with transactions confirmed as successful. It runs unconfirmed transactions and failure records from the raw blockchain data through real-time verification at the pipeline stage and indexes and delivers only the refined dataset. This removes the risk of malfunction from on-chain distortion.

Datashare is also extending its coverage to major local blockchains at home and abroad, such as GIWA and Kaia, which broadens its business versatility. This matters because it gives agentic payment infrastructure a stable data foundation that isn’t locked into a single global mainnet, and lets it adapt flexibly to each region’s service environment and regulatory requirements.

6. Conclusion

A digital asset business succeeds or fails on how accurately it handles data, because on-chain data now underpins every financial process, from issuance to payment to settlement. Missing or incorrect data can therefore erode trust in a service and trigger serious regulatory risk. Datashare functions as the infrastructure that reduces this operational risk and connects institutional finance to on-chain data it can actually use in its workflows.

Financial institutions can also extend their systems with Lambda256’s other financial technology solutions beyond Datashare. SCOPE, for digital asset settlement and operations, and CLAIR, for regulatory compliance, can be added as the business grows and build out a more complete system over time. This lets institutions add the functions they need in stages, without rebuilding their infrastructure from scratch.

As a result, financial institutions can offload complex infrastructure management and system maintenance and focus on their core business, service innovation and product differentiation. It lowers the barrier to entry while giving institutions a stable way to add capabilities as the business grows and regulations change.

📥 Download Report

This report was produced with the support of Lambda256.
Nodit, featured in this report, is Lambda256's SOC 2 Type II–certified on-chain data infrastructure. For consultation or inquiries about adopting the solution, please use the button below.

☎️ Request a Consultation

Disclaimer

This report was partially funded by Lambda256. It was independently produced by our researchers using credible sources. The findings, recommendations, and opinions are based on information available at publication time and may change without notice. We disclaim liability for any losses from using this report or its contents and do not warrant its accuracy or completeness. The information may differ from others’ views. This report is for informational purposes only and is not legal, business, investment, or tax advice. References to securities or digital assets are for illustration only, not investment advice or offers. This material is not intended for investors.

Terms of Usage

Tiger Research allows the fair use of its reports. ‘Fair use’ is a principle that broadly permits the use of specific content for public interest purposes, as long as it doesn’t harm the commercial value of the material. If the use aligns with the purpose of fair use, the reports can be utilized without prior permission. However, when citing Tiger Research’s reports, it is mandatory to 1) clearly state ‘Tiger Research’ as the source, 2) include the Tiger Research logo following brand guideline. If the material is to be restructured and published, separate negotiations are required. Unauthorized use of the reports may result in legal action

📥 Download Report

Summary

What the market calls asset tokenization is only the visible tip of the iceberg. Beneath the surface lies a market worth hundreds of trillions of dollars that stands to restructure the foundational rails of conventional finance.

Many observers treat the placement of U.S. Treasuries onchain as the whole of the RWA market, but that view captures only the surface of a far larger capital market. The real transformation is taking place not in the visible digitization of assets, but in the wholesale reconstruction of the financial infrastructure that has long remained submerged: the clearing systems, settlement layers, and liquidity networks that underpin every transaction.

The scale of activity already underway makes this concrete. According to Broadridge, the firm processes roughly $7.7 trillion in onchain repo transactions each month, and the DTCC has moved into Treasury tokenization, with both operating not as pilot experiments but as live components of financial market structure. The Hong Kong government’s issuance of HKD 6 billion in digital green bonds through HSBC Orion, combined with the immediate deployment of repo collateral, demonstrates a future in which issuance and distribution form a single, uninterrupted process.

These developments share a common foundation: the Canton Network. Canton was designed from the outset for institutional use. It protects commercially sensitive information through Daml, its smart contract language, while eliminating counterparty risk through atomic settlement, the simultaneous exchange of assets and payment in real time. Its public permissioned structure satisfies Basel Committee on Banking Supervision (BCBS) requirements, giving global financial institutions a compliant path into the onchain ecosystem without material balance sheet burden.

Having built a substantial record of institutional deployments in Western markets, Canton is now extending its reach into Asia. Korea is emerging as a focal point: following the passage of security token offering (STO) legislation in 2026, which establishes the legal standing of distributed ledgers, major institutions including Hanwha Investment Securities, Shinhan Securities, Shinhan Asset Management, and KB Securities have moved quickly to join the Canton ecosystem in order to establish positions in global issuance and distribution networks.

The infrastructure layer of a new financial standard is being assembled now, and the institutions that engage at this stage will have shaped its architecture before later entrants arrive.

📥 Download Report

1. The Internet of 1996 and the RWA Market

Larry Fink, CEO of BlackRock, wrote in his 2026 shareholder letter: “We believe tokenization today may be at a similar point as the internet in 1996.”

1996 was an inflection point. The internet existed, but most enterprises held back. Only 26% of Fortune 500 companies had integrated online commerce at the time. When early adopters demonstrated success, the rest rushed in, but by then, the early movers had already entrenched their positions.

The RWA tokenization market is at a similar juncture. Many institutions remain on the sidelines, yet leading cases are already emerging. The most prominent is BlackRock’s BUIDL (BlackRock USD Institutional Digital Liquidity Fund), a tokenized fund holding U.S. Treasuries onchain. Launched in March 2024, it expanded to seven blockchains within 18 months and, according to rwa.xyz, the fund grew to approximately $2.5 billion in market cap.

Scale alone does not capture the shift. The market has moved past simply putting real-world Treasuries onchain. New financial services are now being layered on top of issued assets. Multiple DeFi protocols have adopted BUIDL as a base asset, and Binance officially accepted BUIDL as trading collateral.

According to rwa.xyz, onchain-issued assets (Distributed Assets) stood at approximately $34 billion as of May 2026, more than 20 times the $1.5 billion recorded in early 2020. Adding Represented Assets, where physical assets remain with custodians, but ownership is recorded onchain, brings the total to approximately $360 billion.

2. The RWA Market Has Already Started

Tokenizing an asset is not just a matter of converting existing financial products into a digital format. It changes how those products work, including settlement speed, post-trade infrastructure, and the full processing stack. The approach is not to replace legacy systems but to build faster and more precise rails on top of them.

Most discussions of RWA tokenization stop at BlackRock’s BUIDL, a tokenized fund that issues U.S. Treasuries as tokens on a blockchain. BUIDL is a landmark case in the RWA market, but a single example is not enough to answer why tokenization matters.

Finance spans far more than bond issuance. The repo market, securities settlement, and capital raising each carry distinct structural inefficiencies, and the value tokenization can unlock in each differs considerably. To understand why tokenization matters, each sub-market needs to be examined on its own terms.

Short-Term Funding (Repo)

A repo (repurchase agreement) is the defining transaction of short-term funding markets. An institution pledges bonds as collateral to borrow cash, then returns the cash plus interest at maturity in exchange for the bonds. Most contracts are overnight. The collateral is safe, the rates are low, and the transaction is routine.

Problem

Limited operating hours

Repo markets operate only within system hours. On weekdays, settlement runs once a day. On weekends and holidays, it stops entirely. But risk does not stop with it.

If adverse news hits over the weekend, mark-to-market losses accumulate without settlement. When markets open Monday, the entire weekend’s accumulated exposure hits as a single margin call. Meeting that call immediately is not realistic. Selling bonds or monetizing them via repo takes time. The only solution is pre-positioned cash held in reserve, capital that sits idle precisely because the settlement infrastructure cannot move continuously.

Solution

Onchain repo solves this problem at the structural level. The core is the DvP (Delivery versus Payment) mechanism. It works on the same principle as paying for an item at the cash register: collateral and cash are exchanged simultaneously, and it is structurally impossible for one side to transfer first.

In practice, the transaction works as follows. The party seeking funds posts the amount, rate, and maturity terms, and the counterparty accepts. Both sides deposit their respective assets into a smart contract, a digital agreement that executes automatically when conditions are met. The cash borrower deposits tokenized bonds; the cash lender deposits tokenized cash. The moment both confirmations are received, the exchange completes automatically.

Tokenized bonds and stablecoins move onchain 24 hours a day. Because they do not depend on legacy settlement infrastructure, collateral can be moved on a Friday afternoon or a Sunday morning. The constraint of system operating hours disappears.

Settlement frequency changes as well. Under the legacy system, manual confirmation limited settlement to once a day. Smart contracts automatically trigger margin calls and settlement the moment a position incurs a loss. With no gaps, there is less reason to pre-position excess cash reserves.

Case Study: Broadridge DLR

Broadridge is a global capital markets infrastructure firm that handles settlement and clearing processes for banks and broker-dealers through technology. The company launched DLR (Distributed Ledger Repo), a distributed ledger-based repo trading platform built on the Canton Network as its underlying blockchain.

Because DLR is blockchain-based, it is not bound by the operating hours of legacy settlement infrastructure. Collateral movement and settlement are available on weekends and public holidays, and repo transactions can be initiated and closed at any point in the day. The risks that arose from limited system operating hours are structurally reduced. Smart contracts also automate the full repo lifecycle, reducing settlement failures and disputes while improving collateral reusability.

As of April 2026, DLR processes $7.7 trillion in monthly settlement volume and $368 billion in average daily volume. HSBC, UBS, and Société Générale are among the global banks already participating on the platform.

Securities Settlement Infrastructure

Securities settlement is the stage after a trade is executed, where the buyer delivers payment and the seller delivers the securities. T refers to the trade date. Under standard practice, settlement occurs on T+1 or T+2, meaning funds do not move until at least one to two days after the trade.

Problems

Problem 1: Settlement Lag and Counterparty Risk

A real estate transaction is a useful analogy. Signing a purchase contract does not transfer the title or the final payment. Those happen days later. The trade and the asset transfer occur at different points in time.

As noted above, the current securities settlement infrastructure creates a time gap between trade execution and asset transfer. If a counterparty defaults during that window, significant losses follow.

Central Counterparty Clearinghouses (CCPs) exist to prevent this. A CCP interposes itself between buyer and seller so that if one side defaults, the other does not absorb the loss directly. In the United States, the NSCC fills this role. In Korea, it is the clearing and settlement division of the Korea Exchange (KRX).

Historically, no CCP has reached outright default. The systemic consequences of a CCP failure are severe enough that member institutions and governments have intervened before that point. CCPs have, however, been pushed to their limits under extreme market conditions.

During Black Monday in 1987, the Hong Kong Futures Exchange clearinghouse was brought to the brink of insolvency by mass margin call failures. The Hong Kong government injected public funds and halted trading for four days before the situation was resolved. In the 2008 Lehman Brothers collapse and the 2018 Nasdaq Clearing crisis, portions of loss-absorption funds were actually depleted.

Problem 2: Fragmented Ledgers and Reconciliation Costs

When a single equity trade is executed, the issuer, custodian, clearinghouse, and settlement institution each record it separately in their own ledgers. The same transaction is entered four times across four institutions. As these ledgers do not synchronize in real time, they are matched up retroactively using standardized message formats. This process is called reconciliation.

The ledgers do not always match. Each institution processes the same trade at different times, and differences in internal system formats mean data can be lost or altered during message conversion. When records differ, staff must manually identify and correct the discrepancy. Some steps are automated, but errors persist.

This is why ongoing operational headcount and systems costs for reconciliation and position breaks remain a permanent fixture. Corporate actions, events that affect company structure or shareholder rights such as dividends, stock splits, and mergers, add further complexity. Each institution must update its ledger independently and run reconciliation again, multiplying the workload.

Solution

Moving securities settlement infrastructure onchain changes two things. All participants see the same ledger, and trade execution and asset transfer happen simultaneously.

Moving securities settlement infrastructure onchain addresses both problems through a single structural change: all participants share one authoritative ledger, and trade execution and asset transfer occur within the same transaction. The shared ledger means every participant’s data updates simultaneously when a trade is recorded, eliminating retroactive reconciliation. The unified environment for cash and securities removes the settlement lag that creates counterparty exposure.

When cash and securities are both onchain, trade execution and asset transfer can be bundled into a single transaction. Today, cash moves through the banking system and securities move through the central securities depository separately. Onchain, both exist in the same environment and execute simultaneously.

This is Atomic Settlement. If all conditions are met, the entire transaction succeeds. If any single condition fails, the entire transaction is cancelled.

Case Study: DTCC

Onchain securities settlement is already operating in live transactions. The London Stock Exchange Group (LSEG) deployed its digital settlement platform DiSH on Canton and applied it to securities settlement. Lloyds Bank completed a transaction purchasing tokenized UK gilts with tokenized deposits. From issuance to settlement, the entire process was handled onchain.

The most significant case is DTCC. The Depository Trust & Clearing Corporation is the core infrastructure of U.S. securities settlement, processing the clearing and settlement of most securities traded in the United States.

Partnering with Digital Asset, the company behind the Canton Network, DTCC received a no-action letter from the SEC in December 2025, a regulatory pre-commitment not to take action against a specified activity. The target is an MVP (minimum viable product) launch in the first half of 2026.

For an institution where a single settlement failure could trigger license revocation, the decision to adopt onchain infrastructure is not a casual experiment. It reflects a considered judgment that the risks embedded in the current settlement architecture outweigh the operational risk of moving to new rails.

Capital Raising

The capital raising market is where governments and corporations issue bonds and equities to raise funds. It divides into a primary market, where new securities are issued, and a secondary market, where issued securities are traded and utilized among investors. A bond represents a promise to repay borrowed principal plus interest at maturity; an equity grants the holder an ownership stake in the issuing company.

Problems

Problem 1: Issuance Process Delays

The longer the preparation period, the more variables outside the issuer’s control accumulate. Hedging costs accrue, investor demand can shift, and in the worst case the deal falls apart entirely. Each week added to the timeline is a week of exposure to conditions the issuer cannot control.

Problem 2: Fragmented Collateral Systems

Institutional investors buy assets for the yield. The issue is what comes next. If purchased assets can be deployed in repo, posted as collateral, or linked to other transactions, capital keeps working. The smoother those connections, the more transactions the same asset can support, and the more valuable the asset becomes from the issuer’s perspective.

But even when counterparties have agreed on collateral utilization, execution is difficult. A collateral transaction requires eligibility verification, haircut calculation, and title transfer to proceed in sequence, with a different institution involved at each step.

These institutions’ systems are not connected to one another. At each stage, staff must send messages and wait for confirmation. In this structure, the volume of issued assets has little bearing on what can actually be put to work, which is a considerably smaller figure.

Solution

Onchain issuance approaches both problems differently.

The entire issuance process runs on smart contracts. Within regulatory parameters, agreed issuance terms are defined in code. After KYC and AML verification, subscriber registration, allocation, and payment settlement are processed automatically. The steps where staff manually confirmed and converted messages are eliminated, compressing the issuance cycle significantly.

The post-issuance utilization structure changes as well. Tokenized assets exist in an environment where all participating institutions share the same data in real time on the same network. Eligibility verification, haircut calculation, and title transfer for collateral transactions are handled within a single flow, without passing between separate systems. The ledgers that issuers, underwriters, depositories, and collateral managers once maintained separately consolidate into one. Once an asset is issued and adopted, it can immediately serve as collateral or an underlying asset for other transactions.

One prerequisite must be addressed for this model to take hold. Issuance privacy. Issuance terms, underwriter allocations, subscription prices, and investor lists are data that cannot be exposed to the market. If that information leaks, market prices move in advance and issuers absorb more expensive terms. Existing public permissionless blockchains conceal only wallet addresses while exposing all transaction data to everyone. For onchain issuance to scale, it must operate on permissioned infrastructure where transaction data is visible only to the parties involved.

Case Study: HSBC Orion

HSBC is a UK-based global bank with $3 trillion in assets. One of the leading institutions in bond underwriting and issuance, it launched its own digital asset platform, HSBC Orion, in 2023 to serve as digital bond issuance infrastructure. HSBC Orion operates on the Canton Network.

In February 2024, the Hong Kong government issued HKD 6 billion (approximately USD 770 million) in digital green bonds through HSBC Orion. It was the first government-issued digital bond denominated in multiple currencies simultaneously, covering HKD, CNH, EUR, and USD. More than 50 global investors across eight nationalities participated, an unusually large participation base for an early-stage digital bond issuance. The settlement cycle was compressed from T+5 to T+1.

The significance of this issuance lies not in the issuance itself but in what followed. Within days of completion, HSBC and the Bank of East Asia (BEA) entered into a repo transaction using the digital green bond as collateral. The moment the bond was live in the market, it was immediately put to use as collateral on the same network. It was the first confirmed instance of issuance and utilization connecting without interruption.

The structure works as follows. When HSBC Orion issues a digital green bond, the bond is recorded as a token in a Bond Registry on Canton. When HSBC and BEA execute a repo transaction, a separate application on the same Canton network takes the token as collateral and settles payment simultaneously.

The Hong Kong government did not treat this issuance as a one-off. Following the transaction, the HKMA launched the Digital Bond Grant Scheme, committing to subsidize half the issuance costs for issuers who issue digital bonds. The intent is to convert a single experiment into a standard for market infrastructure.

Digital Payment Currency (Stablecoins & Payments)

Stablecoins are digital currencies pegged 1:1 to the US dollar. Unlike conventional cryptocurrencies, their value is largely stable, making them function as currency moving on a blockchain. USDC and USDT are the leading examples.

Problems

Problem 1: Public Transaction Data

On public blockchains, all transactions are visible to anyone. Who sent what amount to whom, when, and with what balance can be retrieved instantly by searching a single wallet address on a block explorer, a tool for querying blockchain transaction records.

Analyzing a company’s stablecoin payment history reveals unit prices negotiated with counterparties, seasonal revenue patterns, new market entry timing, M&A fund flows, and executive compensation.

There are clear efficiency gains in payment. Full public exposure of transaction data, however, is a structural limitation.

Problem 2: Disconnection from Internal Systems

When a company receives a stablecoin payment, the funds arrive in a blockchain wallet that sits entirely outside its accounting system, ERP, and treasury platform. Before that money can be used, the treasury team must manually withdraw it to a bank account, book the accounting entries, and route it to wherever it needs to go. Each of those steps requires manual intervention and time. A payment that arrived in seconds can take hours or days to become operationally available, erasing the speed advantage entirely.

Solution

Changing the blockchain infrastructure design addresses both problems structurally.

Transaction data is visible only to the parties involved. Payment amounts, counterparties, and balances are not exposed externally. Only authorized regulators and compliance partners can access the records. Privacy and oversight operate together.

When a payment arrives, it connects directly to the ERP and accounting system, putting the funds to work immediately without intermediate steps.

Case Study: Bitwave

Bitwave is a US-based digital asset accounting and treasury platform. It integrates with major ERPs including NetSuite, QuickBooks, and Sage Intacct. Bitwave built a private stablecoin-based B2B payment infrastructure on the Canton Network.

When an invoice is issued, Bitwave generates a payment via smart contract on the network. The moment the payment executes, revenue is automatically recorded in the sender’s ERP and a payable is recorded in the recipient’s ERP. SOC compliance audits run on the same data. Payment, accounting, and compliance are completed within a single workflow.

Transaction data does not leave the network. Only the two parties and authorized auditors can view the records. Other participants in the network cannot see the transaction at all. Commercial information such as counterparty pricing, revenue patterns, and transaction frequency is fully protected. This is the result of Daml, Canton’s smart contract language, being designed to block transaction visibility to non-parties by default.

3. Where All These Cases Converge: Canton Network

The cases covered above span different sectors and involve different institutions. All of them run on the Canton Network because the infrastructure satisfies the three conditions that institutions require.

Condition 1: Transaction-Level Privacy

In government bond repo transactions, participating institutions saw only the transactions they were party to. Stablecoin payments concluded without balances or counterparty information being exposed to the market.

If transaction data is open to everyone, positions are visible to the market and participants are exposed to front-running risk. Blocking all information prevents regulators from oversight. What is needed is a structure where the parties to a transaction see everything, regulators see what they need for supervision, and all other participants are blocked from information irrelevant to them.

The Canton Network implements sub-transaction privacy at the protocol level, with smart contracts delivering to each participant only the portion of a transaction relevant to them. In an exchange involving securities and cash, the bank sees only the cash movement and the securities registry sees only the securities movement, while the seller, buyer, and transaction application see both sides. This selective visibility aligns directly with regulatory audit requirements.

Elliptic and TRM Labs are connected as Super Validators and integration partners, conducting AML oversight and maintaining compatibility with major jurisdictions’ reporting requirements.

Condition 2: Atomic Settlement and Cross-Application Interoperability

In government bond repo transactions, tokenized government bonds and cash were exchanged in a single transaction. The digital green bond issued by HSBC was immediately used as repo collateral by BEA within days of issuance.

For these transactions to work, atomic settlement is required. Every step must complete simultaneously or cancel simultaneously. Selling a government bond and receiving cash typically takes two days, passing sequentially through a clearinghouse, custodian bank, and settlement system. If one party has already transferred its asset and the counterparty becomes insolvent, the party that performed first absorbs the loss. The Lehman Brothers collapse illustrated the consequence: unsettled trades locked up markets for weeks precisely because one side had already transferred assets when the other became insolvent.

Atomic settlement eliminates the problem. When a transaction is initiated, all parties verify the validity of their respective positions and send approval signals. Execution requires unanimous approval. If any single party rejects, the entire transaction is cancelled. Once confirmed, a transaction cannot be reversed.

Condition 3: Public Permissioned Structure

There is a reason conservative global financial institutions such as HSBC, UBS, Société Générale, and LSEG appear repeatedly across Canton use cases.

In December 2022, the Basel Committee on Banking Supervision (BCBS) divided tokenized assets into two classifications. Group 1 covers tokenized traditional assets and stablecoins, subject to the same capital requirements as their underlying assets. Group 2 covers assets issued on permissionless blockchains, carrying a risk weight of up to 1,250%. That is the equivalent of holding capital equal to the full value of the asset.

The same bond carries an entirely different capital burden depending on which blockchain it sits on. A fund like BlackRock’s BUIDL, which grew on Ethereum, was viable because its primary holders were exchanges, DeFi protocols, and crypto funds, entities outside the Basel regulatory perimeter.

For regulated global banks to hold the same asset on their balance sheets, two options exist. Permissionless chains are classified as Group 2, creating significant capital pressure. Closed private chains avoid regulatory friction but sever institutional connectivity.

The Canton Network aims to address this through a public permissioned structure. Application providers define participant verification standards and access permissions directly. Each transaction is validated only by the nodes that are parties to that transaction.

By seeking to mitigate the core risk factors that Basel identified in permissionless chains, the network is designed to align with characteristics generally associated with BCBS Group 1 treatment.

4. Canton Network’s Institutional Design Architecture

The Canton Network was designed for institutional finance from the ground up. Digital Asset, the company that developed the Canton protocol and the Daml smart contract language, received investment from global institutions including JPMorgan, Citi, Goldman Sachs, and DTCC.

Daml: Authorization and Privacy Built Into the Language

In institutional finance, access control is not a peripheral requirement. It is the substance of the transaction itself. In bond issuance, if underwriter allocation data leaks, market prices move in advance. In repo, if collateral size is exposed, the counterparty loses negotiating leverage. Authorization is not an add-on to a transaction. It is part of the transaction.

The Canton Network uses Daml to define data permissions at the code level. When writing a contract, the same code specifies who is a signatory, who is an observer, and who is a controller authorized to execute specific actions. Business logic and privacy policy are not managed separately. The contract itself defines who can do what.

Canton Protocol: Consensus Validated Only by the Parties to a Transaction

If Daml defines authorization, the next question is how that authorization is enforced in actual transactions. Standard blockchains record every transaction identically across tens of thousands of nodes worldwide. If transaction data can be read through any node, the privacy defined earlier becomes meaningless.

Canton resolves this by limiting visibility and validation to the parties with a stake in the transaction.

• Sub-transaction Privacy: Within a single transaction, each party receives only the portion relevant to them. Transaction data is end-to-end encrypted, and decryption keys are delivered only to those with the appropriate permissions as defined by Daml.

• Proof-of-Stakeholder: The parties to a transaction are its validators. Third parties cannot see the data. False validation does not hold. If the transaction records of both sides do not match, the discrepancy is immediately surfaced. If either party rejects, the transaction does not proceed.

Those who should not see, neither see nor validate. Those who should see, validate only what they can see.

Network of Networks: An Internet-Like Architecture of Connected Subnets

Each institution has different authorization policies, governance structures, and fee models. There is no reason for one institution to adopt another’s rules wholesale. The Canton Network allows each participant to build subnets in the structure they require.

Participants are controlled via whitelist. Governance policy determines whether transaction approval rests with a single operator or a consortium majority. Fee structures, processing speed, and compliance check timing are all configured differently per subnet.

With multiple subnets, the question is how transactions between them are handled. A standard bridge locks assets on one side and mints new ones on the other. If a single set of custodial keys is compromised, the entire asset pool collapses. The combined losses from the Ronin, Wormhole, and Nomad hacks alone exceeded $1 billion. Canton does not move assets. It leaves assets in place on each subnet and updates ownership on both ledgers simultaneously.

Take the HSBC and BEA collateral transaction as an example. The bond issued by HSBC remains on the HSBC subnet. BEA’s repo application executes the transaction using that bond as collateral directly. HSBC validates the bond leg under its subnet rules; BEA validates the cash leg under its own. When both subnets send their approval signals, ownership on both ledgers updates simultaneously.

Global Synchronizer: Infrastructure That Synchronizes Transactions Without Seeing the Data

With multiple subnets, there needs to be infrastructure that determines the order of transactions between them. But if that infrastructure can read the transaction data, the entire privacy architecture collapses. A structure where data is hidden from the parties but visible to the operator exposes the most sensitive information to the widest possible audience.

The Global Synchronizer resolves this contradiction. It orders transactions without the authority to decrypt their contents. Like a postal service delivering sealed envelopes, it receives messages, assigns order, and delivers to the destination without knowing what is being transacted.

The validation structure operates in two layers.

1. Validators: Verify application-level transactions and see only the transactions in which they are a party.

2. Super Validators: Operate the Global Synchronizer and reach consensus on transaction ordering, but cannot see transaction data.

According to Canton Network data, Super Validators are restricted to identity-verified institutions and have expanded to more than 45 as of April 2026, keeping infrastructure operation and data access structurally separate.

CIP-56: The Standard That Assets Follow

If the preceding four components are infrastructure, CIP-56 is the ruleset that assets on top of that infrastructure must follow. Assets that do not conform to a standard are incompatible with wallets, exchanges, and payment applications. If compliance procedures such as KYC cannot be embedded within the standard, institutions must operate separate systems alongside.

CIP-56 is the interface standard defining the issuance and transfer of tokens on Canton. It is the Canton equivalent of Ethereum’s ERC-20, with three additions built for the institutional environment.

1. Privacy-preserving balance management: Balances and transaction history are visible only to authorized parties. Unlike ERC-20, wallet balances are not publicly exposed.

2. Multi-party transfer approval: A transfer is completed only after both the token issuer and the recipient provide approval. KYC and whitelisting are embedded within the token standard itself.

3. Native atomic DvP support: Assets and cash are exchanged simultaneously within a single transaction. In ERC-20, this requires a separate smart contract or DEX infrastructure.

Assets conforming to CIP-56 operate as-is across all compatible wallets, exchanges, and applications. Bitwave’s USDCx payments and the real-time onchain repo of U.S. Treasuries against USDC executed by Tradeweb in December 2025 were both built on CIP-56.

5. The Canton Network Expands Into Asia

Canton Network has spent the past several years building its institutional infrastructure base and establishing its presence in the United States and Europe through a growing body of real-world cases. That expansion is now extending into Asia.

Korea stands out for the pace of activity. Amendments to the Capital Markets Act and the Electronic Securities Act, establishing a legal framework for security token offerings (STOs), passed the National Assembly on January 15, 2026, as announced by the Financial Services Commission of Korea. Distributed ledgers are now formally recognized as electronic registration account books with legal effect, giving rights recorded on blockchain the same legal standing as those under existing electronic securities law. The amendments take effect in January 2027.

The government has also designated “digital asset ecosystem development” as one of the 123 national policy priorities under the Financial Services Commission’s mandate, and has signaled that it will move quickly to establish a legal framework for won-denominated stablecoins.

Institutions did not wait for the legislation to be finalized. Major brokerages including Mirae Asset, Korea Investment Securities, and NH Investment Securities have already completed system builds through STO consortia. Banks are forming custody alliances and positioning for leadership in the space.

Hanwha Investment & Securities has been among the most active on Canton. In its February 2026 recruitment drive for its RWA division, the firm’s job postings listed “experience with or understanding of Daml script development on Canton Network” as a preferred qualification for Web3 back-end roles, a signal that suggests growing internal capability development around Canton-related infrastructure.

Momentum accelerated further in June 2026. Shinhan Asset Management and Shinhan Securities had each signed separate memoranda of understanding with the Canton Foundation. Both entities will participate directly in Canton Network governance and work jointly to connect Korean financial products with overseas investors.

KB Securities joined shortly after, agreeing to a joint review with the Canton Foundation and blockchain infrastructure firm Wavebridge on how to apply distributed ledger infrastructure to domestic capital markets transactions. The stated objective is to issue and distribute products backed by domestic financial assets in global markets.

Parallel developments are visible across the rest of Asia. In Japan, JSCC, Nomura Holdings, and Mizuho Financial Group launched a joint tokenization proof-of-concept in April 2026 focused on using Japanese government bonds (JGBs) as collateral on Canton. In Hong Kong, HKFMI has integrated Canton technology into the Central Moneymarkets Unit (CMU) for government bond settlement. HKFMI operates as the settlement institution under the Hong Kong Monetary Authority, making this one of the first cases of Canton adoption at the level of a monetary authority. In Singapore, Hydra X has completed live validation by launching a structured product SVT on Canton within the MAS regulatory framework.

The regulatory scaffolding is taking shape, and institutions are already building on it.

6. How to Get Started

The market is already moving. Institutions considering entry need to answer two questions: what form participation will take, and how long each stage will require. Without a defined entry mode, resources scatter across competing priorities. Without a realistic timeline, decisions get deferred.

What Form of Participation?

The right starting point depends on where an institution stands today. There are five broad entry paths into Canton, arranged here in ascending order of complexity.

The choice of entry path follows from an institution’s current position. Starting directly with asset issuance is not a realistic first step. The natural entry point is node operation or foundation membership, which allows an institution to gain direct experience with Canton’s ecosystem and direction before layering on asset issuance, infrastructure integration, and eventually proprietary application development. These five options are not mutually exclusive alternatives. They are better understood as a cumulative architecture, where an institution begins where it can and builds toward a more complete presence over time.

How Long Does Each Stage Take?

The trajectory observed among overseas institutions, from initial review to operational stability, follows a broadly consistent pattern. Each phase takes no more than a year in most cases, and institutions that move quickly can advance to the next phase in as little as three months.

LSEG’s DiSH platform, for example, completed a POC on Canton with a consortium of Digital Asset and financial institutions before launching formally in January 2026. SBI Digital Asset Holdings, meanwhile, assumed a Super Validator role in July 2024 and secured Canton Foundation Premier membership at the same time, establishing itself as a core participant in the network.

Each phase must be completed in order, and no phase can be bypassed. The full progression typically takes about a year. Of all the phases, the first, assessment and learning, is the most important. While the stated goal of this phase is to evaluate Canton’s technical architecture and infrastructure design, the more fundamental work is internal.

An institution needs to determine which assets it intends to tokenize, which business units they sit in, and whether the internal decision-making structures are in place to act on that. Entering Phase 2 without answers to those questions tends to produce a return to Phase 1. Institutions considering a Canton entry should address these internal questions before anything else.

7. The Window Is Open

Thirty years ago, the internet reshaped capital markets infrastructure, and once that infrastructure was built, it did not change easily. The governance structures, token standards, and Super Validator rosters being established on the Canton Network today will form the backbone of the next generation of capital markets. Institutions that join while those standards are still being set will hold structural advantages that are difficult to replicate once the architecture has hardened.

The first step does not need to be large. Delegating a validator node, sending a developer through Daml certification, or committing to a one-to-three-month evaluation are all viable entry points. The world’s leading financial institutions have already established positions on the same infrastructure, and the network’s expansion into Asia is adding to the momentum.

In 1996, the institutions that moved early on internet infrastructure were not making a speculative bet. They were responding to evidence that the technology worked and that the cost of delay was rising. That same evidence exists today.

Leadership Insights

📥 Download Report

Disclaimer

This report was partially funded by Canton Network. It was independently produced by our researchers using credible sources. The findings, recommendations, and opinions are based on information available at publication time and may change without notice. We disclaim liability for any losses from using this report or its contents and do not warrant its accuracy or completeness. The information may differ from others’ views. This report is for informational purposes only and is not legal, business, investment, or tax advice. References to securities or digital assets are for illustration only, not investment advice or offers. This material is not intended for investors.

Terms of Usage

Tiger Research allows the fair use of its reports. ‘Fair use’ is a principle that broadly permits the use of specific content for public interest purposes, as long as it doesn’t harm the commercial value of the material. If the use aligns with the purpose of fair use, the reports can be utilized without prior permission. However, when citing Tiger Research’s reports, it is mandatory to 1) clearly state ‘Tiger Research’ as the source, 2) include the Tiger Research logo following brand guideline. If the material is to be restructured and published, separate negotiations are required. Unauthorized use of the reports may result in legal action

📥 Download Report

Summary

Crypto has crossed from experimentation into industry. The form that industry is taking is the Internet Capital Markets, or ICM: a structure in which asset issuance, trading, and settlement all complete on a single public blockchain.

Capital markets today still run on infrastructure designed before the internet. Even a simple stock transaction passes through clearinghouses and depositories, and settlement takes at least a day. The ICM removes that lag entirely, because assets move across a single ledger rather than through a chain of institutional records. It is the next stage of capital market architecture.

The United States is moving fastest to set the standard. Congress defined the legal status of stablecoins through the GENIUS Act, and in March 2026 the SEC and CFTC classified 16 assets, including Solana (SOL), as digital commodities, clearing much of the regulatory uncertainty that had been holding capital back. The pattern repeats: the jurisdiction that sets the standard sets the terms of the market, and that pattern is now playing out in the ICM.

Solana is the network where that shift is taking concrete form. It is accumulating both institutional case studies and regulatory design simultaneously. Major financial institutions, including J.P. Morgan, State Street, and Citi, have built cases on Solana. The Solana Policy Institute, established in Washington, DC, did not wait for rules to be finalized; it submitted the Project Open pilot framework directly to the SEC, building precedent rather than waiting for it.

As the standard consolidates in the United States, the window for Asian institutions narrows. The first-mover phase, in which every piece of infrastructure had to be designed from scratch, has already passed. The practical path now is to adopt proven infrastructure and regulatory references, reducing trial and error. For institutions whose home regulators are moving slowly, jurisdictions such as Singapore and the UAE, where frameworks are already in place, offer a route to engage with Solana’s validated model first.

The question of whether and on what timeline to engage remains a policy and risk judgment for each institution and its regulator. Among public chains, Solana has accumulated a significant number of institutional pilots and live transactions. This report does not benchmark it against private or permissioned ledgers.

📥 Download Report

1. Crypto: From Experiment to Industry

New technologies generally move through a consistent set of stages as they pass from experiment to industry, as the internet, fintech, and AI each illustrate.

1. Experimentation: a small group of developers and early users validate the technology in a regulatory vacuum.

2. Overheating: as the potential becomes widely known, capital floods in and cycles of mania and collapse repeat.

3. Regulatory intervention: once the market reaches scale, authorities step in to set institutional boundaries.

4. Industry formation: as regulatory risk and practical utility are confirmed, the technology combines with existing industries to form an industry of its own.

The internet, the most prominent of these technologies, passed through experimentation in the 1990s and the overheating of the dot-com bubble, then settled into today’s industry as regulation and standards took shape after the bubble burst. Fintech moved from the experiments and investment frenzy of early startups into mainstream finance as governments built electronic-banking and simple-payment regimes. AI has passed the peak of expectations around generative models and now sits in the intervention stage, where governments are drafting regulatory frameworks. Each follows the same path from experiment to industry, differing only in pace and form.

Crypto today sits between the third and fourth stages. After Bitcoin appeared, a small group of developers tested its use for payment and settlement (experimentation). Investors rushed in and out each time the potential became visible, as in the 2017 ICO boom and the 2021 DeFi wave (overheating). The 2022 collapse of FTX was both the peak and the turning point. Through repeated collapses, speculative demand was filtered out and real use cases were proven, and once the market reached systemic scale, US regulators turned toward formalization rather than neglect or crackdown (regulatory intervention).

Because crypto seeks to replace the core financial functions of settlement, payment, and issuance directly, it met friction with conventional financial institutions and took longer to be absorbed. Only now has crypto reached the stage between regulatory intervention and industry formation.

On the regulatory side, there has been notable progress in recent years. The US Congress passed the GENIUS Act, which defined the legal status of stablecoins, and in March 2026 the SEC and CFTC confirmed 16 assets, including SOL, as digital commodities. Much of the regulatory uncertainty that had blocked capital has lifted. Core measures that would govern the overall market structure, including the CLARITY Act, remain under discussion.

As the industry-formation stage begins, institutional adoption within the crypto landscape continues to increase. Asset managers are putting funds on-chain, and banks are settling funds on-chain. The tokenized real-world asset (RWA) market grew about 257% in 15 months, from $5.4 billion in early 2025 to $19.3 billion at the end of March 2026, and including stablecoins, on-chain assets reach roughly $300 billion (rwa.xyz, as of June 10, 2026).

This is not yet large enough to call a full-scale industry, but industry formation is beginning alongside the buildout of regulation.

2. The Future of the Crypto Industry: Internet Capital Markets (ICM)

The future toward which crypto is heading, now that it has entered the industry stage, is the reconstruction of the capital market itself. This future can be defined as Internet Capital Markets (ICM). It is a capital market in which the issuance, trading, and settlement of assets all take place on a single public blockchain.

Today’s capital market runs on a structure designed before the internet. Buying and selling a single share is a clear example. At the moment of execution, the asset and the cash do not change hands immediately. A clearinghouse stands between buyer and seller and absorbs the risk that one side fails to perform before settlement. In return, the clearinghouse requires margin from both sides, and that money is locked until settlement completes. In the US, the book transfer at the depository is only finalized on the business day after execution.

Because brokers, exchanges, clearinghouses, depositories, and custodians each keep their own separate ledgers, they must check those ledgers against one another every business day to reconcile them, and any discrepancy delays settlement. For cross-border trades, currency conversion and the depositories of each country are added, so settlement can stretch to T+3 or longer. This structure was designed for an era when counterparties could not be trusted, and that design is now itself a cost.

In Internet Capital Markets, code takes over the role the clearinghouse played. The buyer’s payment and the seller’s asset are placed into a smart contract at the same time, and the two transfers execute as a single transaction. If either side’s condition is not met, the entire transaction is canceled. A case where only the buyer’s payment leaves or only the asset transfers cannot occur technically. Because counterparty performance risk is removed at the level of code, no clearinghouse is needed to require margin. Because all participants share the same ledger in real time, there is no reconciliation between institutions. Execution and settlement complete together within seconds.

The actors driving this change are expanding from crypto startups to conventional financial institutions. The very institutions that earned revenue from the layered intermediation structure are now taking part. This movement reflects a pattern in which, at each tipping point, institutions that followed late paid higher costs or lost their leading position.

The shift to electronic trading in the 1990s is a clear example. Large institutions built on floor trading initially resisted electronic platforms such as Island ECN and Instinet, and only after these became the standard did they follow late, through acquisition and absorption. The fintech shift followed the same pattern. Only after digital banking had taken their customers did conventional banks launch their own apps or acquire fintech firms. Each time they faced the same choice, to design the new infrastructure and redefine their role, or to accept a structure designed by others. Infrastructure replacement that has passed the tipping point is hard to reverse, and institutions are moving because they know that cost.

This change is happening fastest in the US. As the center of global capital markets, the US has shown through history that whoever sets the standard in financial infrastructure designs the market.

After the dollar became the reserve currency under the 1944 Bretton Woods system, trade and financial transactions worldwide were priced and settled in dollars. CHIPS, designed by US private banks, processes more than $2.2 trillion in domestic and international payments each business day, and the NYSE and Nasdaq serve as the reference venues where global companies raise capital (The Clearing House, June 2026). The SEC’s disclosure standards became the reference for capital-market regimes in other countries. Whoever set the standard defined the terms of the market, and the rest had to follow their rules.

The US is working to create the same pattern in Internet Capital Markets, and that movement has already begun. It established regulatory standards first, and on top of them institutions have begun building cases. More than 99% of stablecoins worldwide are dollar-denominated, and the base unit of on-chain transactions is also the dollar (rwa.xyz, June 10, 2026).

In the RWA market, US Treasuries came on-chain earliest and in the greatest volume, and large global financial institutions began their on-chain practice earlier in the US. The range of assets eligible for tokenization, the settlement standards, and investor-protection requirements are all being decided first in the US.

Asia is aware of this change as well. Financial authorities in Singapore, Hong Kong, and Japan are building out digital-asset regulatory frameworks, and large institutions in the region have begun to consider adopting on-chain infrastructure. The US is clearly ahead, however, in the pace of regulatory clarity and the density of institutional practice references.

This is why Asian institutions are increasingly visiting the US in person. An institution that does not take part in the process of forming the standard ends up having to accept the finished standard. The change has become a question not of whether to act but of how quickly.

3. Internet Capital Markets in Practice: Solana

The network that shows a concrete implementation of US Internet Capital Markets is Solana. Within a single ecosystem, the building of institutional practice references and the design of the regulatory framework are proceeding at the same time.

Solana built its technical foundation in the retail market. It treated the network overload caused by concentrated DeFi demand in 2021 as an occasion to improve performance, and it proved its throughput and stability by handling the heavy traffic of the 2023 memecoin cycle.

In October 2025, when a market crash coincided with an AWS outage, fees on other chains rose to as much as $100 per transaction while Solana operated without interruption at $0.0013 per transaction. The infrastructure stability that institutional finance requires was secured first through stress tests in the retail environment.

In 2025, Solana declared “building Internet Capital Markets” as its official strategy and shifted its focus to institutional payments and asset tokenization. The Token-2022 standard introduced for this purpose embeds seizure, freezing, allowlist management, and confidential-balance functions as code in the token itself. An issuer can implement compliance requirements inside the token without going through an external system. It resolves finance’s essential requirements for eligibility to hold and trade assets at the protocol layer.

On this infrastructure, US financial institutions carried out working transactions. Seven large institutions, J.P. Morgan, State Street, Citi, Franklin Templeton, Visa, PayPal, and Western Union, have initiated PoC or have executed working transactions on Solana. This includes three of the eight US global systemically important banks (G-SIBs).

At the same time, Solana made its participation in regulatory design concrete. The Solana Policy Institute (SPI), founded in Washington, DC, in spring 2025, recruited the former CEO of the DeFi Education Fund and the former CEO of the Blockchain Association and is carrying out policy work.

Notably, instead of waiting for legislation to pass and reacting afterward, SPI chose to submit a pilot framework called Project Open directly to the US Securities and Exchange Commission (SEC). The strategy is to propose a regulatory precedent first and thereby advance both business diversification and the setting of regulation at once.

Solana is thus pursuing technical stability, the building of working cases by large institutions, and the setting of regulatory standards at the same time within a single ecosystem. This is why Solana is identified as core infrastructure when reading the current structure and the future regulatory direction of US Internet Capital Markets.

4. Institutions on Solana: Sector Case Analysis

Institutional engagement with Solana-based Internet Capital Markets is developing across multiple fronts, though not all participants share the same objective. Entry strategies vary considerably depending on each institution’s strategic priorities and operating constraints. Making sense of this layered activity requires an analytical framework built around two core axes.

First axis: Regulatory posture

• Compliance-Driven: Institutions in this category work within established regulatory frameworks, accepting existing legal guidelines to achieve capital efficiency quickly. J.P. Morgan’s same-day settlement of commercial paper is representative.

• Frontier-Defining: Institutions in this category operate in areas where clear rules do not yet exist, encoding compliance requirements directly into smart contracts through programmable compliance and establishing new precedent in the process. Orca’s permissioned pool illustrates this approach.

Second axis: Depth of value chain integration

• Wrapper: The entry-level stage, in which existing financial infrastructure remains in place and the token functions as a simple certificate of record.

• Native: The advanced stage, in which issuance, clearing, and settlement all complete on a single ledger. Intermediary structures are replaced by smart contracts, enabling T+0 settlement and eliminating counterparty performance risk.

Together, these two axes form a matrix that provides a clear reference point for assessing where institutions stand in their on-chain positioning. This report maps that framework across four functional areas of the capital markets to examine which cost structures and constraints of conventional infrastructure each institution has addressed, and what strategic conclusions follow from those choices.

The four sectors are: 1) banking and capital markets, 2) payments and stablecoins, 3) real-world asset tokenization (RWA), and 4) infrastructure buildout.

4.1 Banking and Capital Markets

The banking and capital markets sector covers bond issuance, trade finance, and treasury management. It is the set of processes by which institutions raise funds, send and receive trade payments, and put idle capital to work. It is a core revenue source for conventional financial institutions and the area where the cost savings from the shift to Internet Capital Markets appear earliest and most directly.

All three areas in this sector share the same critical problem. There is a time gap between the moment a trade is executed and the moment the funds actually move, that is, settlement.

• Bond issuance: completing an issuance requires the arranger, clearinghouse, depository, and custodian each to record their own ledgers separately and then cross-check them afterward, a complex manual process.

• Trade finance: processing a single bill of exchange consumes days to weeks before funds are disbursed, as the issuer, bank, guarantor, and payee verify the ledger in sequence.

• Treasury management: large idle funds held by an institution stay locked in the system, unable to convert into yield-bearing assets outside standard business hours, which is why liquidity freezes at night and on weekends.

In a high-rate environment, this settlement delay creates a large opportunity cost by tying up funds across the capital market. During a one-day settlement gap (T+1), substantial funds sit idle in the infrastructure and cannot move.

By our analysis, the cost of capital left idle because of this delay reaches approximately $32 billion a year in the US Treasury market alone, and widening the view to the entire US fixed-income market, the annual opportunity cost exceeds $45 billion. In effect, the speed limits of the existing financial system impose large hidden costs on market participants.

On Internet Capital Markets infrastructure, this chronic time gap disappears. This is due to atomic settlement, known as delivery versus payment (DvP), in which the asset transfer and the payment are bundled into one transaction and processed in real time. Because if one side of the trade is not performed the other side does not execute either, the clearinghouse that absorbed performance risk in the middle is no longer needed, and the reconciliation process that each institution ran separately disappears. As a result, execution and clearing complete within seconds (T+0).

State Street x Galaxy: On-Chain Treasury Management (SWEEP)

Launched on Solana on May 5, 2026, the State Street Galaxy On-chain Liquidity Sweep Fund (SWEEP) is an on-chain fund for institutional investors that takes in stablecoins (PYUSD, USDC) or fiat currency and invests in safe assets such as short-term US Treasuries to generate yield. Leading institutions from conventional finance and the Web3 ecosystem established a structure of separated custody and operation based on their respective expertise, raising reliability. The specific division of roles is as follows.

• State Street: handles custody of conventional assets such as short-term US Treasuries and fund administration, bringing established asset-management capability to the on-chain environment.

• Galaxy Digital: as a financial firm specializing in digital assets, leads the fund’s issuance and the structuring of on-chain liquidity.

• Anchorage Digital: as a regulated digital-asset custodian, is responsible for the secure, separated custody of on-chain assets, namely stablecoins and the issued tokens.

As its name shows, the fund draws on the sweep account concept from conventional finance. A sweep account is a financial service that automatically invests a company’s or institution’s funds in short-term bonds or MMFs to earn yield once the funds are deposited. SWEEP implements this delegated treasury function as an on-chain fund on the blockchain, supporting institutions’ advanced treasury management.

It is a new opportunity in particular for Web3 foundations that hold large amounts of stablecoins. Under existing infrastructure, using conventional financial services required converting stablecoins into dollars first before subscribing, which incurred friction costs in the form of conversion and transfer fees and unnecessary time delay.

In a future macro environment where the global stablecoin supply is expected to expand further, SWEEP enables direct deposits into and withdrawals from a Treasury-yield asset from an institution’s wallet, with issuer-controlled eligibility enforced on-chain.

Treasury management is of course possible through Treasury-tokenization products such as BlackRock’s BUIDL or Franklin Templeton’s BENJI, but simply investing in a single asset and automated treasury management, in which the system manages the funds on its own, differ clearly in capital efficiency. SWEEP operates in three stages.

• Stage 1, subscriptions: around the clock, when an investor deposits stablecoins (PYUSD, USDC) from an on-chain wallet or transfers dollars, SWEEP tokens are issued in proportion to the value at that moment.

• Stage 2, asset allocation: most of the deposits are invested in safe assets such as short-term US Treasuries to produce steady yield. At the same time, a set portion is held as a liquidity buffer in stablecoins so the fund can meet redemption requests at any time, with State Street holding the conventional assets and Anchorage Digital holding the on-chain assets in separated custody.

• Stage 3, DeFi utilization: the issued SWEEP tokens are used as collateral or lending assets in external DeFi protocols to mobilize capital further. The specific uses and synergies here will diversify with how the connected DeFi ecosystem expands.

As an example, Ondo Finance’s flagship fund OUSG made an anchor investment of approximately $200 million in SWEEP at launch, representing around 26% of its TVL at the time (State Street IR, December 2025). This commitment reflects confidence in the asset’s reliability as an on-chain cash management product, and as that utility becomes more firmly established, synergies within the ecosystem are likely to broaden.

The key point is that, on Solana, this is not merely a proof of concept (PoC) but a commercial-proof stage in which real, large-scale capital is moving. Asian institutions, many of which remain at the pilot stage, can treat this as a live-operation reference point for the next-generation infrastructure they are building.

For such a proven system to operate, however, the regulatory groundwork must come first. In the end, what matters is not a technology race but the pace at which regulation is formalized. In Asia, the timing of an equivalent product depends on when each jurisdiction establishes the legal basis for locally regulated stablecoins and on-chain Treasury management.

Citi x PwC: Tokenizing Trade Finance (Bill of Exchange)

Existing trade finance has kept a low-efficiency structure in which funds take days to weeks to be disbursed, passing through extensive paper documentation and multiple layers of intermediaries. The time delay and intermediary fees in this process have been a main drag on companies’ asset productivity and a major obstacle to gaining visibility into the cash flow that disbursement depends on.

The bill of exchange, central to international trade, is a security through which an exporter demands payment from an importer and a key credit-settlement instrument. In effect, after shipping goods, the exporter issues a document to the importer specifying a payment deadline. Because the exporter can present this document to a bank and borrow against it before maturity, it serves as one of the most important means of securing trade financing. Reducing the time it takes to process this bill of exchange is therefore central to corporate cash-flow management.

Under the current paper-based system, however, a physical time gap arises at every step as the bill moves back and forth and the bank verifies it before paying out, so funds inevitably get tied up. If this bill of exchange could be verified and circulated instantly on a digital ledger, a company could secure the cash it needs in real time without waiting.

To resolve this structural capital friction and test the possibility of supplying real-time liquidity across the supply chain, Citi worked with PwC and Solana to complete an internal proof of concept (PoC) that converts a conventional bill of exchange into a tokenized digital asset. The roles of the participating institutions are as follows.

• Citi: led the project and designed and ran the full on-chain lifecycle of the bill of exchange (issuance, financing, circulation, and settlement) in a simulation environment.

• PwC: as a collaborating partner, supported the project’s simulation process throughout.

In the simulation environment built on this collaboration, the full lifecycle of the bill of exchange is automated through smart contracts on Solana rails. By streamlining the complex conventional process on-chain, settlement time that previously took days was reduced to minutes, and the cost of manual reconciliation was recorded at zero, according to the participants.

The case is significant for demonstrating that the bill-of-exchange settlement cycle, the oldest bottleneck in trade finance, can be shortened to minutes and the manual reconciliation process removed. It is a key indicator of how far tokenizing off-chain assets can raise the liquidity of corporate treasury assets and the efficiency of treasury management.

Because this project is at the stage of an internal PoC in a simulation environment, the move to actual commercial operation will likely take time.

The structure carries strong implications for Asian finance, where global trade hubs are concentrated. For regional institutions preparing to adopt next-generation supply-chain finance and trade capital markets, the technical results of this PoC and its ledger-integration mechanism will serve as a concrete reference for how to build on-chain infrastructure.

J.P. Morgan x Galaxy: Issuing Commercial Paper (USCP)

US commercial paper (USCP) is the most widely used instrument for companies raising short-term operating funds. The existing issuance and trading and liquidity infrastructure carried a structural inefficiency. Because they had to pass through multiple intermediaries such as clearinghouses and custodians, the funds arriving and the books matching, that is, settlement and reconciliation, normally took one to two days (T+1 to T+2).

To resolve this friction, in December 2025 J.P. Morgan arranged a $50 million issuance of US commercial paper on the Solana public blockchain. This was not a simple simulation (PoC) but among the first live debt-security transactions on a public blockchain, completed by combining real institutional capital with stablecoin (USDC) settlement. The division of roles among participants was clear, as follows.

• J.P. Morgan (arranger): as arranger, created the USCP tokens directly on the Solana blockchain and oversaw the atomic settlement of the primary issuance.

• Galaxy (issuer and structuring agent): the parent, Galaxy Digital Holdings LP, served as the actual issuer of the paper, while its investment-banking affiliate, Galaxy Digital Partners LLC, acted as structuring agent, keeping the two roles clearly separated.

• Coinbase and Franklin Templeton (buyers and infrastructure support): Coinbase and Franklin Templeton stepped in as lead investors and buyers. Coinbase in particular provided private-key custody and wallet services for the newly issued USCP tokens and handled the USDC on/off-ramp infrastructure.

By combining this stablecoin payment network with on-chain atomic settlement (DvP), J.P. Morgan was able to turn a corporate funding cycle that took days on the existing financial network into an immediate, real-time settlement system.

• Stage 1, token creation: following the terms designed by the structuring agent (Galaxy Digital Partners LLC), the arranger J.P. Morgan created the on-chain USCP tokens directly on the Solana blockchain.

• Stage 2, funding: the lead investor Coinbase and the buyer Franklin Templeton sourced the stablecoin (USDC) issued by Circle to pay for the paper and prepare settlement. Future redemption payments are also made in USDC.

• Stage 3, custody and infrastructure: Coinbase Institutional provided private-key custody and wallet services for the newly issued USCP tokens and handled the USDC on/off-ramp infrastructure essential to live settlement.

• Stage 4, on-chain atomic settlement: under J.P. Morgan’s arrangement, the delivery of the USCP tokens and the payment of USDC were processed as atomic settlement (DvP). The clearing process that normally took T+1 to T+2 through multiple intermediaries completed instantly on-chain.

Unlike Citi’s trade-finance PoC discussed earlier, this case carries practical weight because it was a live transaction that completed the entire process, from issuance to redemption, in a real market with real institutional capital. Together with the earlier on-chain treasury-management case (SWEEP), the completion of this live transaction shows directly that bond issuance, a core function of conventional capital markets, has entered commercial operation through on-chain atomic settlement (DvP) without passing through the complex existing clearing system. Because it goes beyond merely tokenizing an asset and connects the raising and settlement of real capital into one flow, this case is a representative example of Internet Capital Markets and will be a key benchmark for Asian financial institutions preparing the next step.

4.2 Payments and Stablecoins

The payments and stablecoins sector is defined as the financial-infrastructure area that covers cross-border remittance, business-to-business settlement, and consumer payments. It refers to the set of processes by which individuals send money abroad, companies and institutions pay overseas counterparties, and consumers buy goods.

This sector is a major revenue source for conventional financial infrastructure and also the area where structural inefficiencies such as speed delays and intermediary fees accumulate most widely in the daily life of individuals and companies. The introduction of blockchain and stablecoins centers on reducing this multilayered intermediation and building a real-time settlement system.

• Cross-border remittance bottleneck: the adoption of Swift GPI (Global Payment Innovation), the global standard network that improved the processing speed and tracking visibility of overseas transfers, has cut transfers between large banks to within a few hours, but transfers that route through small and midsize institutions or settle in exotic currencies still have to pass through a multilayered correspondent-bank network. The intermediary fees that arise here, in the range of $30 to $100 per transaction, and the intermittent delays from AML/CFT compliance review are a practical bottleneck that undermines the predictability of cross-border fund movement.

• Fragmented liquidity in corporate settlement: to manage settlement-timing differences across currencies and foreign-exchange (FX) volatility, global companies must keep local-currency funds distributed at all times in the deposit accounts (nostro accounts) of correspondent banks in each country. This is not a shortcoming of payment technology but a structural limit of the established banking system, and in a high-rate macro environment it lowers capital efficiency by leaving large amounts of capital idle and earning no interest.

• Limits of payment availability: retail payment networks (Visa, Mastercard) appear to run in real time 24/7, but that is limited to the front-end authorization step. The final clearing and settlement, where actual funds move between financial institutions, are processed only under the established banks’ business-day (nine-to-five) schedule, so during the two-to-three-day gap on weekend or holiday payments, merchants and financial firms bear the liquidity shortfall and credit risk entirely.

In a high-rate macro environment, these structural time gaps in the conventional financial network deepen liquidity isolation and opportunity cost. Solana-based on-chain infrastructure, by contrast, combines a single distributed ledger with stablecoins to achieve real-time settlement without intermediaries, minimizing capital friction. The concrete commercial cases that established finance and big-tech firms have built on these rails are as follows.

Western Union: Global Remittance (USDPT)

On May 4, 2026, the global remittance company Western Union launched USDPT (US Dollar Payment Token), a payment stablecoin pegged to the US dollar. It is a proof case that aims to solve, on Solana public-blockchain rails, the chronic settlement gap of the existing correspondent-banking system and the problem of deposits frozen to guard against FX risk. The existing correspondent-banking system works as a multilayered structure in which an international transfer starts at the originating bank, passes through one or two correspondent banks, and then reaches the receiving bank.

The problem is that each intermediary bank processes only within its own system and business hours, so settlement normally takes one to two business days. On weekends and holidays, all processing stops. To respond immediately to real-time payout requests in each base country, the company therefore has to lock up dollars in local bank accounts in advance, sized to forecast demand.

These pre-funded nostro account balances sit locked, earning nothing, until a transfer occurs. For a company like Western Union, which over 175 years has processed about $150 billion in remittances a year across more than 200 countries, this cost of stuck liquidity has been structurally hard to resolve.

• Western Union: oversees the project and integrates its own agent-network clearing system with the digital-asset network infrastructure.

• Anchorage Digital Bank N.A.: as a custodian and issuer chartered by the US Office of the Comptroller of the Currency (OCC), handles OCC-chartered, 1:1 USD-backed issuance of USDPT, with KYC/eligibility enforced on-chain.

• Crossmint: as the infrastructure partner, supplies the technical infrastructure for issuing and distributing USDPT through an enterprise minting API and distributed-custody rails.

Western Union’s adoption of USDPT fundamentally redesigns the settlement process to break through these bottlenecks. Adopting the Solana public blockchain and USDPT shifts the settlement paradigm from a structure that stockpiles funds in advance to one that supplies them in real time when needed.

• Stage 1, real-time demand detection: when an agent’s cash inventory in a particular country, for example an emerging market where transfer demand spikes on weekends, falls below a threshold, a real-time alert is generated in the head-office treasury operations system.

• Stage 2, high-speed on-chain settlement: the US head-office treasury team immediately sends USDPT issued through Anchorage Digital to that local agent’s institutional on-chain wallet. Regardless of weekend, night, or holiday, this reaches final settlement quickly on the Solana network on the basis of a 0.4-second block time.

• Stage 3, freedom from business-hour dependence: even on a weekend when banks are closed, the local agent receives the dollar value (USDPT) sent by the head office on-chain in real time and reflects it on its own books.

With this mechanism in place, Western Union can recover its pre-funded buffer, which runs to hundreds of millions of dollars, down to a minimal level, at a scale fitting its operations.

Western Union is also pursuing expansion as a next step. It is building a Digital Asset Network (DAN) that connects the crypto ecosystem with its offline agent network so that USDPT can be cashed out into local fiat instantly, and it plans to launch a B2C service, Stable by Western Union, that lets ordinary consumers pay with stablecoins at physical merchants, rolling it out to more than 40 countries within 2026 to connect even the frontline retail touchpoint onto a single rail.

The case shows that the Solana public blockchain can function beyond a simple asset-trading network as core payment infrastructure for mainstream finance.

Fiserv: A Stablecoin for Financial Institutions (FIUSD)

On June 23, 2025, the global financial-technology company Fiserv announced plans to launch FIUSD, a white-label stablecoin for financial institutions that member institutions can build into their own payment and remittance services, along with a digital-asset platform.

Under a white-label structure, Fiserv supplies the technical infrastructure and dollar-backing system, and each financial institution issues and offers the stablecoin under its own brand. A bank can offer its own digital dollar to customers without building separate blockchain infrastructure.

The platform runs on Solana, with a formal launch scheduled for July 2026. The roles of the participating institutions are as follows.

• Fiserv: leads the platform and provides the infrastructure, running it through its own global payment network and banking solutions.

• Paxos: supports enterprise-scale technical infrastructure and handles the issuance and management of FIUSD under Paxos’s regulated framework.

• Circle: provides stablecoin technical infrastructure and supports interoperability with other major stablecoin ecosystems.

There is already an adoption case. The Bank of North Dakota, the only state-owned bank in the US, announced it will launch “Roughrider Coin” on the FIUSD platform. It works as follows.

• Core processing and orchestration: Fiserv’s new digital-asset platform uses its own Finxact core-processing platform as the base ledger and connects to cloud-native orchestration, payment, and banking platforms, forming an interoperable end-to-end fiat and digital ecosystem.

• Network scale: Fiserv’s multisided network spans about 10,000 financial-institution clients and 6 million merchants and processes 90 billion transactions a year. Fiserv plans to offer FIUSD to its member financial-institution clients at no extra cost by using existing technology.

• Risk and capital efficiency: member institutions use Fiserv’s existing customer-facing banking platform and receive compliance support through built-in functions such as fraud monitoring, risk management, and settlement control. Fiserv is also exploring the use of deposit tokens, which keep the benefits of a stablecoin while offering banks a more capital-friendly structure.

This is a structure that Asian financial institutions can readily learn from. In many regions, regulation currently makes issuing stablecoins difficult or entry impractical for now. This structure, in which an infrastructure provider supplies a white-label platform on Solana and a financial institution issues a digital dollar under its own brand, can be transplanted immediately once the regulatory environment is in place.

For Korea specifically, the white-label model maps onto the ongoing debate over whether banks or non-banks may issue stablecoins; it becomes viable once the FSC sets that boundary and establishes won-denomination rules.

4.3 Real-World Asset Tokenization (RWA)

The real-world asset tokenization sector covers Treasuries, private credit, money market funds (MMFs), listed stocks, and unlisted securities/commodities. It is the set of processes that converts financial assets traded in conventional markets into tokens on a blockchain for issuance, circulation, and settlement. Where the previous two sectors dealt with the speed at which funds move, this sector deals with how the asset itself exists.

The structural problem in this sector arises from infrastructure that is fragmented by asset type. For the same investor to access Treasuries, private credit, listed stocks, and unlisted securities/commodities, each asset class requires going through a separate intermediary, account, and settlement system.

• Limited access: private credit and private equity have run mainly for institutions and ultra-high-net-worth individuals because of high minimum investments and long lockups, which structurally blocks entry by ordinary investors.

• No secondary market: for illiquid assets, there is effectively no secondary market to trade in after issuance. Investors are tied to the asset until maturity, and price discovery barely functions.

• Disconnected settlement: because settlement cycles and infrastructure differ by asset class, real-time portfolio-level fund management is impossible. To invest the proceeds from selling Treasuries into private credit, an investor has to pass through two separate settlement systems in sequence.

Tokenization resolves this fragmentation on a single ledger. Once an asset exists as a token, issuance, circulation, and settlement are all handled on the same on-chain infrastructure. A private credit fund interest, for example, becomes a token that can circulate around the clock, and an MMF income right becomes an asset transferable between wallets. When an investor rebalances a portfolio across different asset classes, what is required is not opening a separate account but a single on-chain transaction.

Orca x Streamex: Regulated RWA Distribution (GLDY)

The tokenized listed-stock market has long carried a disconnect between issuance and distribution. Listed-stock-type tokenized assets had secondary-trading paths open through multiple exchanges, as with Kraken’s xStocks, but non-stock tokenized securities such as bonds, commodities, and private loans lacked issuer-controlled, eligibility-gated liquidity infrastructure after issuance. Issuance technology advanced, but distribution infrastructure did not keep up.

In response, in May 2026, the leading Solana on-chain infrastructure provider Orca launched permissionless automated market maker (AMM) infrastructure that permits issuers to create customizable pools based on the requirements of its regulated assets. The Nasdaq-listed company Streamex was the inaugural issuer to utilize this bespoke solution for regulated assets by using it to launch secondary liquidity of its GLDY token, yield-bearing token security linked to physical gold. Only investors who meet Streamex’s eligibility requirements (i.e., accredited investor status) may provide liquidity or trade GLDY.

• Streamex: issues the GLDY token, performs KYC and accredited-investor verification, and manages whitelist onboarding. It is a Nasdaq-listed digital-asset infrastructure company specializing in commodity tokenization.

• Orca: provides the permissionless automated market maker trading infrastructure on which issuers like Streamex can create ring-fenced permissioned pools for their regulated assets. Operating since February 2021 as Solana’s longest-running DEX, it has processed more than $500 billion in cumulative volume and completed multiple independent security audits.

• Monetary Metals: manages the underlying assets, generating returns backed by physical gold for GLDY holders through gold lease contracts.

The core of this business lies not in the type of asset but in how trading is controlled. It is a structure that enforces compliance requirements through code rather than a human review process. The GLDY pool operates in three stages.

1. Default freeze and KYC verification: every investor wallet starts frozen and unable to trade by default. Only a wallet that passes Streamex’s KYC verification is automatically unfrozen at the on-chain access-control layer.

2. Access unlock and trading: GLDY trades peer-to-peer in real time within the Orca AMM pool only between verified wallets. No broker or reviewer intervenes.

3. Around-the-clock distribution and yield payment: unlike conventional gold investment products tied to exchange hours, GLDY trades 24/7/365 on Solana. The returns from Monetary Metals’ gold lease contracts are paid directly to GLDY holders.

The token-level freeze and unfreeze control works the same way regardless of asset type, whether stocks, bonds, or commodities. GLDY demonstrated this structure first for a gold security, but the same approach can apply directly to any regulated asset, including Treasuries, corporate bonds, and private credit. This is why Orca proposed the structure as the trading infrastructure for the Project Open pilot framework, since it can serve as an infrastructure layer combined with regulation. It is an example of what kind of business is demonstrably possible beyond issuance.

Apollo: Private Credit Tokenization (ACRED)

The conventional private-lending market, despite high returns, has had two structural barriers. High minimum investments left it open only to institutions and ultra-high-net-worth individuals, and once invested, capital was tied to the asset until maturity, an illiquidity problem.

The global private-equity firm Apollo began an effort to resolve these constraints on-chain in January 2025. It issued ACRED, a tokenized feeder fund based on its Apollo Diversified Credit Fund (ADCF), through Securitize. ACRED is a restricted security for accredited investors only, issued on multiple chains including Solana. In the Solana ecosystem, four parties combine to build an institution-only on-chain leverage structure.

• Securitize: the issuance platform for ACRED, handling accredited-investor KYC and AML verification and the sACRED wrapping structure. Because ACRED is a conventional fund interest that cannot be used directly in DeFi, a structure was introduced to convert it into a smart-contract-based wrapper token, sACRED. Accredited-investor verification is enforced by smart contract during the conversion as well.

• Solana-based on-chain lending protocol: operates an institution-only lending pool that takes sACRED as collateral and provides a stablecoin borrowing facility.

• Gauntlet: manages the risk of the leverage strategy with an automated engine, adjusting borrowing size in real time to market rates and risk limits.

• RedStone: supplies real-time ACRED price data through an oracle, providing the technical basis for collateral valuation and liquidation decisions.

The working process, with a minimum entry of $50,000, runs as follows.

1. Tokenization and wrapping: when an accredited investor buys ACRED, they hold a token equivalent to a conventional fund interest. To use it in DeFi, they convert it into sACRED through Securitize’s smart contract. sACRED transfers are allowed only between verified, accredited wallets.

2. Collateralized borrowing and leverage: an investor deposits sACRED into the institution-only lending pool and borrows stablecoins worth about 60% of the collateral value, at a borrowing cost of roughly 3% to 4%. Using those stablecoins to buy back ACRED, convert it to sACRED again, and re-deposit it, repeating the loop, raises effective leverage to around 2.5x. A base return of about 7.3% to 7.5% (against the official fund return of 7.36%) is amplified to roughly 12% on a conservative view, and up to about 16% on Securitize’s projected looping return.

3. Real-time collateral management: the RedStone oracle supplies real-time ACRED price data, and Gauntlet uses it to decide liquidation conditions and rebalancing timing automatically. Setting and releasing collateral is processed on Solana within seconds, at a fee of less than $0.001 per transaction.

For this leverage structure to hold, setting and releasing collateral must be repeated quickly and cheaply. On infrastructure where settlement takes days or each turn carries a high fee, the same structure can hardly work. Solana’s throughput meets the conditions that support the economics of this strategy.

This is not a risk-free return, of course. If borrowing rates rise, the margin narrows. The limited liquidity of quarterly-only redemption, ACRED’s market cap of around $100 million (as of early 2026), and the liquidation risk tied to oracle-reflected prices all have to be weighed.

For Asian institutions, this case is about asset access. Asset classes that institutions in the region have traditionally found hard to access, such as private credit, infrastructure funds, and real estate funds, can be opened up structurally through tokenization and on-chain mobilization. What ACRED proved is that a structure for converting private-lending fund interests into on-chain collateral and turning them over in real time actually works.

Figure Technology Solutions: Mobilizing Home Equity Lines of Credit (HELOC)

Figure Technology Solutions (Figure) is the largest non-bank issuer of home equity lines of credit (HELOC) in the US. As of December 2025, it holds more than $19 billion in cumulative on-chain loans. It is a mainstream fintech player that has repeatedly issued AAA-rated securitization tranches underwritten by Goldman Sachs, J.P. Morgan, Jefferies, and Barclays.

Figure originally tokenized and mobilized HELOCs on its own appchain, Provenance. A HELOC (home equity line of credit) is a US home-secured credit product that uses home equity as collateral.

Figure’s business works like this. It extends loans secured by homes, records those loan claims on a blockchain, and once enough accumulate, bundles and sells them to institutional investors. Because it sells rather than holds the loans for long, it can re-lend with the proceeds it recovers.

Figure cycles its capital the same way. Newly issued HELOC claims are gathered into an on-chain pool called Demo Prime, where institutional investors supply stablecoins and earn interest. After about 42 days, the claims in the pool are bundled into AAA-rated securitization products and sold to Wall Street asset managers, pension funds, insurers, and banks. When the sale proceeds return to the pool, new claims fill it and the cycle repeats. The faster the turnover, the higher the capital efficiency.

The problem was that this structure was confined within Provenance, a closed chain. Despite being high-credit-quality collateral, it was cut off from the DeFi ecosystem, which limited how far capital turnover could rise. In December 2025, Figure launched the PRIME token to address the capital-turnover problem. The structure connects Provenance’s loan income rights to Solana to absorb the liquidity and leverage infrastructure of the public DeFi ecosystem.

This cross-chain expansion works through a combination of the following infrastructure providers.

• Provenance: handles the on-chain tokenization of the underlying HELOCs and the operation of the Demo Prime pool. The full process from loan origination through collateral management to securitization runs on the Provenance chain.

• Hastra: a yield-distribution protocol incubated jointly by Figure and the Provenance Foundation. It serves as a liquidity layer that connects the yield generated in Provenance’s Demo Prime to the Solana DeFi ecosystem, with Chainlink CCIP ensuring cross-chain data integrity.

• Kamino: the exclusive on-chain lending partner that builds the lending pool and leverage strategy for the PRIME token on Solana. It runs a PRIME/USDC isolated market and supports up to 9x leverage (Multiply).

• Orca: the primary spot venue for the PRIME token on Solana, running the PRIME/PYUSD pools where users and institutions provide and access liquidity. While Kamino covers lending and leverage, Orca supplies the AMM depth that makes PRIME tradable and keeps its on-chain price efficient.

The working capital-expansion process is structured as follows.

1. Tokenization: Figure tokenizes the home-equity loans on the Provenance chain and designs the PRIME token based on the income rights they generate.

2. Bridging: Chainlink CCIP and the Hastra protocol bridge the value and data of assets locked on Provenance safely to Solana.

3. Collateralization: the PRIME token, once settled on Solana, is listed on the Kamino lending protocol, where it functions as an active asset that ordinary users and institutions can use as collateral or to supply liquidity.

Figure chose Solana not out of technical preference but for capital efficiency. Provenance is a chain proven in institutional trust, but within its closed ecosystem there was no liquidity infrastructure to build leverage on. The net spread of the 9% Demo Prime yield minus Kamino’s 6% borrowing cost is amplified by the leverage multiple. Unless setting and releasing collateral is processed on Solana within seconds and at less than $0.001 per transaction, the economics of this strategy do not hold.

Even though Figure already had its own chain, it chose Solana to expand liquidity. The lesson is that building your own infrastructure is one option, but connection matters just as much.

4.4 Infrastructure Diffusion

Where the previous three sectors dealt with the transition of individual areas, this sector deals with the point where those transitions converge. Banks issuing bonds on-chain, remittance companies settling in stablecoins, and asset managers tokenizing funds are not proceeding separately but happening at the same time on the same infrastructure.

The diffusion divides into three layers.

1. Issuance layer: PayPal, Fiserv, Circle, and Tether issue stablecoins or operate issuance infrastructure on Solana. This is not a single company’s experiment but a structure where competing issuers coexist on the same network.

2. Settlement layer: Visa extended stablecoin settlement for merchant acquirers to Solana, and Worldpay moved merchant transaction settlement onto the Solana network. YouTube adopted Solana-based PYUSD as a means of paying US creators. Companies that own settlement networks are replacing parts of those networks with on-chain rails.

3. Touchpoint layer: SoFi, a US federally chartered bank, lets its 14.7 million customers buy Solana directly from their bank accounts and has begun operating its bank-issued stablecoin, SoFiUSD, on Solana. The institutional exchange Bullish adopted a Solana-based stablecoin as its main settlement rail across 50 jurisdictions and processed $1.15 billion in IPO proceeds on the Solana network.

When issuance, settlement, and touchpoint operate on the same network, network effects arise. A token issued by a bank is settled by a payment company, and the consumer holds that asset in a bank app, forming a loop. The more participants, the greater the utility for each. The formation of Internet Capital Markets accelerates the moment this loop passes its tipping point.

SoFi: Integrating Retail and Corporate Finance

SoFi operates around the listed fintech holding company SoFi Technologies, under which sits SoFi Bank, N.A., a federally chartered bank supervised by the OCC. With 14.7 million members and $53.7 billion in total assets (as of Q1 2026), it started in student-loan refinancing and grew into a full-stack retail finance platform that offers deposits, lending, investing, and insurance in a single app.

In November 2025, SoFi became the first federally chartered bank to launch crypto trading for consumers. It allows customers to buy, sell, and hold 28 digital assets, including BTC, ETH, and SOL, directly from a bank account.

SoFi supports crypto trading directly to prevent the user attrition that comes from poor access. Under existing bank infrastructure, digital assets were accessible only through the separate path of a standalone exchange. To buy SOL, a customer had to leave the SoFi app and sign up for a separate platform such as Coinbase, Kraken, or Robinhood. That was the point where the finance app lost its customer touchpoint to the outside.

SoFi aims to bring that touchpoint back inside the bank app. Supporting crypto trading absorbs digital-asset access into the bank app.

1. In-app purchase: customers can buy and hold digital assets, including SOL, directly within the SoFi app.

2. Inbound integration: customers receive a Solana network deposit address and can move assets from external wallets into the SoFi app.

3. Issuing its own on-chain dollar (SoFiUSD): SoFi builds its own digital-dollar rail through its bank-issued stablecoin, SoFiUSD.

4. Enterprise expansion: through Big Business Banking, SoFi extends this structure into payment, settlement, and treasury infrastructure for corporate clients.

SoFi began issuing SoFiUSD in Q1 2026 and expanded it into an in-app customer product in May. It is the first case of a federally chartered bank under OCC supervision placing its own liabilities on the Solana public blockchain in the form of a stablecoin. This is not a technology experiment but a structure in actual operation under regulatory approval.

Many Asian internet banks already operate strong mobile-app customer channels, fast-remittance services, and high digital-finance penetration. The constraint on replicating this structure is regulatory rather than technical.

Each country still lacks regulatory standards on whether a bank can issue a stablecoin on a public blockchain and whether interest and depositor protection can apply to tokenized deposits. SoFi was able to do this because the US set the regulation first and provided guidance. Once each country’s financial authorities fix the same baseline, Asian internet banks will be able to apply the same structure.

Bullish: Institution-Only Digital Asset Trading

Bullish is an institution-only digital-asset exchange licensed in more than 50 jurisdictions, including by the Gibraltar Financial Services Commission (GFSC), Germany’s BaFin, the Hong Kong Securities and Futures Commission (SFC), and the New York Department of Financial Services (NYDFS).

In July 2025, Bullish officially declared that it would adopt a Solana-network stablecoin as the main rail for custody, payment, trading, and settlement across its exchange and clearing services. Bullish’s reason for choosing Solana is clear. When an institutional exchange moves funds with counterparties across more than 50 jurisdictions, the conventional settlement structure that routes through each country’s fiat and correspondent banks carries fees of tens of dollars per transaction and processing delays of one to five days.

A stablecoin replaces this multilayered clearing structure with a single rail. For Bullish, this can be seen as expanding the revenue base, not just cutting costs. Beyond trading fees, stablecoin interest income, liquidity-service income, and DeFi protocol income all fall under the service revenue defined in Bullish’s reporting.

Bullish’s settlement structure operates in three stages.

1. Order matching: when an institutional investor submits a buy or sell order on the Bullish platform, matching occurs in the internal order book. Under a full-reserve structure, client assets are held 1:1 in separated custody, with no maker fees or custody fees. It also applies no collateral haircut up to a notional $1 billion for USD and major stablecoins.

2. On-chain settlement: a Solana-based stablecoin operates as the main rail across custody, payment, trading, and settlement. Even when counterparties across more than 50 jurisdictions use different fiat systems, the Solana-based stablecoin is designed as a common settlement unit.

3. Infrastructure deepening: Bullish’s use of Solana extended beyond payment and settlement into security-type assets. In May 2026, it tokenized its own stock, BLSH, on Solana. It runs the structure with SEC-registered transfer agent EQ, allowing only whitelisted addresses, and has not yet opened AMM or DEX trading.

The core of the Bullish case is that a regulated exchange handling billions of dollars in institutional trades placed a Solana-based stablecoin as its core operating rail and actually processed an event carrying legal responsibility, the settlement of IPO proceeds, on Solana. In August 2025, Bullish announced that it received $1.15 billion in IPO proceeds in stablecoins, most of it processed in stablecoins issued on the Solana network. Jefferies coordinated the transaction and Coinbase handled custody. A large capital-market event carrying legal responsibility was processed with a Solana-based stablecoin.

5. Regulatory Change That Embraces the Industry with Solana

Companies build an industry, but regulatory clarity determines how that industry is defined and bounded.

Because Asian financial institutions operate mostly under positive regulation, which restricts entry outside permitted areas in principle, they need to review the global regulatory environment before deploying capital. In major countries such as Korea and Japan, which have followed a government-led growth path, new businesses without a clear legal basis are treated as potential risks or as unlawful.

The West, by contrast, follows the common-law principle of negative regulation, permitting business up front and then drawing boundaries after the fact through reactive policymaking when risks emerge or sufficient scale is reached. Such policymaking can take several forms including legislation, regulation, and enforcement.. This structure became the framework in which diverse innovative services appeared first in the crypto market and were later drawn into the regulated industry.

In the current transitional phase, where institutional inclusion and legal ambiguities coexist, the capacity to anticipate and manage regulatory risk in advance is emerging as a key market requirement.

The Solana Policy Institute (SPI) is deeply involved in this regulatory-design process. A nonprofit policy body founded in Washington, DC, in March 2025, it represents the crypto industry as a whole beyond the Solana ecosystem and has put forward concrete alternatives in legislative and regulatory debate. Its main activities are as follows.

• Project Open proposal: submitted jointly with Orca, Superstate, and Phantom (among others) to the SEC crypto task force on April 30, 2025. It is a proposed exemptive relief pilot framework for secondary trading of securities on AMM infrastructure like Orca on a public blockchain like Solana, with a white-listed wallet framework managed by a registered transfer agent. All parties have continued the dialogue with the Commission since, including through written submissions and presentations to SEC leadership and staff. SPI is pursuing a similar pilot program at the Commodity Futures Trading Commission to bring on-chain derivative and futures transactions into the regulatory fold.

• Pushing the market-structure legislation (CLARITY Act) and the GENIUS Act: SPI participates as a core driver of the legislative debate and led the inclusion of a clause protecting open-source developers (the Blockchain Regulatory Certainty Act). Last year, SPI assisted Congress in developing the GENIUS Act and is currently participating in the regulatory implementation of that law.

• Setting tax standards: it formally asked the Treasury to revise IRS guidance so that staking and mining rewards are taxed at the point of sale rather than at the point of creation. The US Congress is currently considering tax legislation that addresses the taxation of staking rewards, creates a de minimis exemption for digital asset transactions under $10, and more broadly resolves tax questions that have emerged as the industry has developed.

• Protecting developers: in response to the Tornado Cash developer case, where writing code itself escalated into criminal liability, it donated $500,000 to a legal-defense fund.

• Convening power: in April 2026, it brought federal lawmakers, the SEC, White House officials, and Wall Street institutions together at the Solana Summit NYC, and together with more than 65 crypto organizations submitted a letter of policy priorities to the White House.

These activities show that US regulation is being drawn in real time through interaction between the private sector and the authorities, rather than designed unilaterally by government. The contours of regulation have taken shape as the industry proposes frameworks.

As a result, the current regulatory landscape divides into two areas. Holding, issuing, and settling regulated assets like securities have been brought into a lawful regime, and the SEC appears on the precipice of creating a fully-developed “innovation exemption” for the on-chain trading of such securities via trading protocols on public blockchains. The compliance capacity to anticipate the macro timeline is likely to determine the success or failure of capital deployment.

5.1 What Works Now: Activities Brought into the US Regulatory Fold

The activities brought inside regulation so far have prioritized points of contact with existing regulated markets and assets. Most of the activities are those that conventional finance players already do well. The areas where public blockchains strengths come fully into play remain to be completed.

Bank Crypto Custody (Repeal of SAB 121)

In January 2025, the SEC’s Staff Accounting Bulletin No. 121 (SAB 121) was formally repealed, removing the barrier to large banks entering the market. The previous guidance forced banks to record customer crypto held in custody as a liability on the bank’s balance sheet at the same time. As a result, banks had to tie up large amounts of their own capital against custody to meet capital-adequacy (BIS ratio) requirements, which made the custody business unworkable.

After the repeal, crypto is classified off-balance-sheet like ordinary stocks or bonds, establishing a normal business structure of safe custody for a fee. To support this, federal regulators issued joint guidance on risk management, AML, and KYC for digital asset custody (Federal Reserve, as of July 14, 2025), while also confirming a technology-neutral approach that applies identical capital requirements to tokenized securities (Federal Reserve, as of March 5, 2026). Following this clear regulatory framework, large custodian banks such as BNY Mellon and State Street launched digital-asset trust services linking separate wallets with bank accounts.

Digital-Commodity Status and Approval of Protocol Staking

On March 17, 2026, the SEC and the CFTC issued joint interpretive guidance confirming 16 major assets, including Solana (SOL), as digital commodities. The guidance divided assets into five types, discarding the old security/non-security binary, and formally excluded protocol staking from securities-law regulation. This extends the principle the SEC stated in January, that tokenization does not change an asset’s legal classification and that the law applies based on economic substance.

With the legal nature of the assets clarified, institutional investors gained the legal safety to buy, hold, and stake the 16 major assets, including Solana, without securities-law violation risk. Regulatory clearance does not, however, immediately guarantee large inflows. In Q1 2026, US institutions showed a cautious stance, concentrating capital on careful position rebalancing that turns staking-liquidity infrastructure and protocols themselves into assets, rather than increasing exposure to altcoin spot itself.

SEC Clarification of Investment Contracts

In 2025, the SEC clarified the application of the Howey Test to digital asset transactions, addressing the core regulatory debate of the 2021-2024 era. Specifically, the commission established a formal legal distinction between the digital asset itself, recognized as neutral underlying technology, and the investment contract under which it may initially be sold.

By confirming that the secondary market trading of these tokens does not inherently constitute a securities transaction, the SEC effectively removed the persistent legal overhang on major Layer-1 protocols. This critical clarification provided institutions with the regulatory certainty needed to safely hold and trade assets like Solana on regulated platforms without continuous securities-law violation risks (SEC, as of October 2025).

Stablecoins and Treasury Tokenization Under the GENIUS Act

The federal GENIUS Act, passed in 2025, specifies stablecoins as a distinct asset type rather than securities or deposits and imposes federal licensing standards and operating requirements on issuers. With issuers’ legal status established, stablecoins were reclassified within institutional portfolios from a risk asset to a lawful, low-volatility on-chain payment rail. As legal risk lifted, conventional financial firms’ thematic interest in and investment into infrastructure companies such as Circle became visible. The regulatory paradigm will only be complete, however, once it carries through to final passage of the federal market-structure bill (the CLARITY Act), which would close out the entire crypto asset-classification scheme.

Tokenized Securities Led by Legacy Exchanges

On March 18, 2026, the SEC gave final approval for Nasdaq to trade certain securities in tokenized form (approving Rule Change SR-NASDAQ-2025-072). Eligible participants settle with blockchain tokens instead of conventional physical book entry, and tokenized stocks trade in parallel in the same order book as conventional stocks, with the same prices and shareholder rights guaranteed. In step with this, the Depository Trust and Clearing Corporation (DTCC) confirmed a limited pilot starting in July 2026 and a full launch in October, covering Russell 1000 names, major index ETFs, and US Treasuries.

This is an approach that adopts blockchain technology while keeping control of the ledger with existing financial institutions. Because trading itself follows the existing T+1 settlement cycle, the focus is less on technical novelty than on using margin collateral between regulated institutions and improving post-market settlement. It is a closed model not directly connected to the public-chain ecosystem, and attention going forward should turn to expanding free trading.

Perpetual Futures (Perps) on Regulated Exchanges

On May 29, 2026, the CFTC approved Bitcoin perpetual futures trading on a US regulated exchange for the first time. Kalshi obtained approval for its “BTCPERP” contract, and on the same day a no-action letter allowing a perpetual-futures product was sent to Coinbase. This is the first move to pull the large perpetual-futures liquidity that had been concentrated on unregistered offshore exchanges such as Binance and Bybit (about $61.7 trillion a year as of 2025) into the US regulated system. Given the fee rates and leverage terms offered by offshore exchanges, however, a cautious view also holds that, regulation aside, whether trading volume will move meaningfully to the US remains to be seen.

5.2 What Does Not Work Yet: The Frontier Defining Industry Standards

Where the areas above opened first around activities that fit the grammar of conventional finance, the unresolved areas here are attempts to make full use of public blockchain’s own disruptive strengths, decentralization and autonomy.

These areas would all be addressed comprehensively via the CLARITY Act, which would, for example, define the overall market structure for digital assets, create a spot-market regulatory framework for digital commodities, direct the SEC and CFTC to conduct rulemakings to allow for businesses to conduct activities within those regulators’ jurisdictions on public blockchains, and allow US banks to operate on public blockchains. In March 2026 the two agencies classified tokens as digital commodities, digital securities, and stablecoins and divided jurisdiction through joint interpretive guidance, but the SEC defined that guidance as a temporary bridge until Congress legislates a comprehensive framework. CLARITY is the work of Congress hardening into law the boundary the current, and future, executive’s interpretation of how to regulate crypto and public blockchain-based markets.

For institutions to fully remove macro regulatory risk and deploy long-term capital, they need the durability of statute to be confident that regulatory expectations will not shift dramatically with political change.

The bill’s scope is not limited to crypto-native operators. It also covers the standards conventional intermediaries must follow when they bring digital rails into their own products. Existing market rules assume that every trade has an intermediary such as a broker or a custodial exchange, but on a blockchain that assumption does not hold. CLARITY would codify rules premised on a market structure without intermediaries.

The industry, including SPI, is pushing the bill hard at the front of the legislative effort, but the outlook in Washington is far from the optimism on social media. The bill passed the House 294 to 134 in July 2025 and cleared the Senate Banking Committee 15 to 9 on May 14, 2026, but its chance of becoming law this year is about 50% or lower. The two parties are at odds over an ethics clause that would restrict the president and senior officials from profiting from crypto businesses while in office. A May 2026 agreement on stablecoin yield restored some legislative momentum, but the banking sector still strongly opposes core provisions.

The decisive factor is time. The roughly four-week legislative window in the Senate from mid-July to the recess in early August is effectively the deadline for passage this year. Miss that window, and the timeline slips into the 2026 midterm phase, where reaching agreement becomes harder in the pre-election landscape. While macro legislation is delayed, the barriers facing key businesses on the regulatory boundary and the attempts to break through them with technology are as follows.

Free Trading of Stocks on Public Chains

The SEC recently raised expectations by discussing approval of “third-party stock tokenization” without the listed company’s consent (an innovation exemption), but two key hurdles remain before actual approval. First, the authorities’ strict standard that excludes mere synthetic stocks and permits only on-chain stocks that fully guarantee actual shareholder rights, voting and dividends. Second, strong resistance from conventional finance (Nasdaq, SIFMA, and others) worried about the liquidity fragmentation that spreading trading across many blockchains would bring. Final approval is therefore on hold amid tense disagreement.

To comply with existing SEC requirements, tokenized-stock services on public chains today remain a half-market, restricted strictly to non-US residents (Reg S) or wealthy accredited investors (Reg D). To break this limit, the Solana Policy Institute (SPI) and others have proposed the Project Open pilot, which performs real-time settlement (T+0) between KYC-completed wallets through a non-custodial AMM (Orca) without a conventional intermediary, in an attempt to enable fully free securities trading on public chains.

Deferred Licensing for Interfaces (Front Ends)

On April 13, 2026, the SEC’s Division of Trading and Markets issued temporary guidance (a staff statement) stating that decentralized interfaces meeting certain conditions may operate without broker-dealer registration. This is a sunset provision expiring in five years, however, and essential regulatory gaps remain, such as who bears the anti-money-laundering (AML/KYC) obligation and who is responsible for order handling, so it carries risk for large institutional capital to flow in immediately.

In this institutional transition, decentralized exchanges are looking for a way through to prepare for the expiry. Orca, for one, is combining institutional compliance tools and real-time on-chain screening into its own front-end and smart-contract layer to advance a transparent order-handling infrastructure. The self-regulatory compliance model they build during the deferral period is likely to be cited as a reference when a permanent legislative framework is set.

Interest Payments on Stablecoins

Despite stablecoins gaining formal regulatory recognition, the GENIUS Act strictly prohibits issuers from paying any form of interest or yield to holders. The concern is that if stablecoins were to offer competitive returns, household funds would flow out of bank deposits and into tokens in significant volume.

Under the CLARITY compromise text that has passed the Senate Banking Committee, yield generated through third-party platforms, such as lending protocols or exchange deposit products, falls outside the scope of the prohibition, as long as the issuer itself is not paying the yield. Banking industry pressure to close even these affiliated and third-party channels is intensifying, however, and attempts to structure yield-bearing stablecoins on public chains remain on the regulatory boundary. The CLARITY Act has not yet been finalized, and the specific question of stablecoin yield payments is among the issues that remain unresolved in further deliberations.

6. Why Institutions Choose Solana: The Technical Reasons

As the earlier cases show, global financial institutions with different aims did not choose Solana out of simple preference. Given that conservative finance puts capital into systems that actually work rather than into theoretical possibilities, it is because Solana met the technical requirements of institutional finance.

The Economics of Settlement: T+0 and Atomicity

The utility of Internet Capital Markets begins with the efficiency of settlement. The existing financial system has a physical time gap between trade execution and fund settlement, and clearinghouses and intermediaries have occupied a place to fill that gap.

On blockchain infrastructure, the asset transfer and the payment execute bundled into a single transaction. If one side’s condition is not met the whole trade is canceled, so counterparty performance risk is removed even without a clearinghouse.

Solana’s distinction lies in the conditions under which this structure works. Finality takes about 0.5 seconds, and the average fee is $0.0013 per transaction. If every cycle of setting and releasing collateral added several dollars in cost or took a day to settle, a leverage strategy would be eaten up by costs before it produced any return. Solana’s speed supports it.

Built-In Compliance: Programmable Compliance

The most sensitive area in institutional finance is compliance. A financial institution must keep strict control over the issuance, holding, and trading of assets. Where compliance in the existing blockchain environment was an after-the-fact measure dependent on external systems, Solana embeds this requirement directly into the token standard (Token-2022) and the protocol layer.

An issuer can control trading so that only verified wallets transact, and it holds the authority at the code level to freeze or claw back assets immediately when legal action is required. Transaction amounts are encrypted with zero-knowledge proofs, leaving the origin and destination on the public ledger while only the sender, the receiver, and a designated auditor can see the amount. This is a design that secures auditability and confidentiality at once, not anonymity. This is the technical basis that allows institutions subject to regulatory requirements to operate on a public chain.

Institutional-Grade Stability and Evolving Infrastructure

For an institution to put live capital on-chain, the network must not stop. In October 2025, when a market crash coincided with an AWS outage, Solana ran without interruption while other chains seized up, proving this condition first in the retail environment.

The next task was the single-client structure. In a structure that depends on a single validator client, a defect in that client can bring the whole network to a halt. Solana is reducing this vulnerability by moving to a multi-architecture that runs several independent validator clients.

The technical roadmap points the same way. By redesigning the consensus protocol, finality is being shortened from the current 0.5 seconds to about 150 milliseconds, and a structure that verifies identity before the transaction-execution stage is being introduced at the protocol layer. The infrastructure is keeping pace with the sophistication institutions require.

Full Operational Sovereignty: Contra

Some institutions are not suited to a public network. This applies when all transactions and balances cannot be exposed on a public ledger, when a jurisdiction-specific KYC/AML system must be designed in-house, or when control over validation, ordering, and governance must stay internal.

For such institutions, Solana offers Contra separately from the public mainnet. It allows privacy over all transactions and balances, full autonomous control of validation and network governance, jurisdiction-specific regulatory frameworks, an organization’s own risk-management and security standards, and a self-designed fee and revenue-sharing model.

An institution that chooses a private chain does not have to leave the Solana ecosystem. It uses the performance base proven on the public network as is, resetting only the operating conditions to fit the institution’s requirements.

Enterprise Entry Infrastructure: SDP

Starting work on Solana requires the technical capacity to integrate blockchain infrastructure directly. To lower this barrier, the Solana Foundation launched the Solana Developer Platform (SDP) on March 24, 2026.

SDP is an API-based enterprise platform that ties more than 20 infrastructure providers into a single interface. It consists of three modules for issuance, payment, and trading. At launch, the issuance module (tokenized deposits, stablecoins, RWA) and the payment module (coordinating fiat and stablecoin flows) were supported first.

The trading module, which handles atomic swaps and on-chain FX, is scheduled for the second half of 2026. Mastercard, Worldpay, and Western Union are listed as early users, and all three are already running working settlement on Solana.

Closing the Loop on On-chain Liquidity: Orca

Even after an asset has been successfully issued, it remains little more than a ledger entry without a secondary market where it can actually trade. The settlement performance, programmable compliance, and infrastructure stability described above only function meaningfully when there is a liquidity layer through which assets can circulate.

Orca has operated on Solana since February 2021, providing a liquidity layer that can be configured to match the requirements of different asset types, from open liquidity provision to permissioned trading environments. Its permissioned pools are the core mechanism: access controls are embedded on-chain, allowing issuers to manage investor eligibility directly at the code level.

Where programmable compliance governs the issuance stage, permissioned pools extend that same logic into distribution, creating a continuous structure that supports assets from initial issuance through active secondary trading on-chain.

7. Asia’s Path to On-Chain Capital Markets: A Strategic Execution Framework

The cases this report has covered are not mere forecasts but live references pointing to a structural change in global financial markets. The market’s question has now moved from whether the shift is warranted to the timing and method of execution.

The stage of being a first mover that designs all infrastructure from nothing has passed for Asian financial institutions. A strategic fast-follower stance, adopting infrastructure and regulatory references already proven in the US market to reduce trial and error, is likely the realistic path for them.

The test for deciding entry, however, is not whether policy exists but whether it can actually be executed. Whether explicit laws, guidelines, and a licensing system are in place, and whether market infrastructure such as custody, settlement, and disclosure has been built in parallel, is what separates what can be commercialized now from what cannot. The framework below divides regulatory maturity into three stages based on execution feasibility, licensing path, and market infrastructure, and sets out the strategy each stage calls for and the criteria for success.

The executable area is a matter of execution, not review. Explicit licensing systems and market infrastructure are already in place, so institutions in jurisdictions with mature frameworks, such as Singapore, Hong Kong, Japan, and the UAE, can move into commercialization right away. The risk here is delay, not entry. Institutions that enter first secure an operating track record and liquidity partners ahead of others, and later entrants carry that gap as a cost.

The transitional area calls for preparation rather than entry. Because policy direction is clear but detailed rules and licensing requirements are undecided, what is needed now is not full commercialization but a structure that can convert to commercialization the moment regulation is confirmed. Korean institutions, where formalization is under way, fall here. Starting to prepare only after regulation is confirmed is too late, because institutions that have arranged licenses, systems, partnerships, and internal compliance in advance do not start from the same line as those that have not.

For institutions whose home regimes move slowly, an offshore route is an effective alternative. Rather than waiting at home for regulation to open, they place an entity in a jurisdiction that is further ahead and try there first. Running pilots within the regulatory frameworks of Singapore or the UAE lets them build a counterparty network and a compliance system, and they transfer that capability home in step with the pace at which the home regime is set up. They do not let time slip away while waiting for legislation, and the moment regulation opens, they can bring in a structure that has already been validated.

The exploratory area is a matter of keeping options open, not betting. At a stage where even legal definitions and asset classifications are unsettled, pouring resources into one side is itself the greatest risk. It is better to accumulate technical and market data through small experiments and keep the capacity to scale quickly when standards or regulatory direction are confirmed.

The framework points to a single conclusion. The variable left for Asian institutions is not whether to enter but the order and the point of entry. The references have already been validated, and the standard is not yet fixed. This interval, in which validation is complete but the standard is not yet fixed, is the window available to a fast follower. How long it remains open is uncertain.

8. Solana: The Substance of Internet Capital Markets

The remaining question is which infrastructure to choose.

Financial institutions are a conservative group. They put capital into systems that actually work, not into theoretical possibilities. Global institutions with different aims, such as J.P. Morgan, State Street, and Franklin Templeton, chose Solana at the same time not out of simple preference but because it met each of their technical and structural requirements. Those requirements come down to three.

The first is institutional compliance built into the asset itself. A structure that embeds requirements such as asset seizure, freezing, and eligibility control as code at the protocol level (Token-2022) lets the issuer place these measures inside the token rather than adding them afterward, which lowered the entry barrier for institutions.

The second is proven throughput, since a record of operating without interruption through extreme traffic and sudden market swings demonstrated the continuity that financial infrastructure depends on.

The third is accumulated precedent within a single ecosystem. From policy engagement in Washington through SPI to live settlement and clearing infrastructure, a working structure has already been built within one ecosystem. Asian institutions can adopt and apply that structure rather than designing it from the ground up, which is where the fast-follower strategy described in section 7 operates most directly.

These three are not a verdict that one infrastructure is superior but an observation of where institutional capital has actually gathered. Validation shows up not in price but in who put what, and where. The trajectory of capital this report has traced points to Internet Capital Markets being no longer a concept but a working reality. The stage where that reality has been built out most fully was Solana.

The shift has already begun, and the infrastructure has been validated. What remains is the execution question of what Asian institutions will put on it, and when.

Leadership Insights

📥 Download Report

Disclaimer

This report was partially funded by Solana Policy Institute. It was independently produced by our researchers using credible sources. The findings, recommendations, and opinions are based on information available at publication time and may change without notice. We disclaim liability for any losses from using this report or its contents and do not warrant its accuracy or completeness. The information may differ from others’ views. This report is for informational purposes only and is not legal, business, investment, or tax advice. References to securities or digital assets are for illustration only, not investment advice or offers. This material is not intended for investors.

Terms of Usage

Tiger Research allows the fair use of its reports. ‘Fair use’ is a principle that broadly permits the use of specific content for public interest purposes, as long as it doesn’t harm the commercial value of the material. If the use aligns with the purpose of fair use, the reports can be utilized without prior permission. However, when citing Tiger Research’s reports, it is mandatory to 1) clearly state ‘Tiger Research’ as the source, 2) include the Tiger Research logo following brand guideline. If the material is to be restructured and published, separate negotiations are required. Unauthorized use of the reports may result in legal action

The DeFi ecosystem already contains every core financial primitive, from swap and lending to yield and derivatives. What remains absent is the execution layer that makes these products accessible to a mainstream audience. We examine why prior attempts to eliminate wallet complexity and chain friction have fallen short, and what structural differentiation defi.app brings to that gap.

Key Takeaways

• DeFi infrastructure has matured, but consumer-facing apps capable of retaining users remain absent. Traditional fintech firms like Robinhood face regulatory barriers that block entry into self-custody and high-leverage products.

• Since its February 2025 launch, defi.app has accumulated $44B in cumulative trading volume and 1.06M registered users, validating its gas-abstracted, chain-agnostic interface.

• Rocket Perps charges fees significantly above standard DEX rates, but directs 80% of total platform revenue to a governance-approved $HOME buyback program under DIP-004.

• For defi.app to achieve long-term growth, it must go beyond short-term user acquisition and create conditions for daily habitual engagement built on a foundation of trust.

1. Why No One Has Captured the DeFi Execution Layer

Despite a decade of DeFi development since Ethereum’s 2015 launch, mainstream adoption has stagnated. The core barrier is not product quality but user experience friction.

A 2023 Consensys/YouGov survey found 93% of global respondents had heard of crypto, yet only 8% described themselves as familiar with Web3 or DeFi. Conditions have not materially improved since.

A 2025 1inch survey identified the top DeFi pain points as gas fees (27%), security risks (22%), slow transactions (18%), and bridging complexity (14%). These are UX frictions, not product failures.

Robinhood succeeded in traditional finance by making stock trading free and accessible from a single smartphone, at a time when brokerage fees and complex account-opening procedures were the norm. Its success came from simplifying a low-barrier investment experience that anyone could try.

DeFi’s native demand is structurally different, covering high-leverage derivatives, onchain yields, and self-custody. These are areas regulated fintech cannot legally offer. Robinhood has begun handling some crypto spot assets, but self-custody and permissionless high-leverage products remain firmly outside its regulatory perimeter.

The DeFi execution layer’s goal is not to replicate Robinhood’s business, but to deliver Robinhood-level UX on the territory Robinhood cannot enter.

2. Why Prior Attempts Failed

Zerion, Zapper, and Instadapp (Avocado) all attempted to reduce DeFi entry friction through aggregated dashboards and smart account (Account Abstraction) technology. Direction was correct; retention was not.

The structural failure was the absence of a durable retention loop. When token or point incentives ended, users migrated to the next reward cycle. These platforms cleared the technical hurdle but could not retain users without incentives, falling short of the fintech D30 retention benchmark of 9.2%.

Reducing friction and building daily return habits are separate design problems. Robinhood retained users not simply because trading was free, but because notifications, spending analytics, and daily rewards created autonomous re-engagement loops. Existing DeFi apps lacked the product design capability to build those loops without incentives.

Reviewing prior failure patterns, three conditions must be satisfied simultaneously for a platform to capture this market.

1. Frictionless access, meaning users experience no chain separation, gas fees, or bridge complexity.

2. Retention loop: a mechanism that keeps users returning after token incentives expire.

3. Crypto-native coverage: full coverage of self-custody and high-leverage products that regulated fintech cannot offer.

The platform that integrates all three becomes the market standard.

3. defi.app’s Approach: What the Numbers Show

defi.app consolidates Swap, Earn, and Perps into a single interface. EIP-4337 smart account-based gas abstraction eliminates the need for users to manage gas separately. Trades across EVM and Solana ecosystems are automatically routed via optimal paths through aggregators including 1inch and Jupiter. The design prioritizes financial product accessibility while concealing Web3 infrastructure complexity.

The following figures were recorded across the period since launch.

With 1.06M registered users, defi.app has demonstrated strong onboarding capacity. An MAU of 30,000–40,000 and DAU growth of approximately 3,000% from inception indicate that a meaningful retention base was already in place ahead of the Rocket Perps public launch. The key question now is how far the June 4 launch can extend that base.

4. Rocket Perps: Linking Engagement to Revenue and Token Value

Until now, defi.app had focused on eliminating friction and building retention loops, but remained in direct comparison with traditional fintech. It consolidated many services into one place, yet stopped short of the third condition: crypto-native coverage.

Source: defi.app

Rocket Perps is defi.app’s answer to that gap.

Rocket Perps is a 1000x leverage perpetuals product integrated with a pixel-art arcade game interface. Built on Aark Digital’s oracle infrastructure, it enables instant position execution without counterparty matching. Tapping incoming asteroids accumulates XP, claimable as $HOME token rewards, creating a gamified loop designed to drive repeat engagement.

The following figures were recorded during the soft launch period (May 13 to May 28, 2026).

264 users generating over $400M in volume over two weeks reflects the capital efficiency and intensity characteristic of high-leverage products. These are early-adopter, high-risk-tolerance traders. Public scalability requires separate validation.

1000x leverage may appear excessive at first glance, but it maps directly onto the psychology of crypto market participants. Many crypto traders willingly accept high risk in pursuit of outsized returns. Rocket Perps translates that appetite into a product occupying the territory regulated fintech cannot enter.

The fee structure warrants attention. Entry carries a 4% margin fee, and profitable exits are subject to a tiered fee of up to 50% of gains. This is significantly higher than standard perpetuals DEXs, which typically charge between 0.02% and 0.07%. Total platform revenue across spot, perpetuals, and the Rocket Perps arcade is directed 80% to the $HOME buyback program under DIP-004, making the fee structure a deliberate design choice aligned with the platform’s ecosystem goals. As a high-conviction trading product rather than a hedging instrument, the premium fee model is likely to be received as reasonable by its target users.

Hyperliquid offers the clearest precedent for this kind of fee-to-buyback flywheel. The protocol directs 97% of all fees toward HYPE token buybacks, with every transaction immediately and publicly verifiable onchain. If defi.app can demonstrate the same virtuous cycle onchain, the cost premium for users becomes offset by a powerful incentive to stay.

5. Milestones defi.app Must Clear

5.1. Retention Validation and Trust Framing

The 264 soft launch traders were self-selected high-risk participants. The June 4 public launch of Rocket Perps marks the first real test of general user retention, and the question is whether the existing MAU base of 30,000–40,000 can be meaningfully scaled from that point.

Robinhood faced this challenge first. When the meme stock cycle ended in 2021, MAU dropped sharply from its peak. The response was to add credit cards, banking, and social features, giving users reasons to open the app independent of trading activity. It demonstrated that a separate daily loop is required to retain users regardless of portfolio performance.

defi.app faces the same design challenge. Continuously launching features that align with the instincts of crypto-native traders will attract users, but sustaining them requires building the perception that the platform is a reliable place to put assets to work. Both must happen in parallel. Only when retained users find reasons to engage with defi.app as part of their daily routine does the platform become a true everything app.

5.2. Onchain Transparency for Buyback Execution

For investors evaluating $HOME today, the most compelling thesis is the commitment to direct 80% of total platform revenue to a governance-approved buyback program. But crypto investors have been burned by this type of promise before, and scrutiny is high. Even a small gap between stated commitments and onchain evidence can erode market trust faster than expected.

Hyperliquid resolved this most cleanly. Buybacks execute automatically the moment fees are generated, and every transaction is publicly queryable onchain. No announcement is needed because the data speaks for itself.

defi.app’s 80% commitment is compelling on its face. If the platform publishes the buyback execution wallet address and launches a real-time revenue dashboard simultaneously with the Rocket Perps public launch, it has the foundation to build the same trust-driven flywheel Hyperliquid demonstrated.

6. Conclusion

Robinhood transformed the financial experience but operates within regulatory boundaries. Self-custody, high leverage, and permissionless yield remain inaccessible. DeFi built finance beyond those boundaries but could not retain users. The infrastructure exists; the daily return loop does not.

defi.app’s objective sits precisely in that gap: building the experience DeFi has not yet created, on territory Robinhood cannot enter.

The approach operates across three axes. 1) Eliminate friction through gas and bridge abstraction. 2) Add features like Rocket Perps that give users reasons to return repeatedly. 3) Route fees into a governance-approved $HOME buyback program tied to real platform usage.

defi.app is a team that understands what draws users into the crypto market. For users who embrace the volatility native to crypto, Rocket Perps offers a compelling entry point and a reason to come back. Beyond short-term acquisition, the deeper question is whether the platform can build the conditions for daily habitual use: users generating yield through Earn, accumulating XP through gameplay, and returning not because of incentives but because the app has become part of how they manage their assets.

When that condition is met, defi.app becomes not merely another DeFi app, but the first market standard in a space Robinhood cannot enter.

🐯 More from Tiger Research

Read more reports related to this research.

• DeFi’s Dopamine Hit Is Over. RWA Offers Something Real.

• On-Chain to RWA. The New DeFi Base Built on Yield-Bearing Stablecoins

• Onchain Risk Curators: $147T vs $7B Market Gap

• Korea Institutional Crypto: 2026 Landscape

Disclaimer

This report was partially funded by defi.app. It was independently produced by our researchers using credible sources. The findings, recommendations, and opinions are based on information available at publication time and may change without notice. We disclaim liability for any losses from using this report or its contents and do not warrant its accuracy or completeness. The information may differ from others’ views. This report is for informational purposes only and is not legal, business, investment, or tax advice. References to securities or digital assets are for illustration only, not investment advice or offers. This material is not intended for investors.

Terms of Usage

Tiger Research allows the fair use of its reports. ‘Fair use’ is a principle that broadly permits the use of specific content for public interest purposes, as long as it doesn’t harm the commercial value of the material. If the use aligns with the purpose of fair use, the reports can be utilized without prior permission. However, when citing Tiger Research’s reports, it is mandatory to 1) clearly state ‘Tiger Research’ as the source, 2) include the Tiger Research logo following brand guideline. If the material is to be restructured and published, separate negotiations are required. Unauthorized use of the reports may result in legal action

What if FTX’s reserves had been directly verifiable? Unverifiable finance can fail at any time. With AI agents executing trades on behalf of humans, that risk spreads faster.

Key Takeaways

• The 2008 crisis and FTX collapse shared the same root, unverifiable structures. Trust was the only option. Hidden insolvency surfaced all at once.

• Nexus replaces institutional assurances with mathematical proof via zero-knowledge proofs. Reserves, liquidation logic, and trade matching all become verifiable.

• The Trifecta, L1 + Nexus Exchange + USDX, is the core mechanism. Volume drives USDX demand, and that revenue funds developers and grows the ecosystem. The flywheel depends on initial volume.

• Verifiability proves its worth in a crisis. With established exchanges already entrenched, how fast Nexus secures initial liquidity is Trifecta’s first real test.

• That value compounds in an AI agent era. One error can propagate across a market in a chain reaction. Nexus’s structural case grows stronger over time.

1. Finance Is Not Transparent

The problem with traditional finance is not performance. We already have convenient financial services. The problem lies behind that convenience: users cannot see what is actually happening inside the financial system.

This opacity has repeatedly triggered crises.

The 2008 financial crisis is the clearest example. U.S. commercial banks knew loan defaults were mounting, yet chose not to reflect those losses on their books. Financial statements looked healthy, and neither depositors nor regulators could identify the real risk. Hidden insolvency surfaced all at once, shaking the global financial system.

The problem will only grow. As AI agents emerge as primary actors in financial transactions, algorithms replace the judgments that humans once made. Without a verifiable system in place, there is no way to catch errors when they occur.

2. Verifiable Finance

Nexus focuses on the absence of verification hidden behind convenience. Its goal is to transform finance that has never been verifiable into what it calls Verifiable Finance.

Zero-Knowledge Proof (ZKP) makes this possible. It is a technology that mathematically proves a statement is true without revealing the underlying details. Consider an exchange claiming to hold $10B in customer assets.

• [As-Is] Current approach: The exchange announces that assets are “safely held.” Users have no way to verify the actual balance.

• [To-Be] ZKP approach: The exchange feeds asset data into an algorithm, which generates a proof that holdings meet or exceed customer deposits. Specific asset details remain private, and only the fact that the condition is satisfied is mathematically proven.

In other words, trust in the institution is replaced by mathematical proof.

Nexus aims to extend this across the full financial stack: trade matching, routing verification, and validation of profit/loss calculations and liquidation logic. The intent is to convert areas that once required institutional trust in faith into subjects of proof. Financial infrastructure, in turn, gets rebuilt on a verifiable foundation.

ZKP has often functioned as a marketing term rather than a production technology, even as costs have fallen and throughput has grown. Nexus responds by targeting finance as a specific use case rather than building a general-purpose proving environment. The goal is to demonstrate ZKP in practice, in a domain where accuracy and transparency are directly tied to the safety of user funds.

3. ZKP in Practice: The Trifecta

Last cycle disproved the assumption that good technology attracts good applications on its own. Nexus builds the financial services directly. L1, Nexus Exchange, and stablecoin USDX form a single integrated stack.

Existing chains keep L1, exchange, and stablecoin separate, bridged by external integrations. Speed, liquidity, and verification run in different environments as a result. Nexus designed the L1 and exchange together, with USDX embedded directly in the chain. All three share one environment. Nexus calls this the Trifecta.

The flow is simple. Exchange activity drives USDX demand, pulling more capital into the ecosystem. That capital deepens liquidity, which grows trading volume. The L1 is the infrastructure underlying the entire cycle.

3.1. Nexus Exchange: An Exchange Built Into the Protocol

Nexus Exchange is structurally different from a typical DEX. Most DEXs deploy as smart contracts on top of a chain. Nexus Exchange runs within the chain itself, not on top of it. Think of it less as a downloaded app and more as a function native to the operating system.

With the exchange embedded in the chain, every application shares one order book and one liquidity pool. Liquidity stops fragmenting across protocols and consolidates in one place. Trade execution runs in the chain’s high-speed environment, delivering CEX-level speed in a non-custodial structure.

An alpha version is currently in development on testnet. Features are expanding through community feedback. Long-term, Nexus Exchange is positioned to serve three roles at once.

• Proof network activation: Ongoing trading creates the workload that keeps the proof network live.

• Reference app: The first live demonstration of Nexus architecture’s performance and verification capabilities.

• Liquidity gateway: The primary channel for pulling capital into the ecosystem.

One exchange drives infrastructure, proves the technology, and attracts capital. But it is still an exchange, and volume is what matters. Crypto trading volume is down from its peak, and crypto assets alone cannot fill an exchange. How quickly real-world assets like equities and bonds come onchain will be the deciding factor.

3.2. USDX: Native Stablecoin

USDX is the base currency of the Nexus ecosystem, serving as the default settlement currency for Nexus Exchange. All trades are denominated and settled in USDX.

Issued natively within the chain, USDX removes the need for external stablecoin bridges. Trading, settlement, and collateralization run within a single chain without interruption.

Issuance is planned on M0 infrastructure, backed 1:1 by U.S. Treasuries. Nexus aims to apply cryptographic proof to collateral verification. Whether zkVM-based proof of reserves will be fully realized remains to be confirmed after mainnet.

Nexus Exchange generates the volume and liquidity. USDX is the fuel that runs the engine. Exchange activity creates USDX demand, and USDX circulation deepens exchange liquidity. But the cycle cannot start without a reason to use USDX. In a market where USDC and USDT are already deeply entrenched, being native is not a sufficient advantage. How quickly liquidity builds on the exchange will decide USDX’s fate.

4. Revenue Structure for Ecosystem Growth: Yield Streaming

An exchange and stablecoin working together are not enough if the ecosystem is empty. The flywheel needs developers and protocols. Nexus solves this through incentive design.

The core mechanism is GYDS (Global Yield Distribution System). It automatically distributes interest income from U.S. Treasuries, the collateral backing USDX, to app developers. Traditional DeFi required governance votes or foundation negotiations to receive grants. GYDS removes that process. Revenue is distributed automatically, proportional to the TVL and trading volume of apps integrating USDX.

This is not a one-time grant. Protocol revenue flows across the ecosystem in real time. Nexus calls this Yield Streaming. As user bases grow, developer earnings grow with them, without external support.

More trading volume means more USDX demand. More USDX demand means more Treasury yield. That yield flows to developers, pulling more apps into the ecosystem. More apps drive more volume. The Trifecta closes its loop.

5. Dual Core: A Chain With Two Runways

Verifiable Finance requires infrastructure built for it. Nexus solves this with a Dual Core architecture, two execution environments within one chain.

An airport analogy helps. A main runway for general flights and a dedicated high-frequency runway within the same airport, each running independently, coordinated by one control tower.

• NexusEVM (main runway): A general-purpose, Ethereum-compatible execution environment. Token issuance, governance, and standard DeFi protocols run here.

• NexusCore (dedicated runway): A high-performance environment built directly into the L1 for financial computation. Futures, derivatives, and liquidation processing complete in under 200 milliseconds.

Traditional DeFi could not deliver both. General-purpose chains offered composability but not speed. Dedicated chains offered speed but fragmented liquidity. Dual Core lets general and high-speed financial applications run at their own pace, sharing one chain and one liquidity pool.

Some features are still in development. Specifications may change before mainnet.

6. From Today’s Finance to Tomorrow’s AI Agent Finance

The real test begins now. Mainnet, originally targeted for Q1, has shifted to Q2 2026. Mainnet launch, USDX issuance, and Nexus DEX activation must all land at once.

Near-term, product usability is what to watch. Verifiability is invisible to users in normal conditions. Traders on Hyperliquid feel speed and liquidity depth, not how assets are verified. Users did not check proof of reserves before FTX collapsed. Whether the Trifecta can sustain itself on usability alone, before verifiability earns its recognition, is the question.

Longer term, verifiability is the point. When AI agents become the primary actors in financial transactions, the game changes. Agents feed each other’s outputs directly into the next trade. One error propagates across the chain. Humans stop when something feels wrong. Agents do not. Without cryptographic proof of execution, there is no way to break the chain.

Existing blockchains were not built for this. Speed and verifiability came at each other’s expense. ZKP processes computation off-chain and records only the proof on-chain. In a market where verifiability is a prerequisite rather than a feature, Nexus’s structural value grows.

Agent finance is still early. But time may be on Nexus’s side. More autonomous trading means more demand for verifiable infrastructure. The structure Nexus is building now, L1, exchange, and stablecoin interlocked in one verifiable environment, becomes more relevant with every passing cycle.

The architecture is compelling. What remains is execution and time.

🐯 More from Tiger Research

Read more reports related to this research.

• Citrea: Peter Thiel’s One Move on Bitcoin L2

• Solstice Finance: A Crypto-Native Asset Management Platform

• KRW Stablecoin, The Time for Execution

Disclaimer

This report was partially funded by Nexus. It was independently produced by our researchers using credible sources. The findings, recommendations, and opinions are based on information available at publication time and may change without notice. We disclaim liability for any losses from using this report or its contents and do not warrant its accuracy or completeness. The information may differ from others’ views. This report is for informational purposes only and is not legal, business, investment, or tax advice. References to securities or digital assets are for illustration only, not investment advice or offers. This material is not intended for investors.

Terms of Usage

Tiger Research allows the fair use of its reports. ‘Fair use’ is a principle that broadly permits the use of specific content for public interest purposes, as long as it doesn’t harm the commercial value of the material. If the use aligns with the purpose of fair use, the reports can be utilized without prior permission. However, when citing Tiger Research’s reports, it is mandatory to 1) clearly state ‘Tiger Research’ as the source, 2) include the Tiger Research logo following brand guideline. If the material is to be restructured and published, separate negotiations are required. Unauthorized use of the reports may result in legal action.

Among a crowded field of Bitcoin Layer 2s, Citrea earned the backing of Founders Fund. This report examines why.

Key Takeaways

• Most Bitcoin L2s do not actually use Bitcoin’s security. Citrea does, through ZK proofs and BitVM, with Bitcoin verifying state directly.

• Founders Fund has a track record of identifying unique technologies (SpaceX, Palantir). Choosing Citrea at peak Bitcoin L2 disappointment follows the same pattern of technical conviction.

• The Citrea team has no marquee credentials. But they were the first to validate ZK technology on Bitcoin in production first, and shipped a mainnet when most Bitcoin L2s did not.

• Technical proof is done. The remaining challenge is giving EVM ecosystem users a reason to use the same services on Bitcoin. Aggressive user acquisition is next.

1. L2 Skepticism vs. Citrea: Why Thiel Chose the Latter

Bitcoin’s market cap has surpassed $2 trillion. Yet when asked what that capital actually does, the answer is unclear. “Put this capital to work. Leverage Bitcoin’s security.” This was the recurring logic behind the Bitcoin L2 surge.

But of the dozens of projects born from that logic, few are meaningfully functioning today. The need was clear; the results were not.

Against this backdrop, Peter Thiel’s Founders Fund invested in Citrea, choosing a team capable of building the first ZK rollup on Bitcoin, rather than just another marketing hook. It was a high-conviction bet on the technical frontier of Bitcoin L2s, made precisely when the broader market had grown most skeptical.

2. Why Thiel Chose Citrea

Founders Fund has a track record of betting on unique technologies where others won’t. LPs called the SpaceX investment “crazy.” A Kleiner Perkins partner walked out of the Palantir pitch. The Citrea investment follows this same pattern of technical conviction.

While much of the Bitcoin L2 category focused on marketing over-engineered sidechains, Citrea focused on the “Zero to One” problem, actually bringing zero-knowledge technology to Bitcoin. When sentiment toward Bitcoin L2 was at its lowest, Founders Fund made their move.

For partner Joey Krug, Citrea represented “the strongest team and technical architecture in the Bitcoin L2 space.”

As the firm’s first-ever investment in the Bitcoin ecosystem, the move wasn’t about following a trend; it was about backing the only design that allows Bitcoin’s $2 trillion in capital to finally become programmable.

2.1. A Team That Proved Its ZK Credentials

Before building on Bitcoin, the team shipped “Proof of Innocence.“ In 2022, the U.S. Treasury sanctioned Tornado Cash for money laundering. The collateral damage was immediate. Innocent users with no connection to illicit activity were treated the same.

The team used ZK proofs to let users demonstrate their wallet had no ties to sanctioned addresses without revealing their identity. RAILGUN DAO integrated the protocol. Vitalik Buterin cited it publicly.

None of the founders came from big tech or marquee protocols. But they shipped a ZK product that worked in production and earned external validation. Founders Fund’s “best team” assessment was not without basis.

2.2. Using ZK to Solve Bitcoin L2’s Core Problem

Citrea leverages ZK technology to clear Bitcoin L2’s core hurdle, using Bitcoin’s actual security while running services on top of it.

Most Bitcoin L2s assign security to a small group of signers. Think of a vault shared by five keyholders where any three can authorize a withdrawal. The model is fast and practical. But it does not fully inherit Bitcoin’s security. It relies on the honesty of a few.

Most Bitcoin L2s have not departed significantly from this structure. Design details vary, but the dependency on a small signer group remains consistent across the space.

Citrea builds a 1-of-N system, where only one honest participant is required. To illustrate: when a user attempts to withdraw Bitcoin from Citrea, four roles govern the process.

• Signers: Lock the withdrawal conditions cryptographically before any request is made. Conditions are immutable once set, preventing Operators from manipulating exits.

• Operators: Can only process withdrawals within Signer-defined limits. Must post collateral upfront and submit cryptographic proof of validity to reclaim it.

• Watchtowers: Monitor Citrea and Bitcoin simultaneously. If an Operator attempts fraudulent withdrawal, Watchtowers capture evidence and pass it to Challengers.

• Challengers: Use Watchtower evidence to invalidate the fraudulent withdrawal on Bitcoin. Operator collateral is seized upon confirmed fraud.

If any one of these four participants remains honest, the system holds. One challenge remains. Bitcoin’s base layer was not built for complex computation. How can cryptographic proof verification and dispute resolution function on top of it?

ZK technology and BitVM make this possible. They enable cryptographic proof verification and dispute resolution directly on Bitcoin. This unique technology is what Founders Fund bet on.

3. How Citrea Actually Works

Here is how the architecture described above translates into practice. Three components drive the system.

1. ZK Rollup: compresses transaction data and posts them on Bitcoin

2. BitVM: enables optimistic Bitcoin-native verification

3. Clementine: Citrea’s BitVM-based Bitcoin bridge

3.1. ZK Proof: Thousands of Transactions, One Proof

Consider a notary office. Getting thousands of contracts notarized one by one takes time and money. Instead, a lawyer (Citrea) reviews all of them and submits a single certification stating “all of these contracts are valid.” The notary office (Bitcoin) only needs to review that one document. Fast, cheap, and the final record stays with the notary.

That certification is the ZK proof. Citrea processes thousands of transactions off-chain, generates a ZK proof via zkEVM, and records it on the Bitcoin base layer. Anyone running a Citrea and Bitcoin node can verify that Citrea’s state is correct.

3.2. BitVM: No Rule Changes Required

One problem remains. Bitcoin was not designed to verify complex ZK proofs. Its scripting language handles only basic transaction conditions. Running complex computation directly on Bitcoin is close to impossible.

Citrea solves this with BitVM. Think of it as an appeals window inside the notary office. Under normal operation, ZK proofs are accepted as submitted. If someone challenges a proof as invalid, Bitcoin steps in to verify directly. Computation runs only when there is a dispute, not by default. Bitcoin’s consensus rules remain untouched.

3.3. Clementine: One Honest Actor Is Enough

The bridge is the weakest point in any Bitcoin L2. If funds are stolen in transit between Bitcoin and Citrea, the entire architecture becomes irrelevant. Citrea’s bridge, Clementine, approaches this differently.

The security model requires only one honest participant among N. If an operator attempts fraud, a Challenger initiates a challenge transaction directly on the Bitcoin Network using the header-chain proof published by a Watchtower, and the operator’s collateral is slashed. Funds cannot be stolen unless every participant is compromised simultaneously. Where a standard multisig bridge moves funds when 2-of-3 agree, Clementine keeps funds safe as long as even 1 honest participant is watching.

The result: attacking Citrea means attacking Bitcoin itself. That requires capturing more than half of the total hashrate to censor the challenge for the duration of the dispute window, a fundamentally different threat model from targeting a small signer group.

4. Citrea Today

Most projects run their TGE first and launch mainnet later. Testnet gives room for failure without consequence. The pattern is familiar: sell the vision, defer the technology. Mainnet is different. Real funds, real transactions, real accountability.

Citrea reversed the sequence. Mainnet launched before TGE, alongside cBTC (BTC bridged to Citrea)) and ctUSD (Citrea-native stablecoin), with live 40+ applications at launch. Among these, Satsuma, Signals, Zentra, Crest, and CellFi, are part of the Citrea Origins program, an initiative directly supported by the Citrea team.

Unlike most Bitcoin L2s, which focus on staking and yield, Citrea is directly supporting builders across DEX, prediction markets, money markets, privacy transactions, and payments.

The intent is clear: expand what a Bitcoin L2 can actually do and build real utility.

That said, Citrea remains in its early stages.

TVL stands at approximately $6M, and while the testnet campaign drew 33,000 participants, that momentum has not yet carried over to mainnet even with a new mainnet campaign. The network is less than three months old, and key services including Morpho vaults only recently launched.

Citrea’s long-term vision is to become the home of Bitcoin applications (₿apps), building an ecosystem that extends well beyond staking and yield. The ambition is clear, but user acquisition is still underway.

5. Design vs. Reality

Web3 is full of projects selling ideals. Decentralization. Censorship resistance. Financial sovereignty. Easy to nod along. Harder to open your wallet.

Citrea’s technical case is sound. A Bitcoin L2 should actually use Bitcoin’s security. $2 trillion in idle capital. ZK is the only path to get there. Founders Fund agreed, and Citrea shipped a mainnet. That separates it from projects that only talk.

The harder question comes next. Most Bitcoin holders are not uncomfortable. Holding works fine. “Built on Bitcoin” does not move the average user. Secure infrastructure is a necessary condition, not a sufficient one.

What Citrea needs now is not more technical proof. It needs to make the things users do on Arbitrum, on Base, work better on Bitcoin. That is the job of the Origins projects. DEX, money markets, privacy transactions, prediction markets. If those applications do not attract users, the infrastructure remains infrastructure.

The foundation is laid. The highway is built, the signals are up. Now the cars need to come. No matter how well the road is paved, without traffic it is just empty asphalt.

Citrea’s next challenge is not building a better road. It is finding the drivers.

🐯 More from Tiger Research

Read more reports related to this research.

• Solstice Finance: A Crypto-Native Asset Management Platform

• KRW Stablecoin, The Time for Execution

• Mawari: Infrastructure for XR and Virtual IP

Disclaimer

This report was partially funded by Citrea. It was independently produced by our researchers using credible sources. The findings, recommendations, and opinions are based on information available at publication time and may change without notice. We disclaim liability for any losses from using this report or its contents and do not warrant its accuracy or completeness. The information may differ from others’ views. This report is for informational purposes only and is not legal, business, investment, or tax advice. References to securities or digital assets are for illustration only, not investment advice or offers. This material is not intended for investors.

Terms of Usage

Tiger Research allows the fair use of its reports. ‘Fair use’ is a principle that broadly permits the use of specific content for public interest purposes, as long as it doesn’t harm the commercial value of the material. If the use aligns with the purpose of fair use, the reports can be utilized without prior permission. However, when citing Tiger Research’s reports, it is mandatory to 1) clearly state ‘Tiger Research’ as the source, 2) include the Tiger Research logo following brand guideline. If the material is to be restructured and published, separate negotiations are required. Unauthorized use of the reports may result in legal action.

Key Takeaways

• Solstice Finance goes beyond single-strategy DeFi yield by operating multiple strategies with varying risk-return profiles on one platform.

• The protocol currently runs eUSX and plans to roll out strcUSX and oUSX.

• The team includes members with traditional finance backgrounds, but it still needs to prove sustainable yield generation in crypto.

• In crypto, trust is built on on-chain transparency, not regulation or audits. The fact that eUSX’s yield structure and AUM are not fully disclosed is the first hurdle Solstice must clear.

🇰🇷 한국어로 읽기 →

1. A Management Platform Born in Crypto

In traditional finance, investors access a range of products through financial institutions. Products are segmented by asset class and leverage level, and investors choose based on their risk appetite. The institution designs, manages, and shares returns with investors.

DeFi has a similar structure: the vault. Investors deposit capital, and protocols manage it to generate yield.

However, most protocols offer only a single strategy. In TradFi terms, it is like a firm selling just one product. Investors have no way to adjust risk, and when market conditions shift, returns depend entirely on that one strategy.

Solstice Finance addresses this limitation by deploying multiple products within its vault platform (YieldVault), with its own trading desk executing each strategy directly.

Rather than a curator model that assembles external yield sources, a single team handles everything from strategy design to execution.

2. Investment Starts with USX

Understanding Solstice’s yield structure begins with USX.

USX is an overcollateralized settlement layer, designed to be 1:1 with the US dollar and serves as the access point for all yield strategies within the Solstice ecosystem. Just as investors must fund a brokerage account before buying financial products, USX plays the same role in Solstice.

USX is more than a simple deposit instrument. It is designed as base infrastructure that can connect not only to Solstice’s internal strategies but also to external DeFi applications. The structure allows various strategies to be layered on top.

When USX is deposited into the YieldVault, the yield mechanism activates. Depositors receive eUSX, a token representing their share of the yield generated by the underlying strategy. Returns are not paid out separately like interest. Instead, the value of eUSX itself appreciates over time.

This is a real-world yield strategy, being brought onchain through an LST - a liquid staking token.

Currently the vault operates a single delta-neutral strategy, but YieldVault is designed as a management platform capable of connecting multiple RWA yield strategies sequentially.

3. Solstice as an Evolving Management Platform

All Three strategies share one commonality: they run on USX. The difference lies in how yield is generated and the level of risk involved. eUSX is currently live; the remaining two strategies are in pre-launch.

3.1. eUSX: RWA Yield Strategy (Delta-Neutral)

eUSX is Solstice’s core yield product. The mechanism works as follows:

1. Deposit USX into YieldVault to receive eUSX.

2. Holding eUSX accrues yield. No additional eUSX enters the wallet; instead, the amount of USX redeemable per eUSX increases over time.

3. If 1 eUSX = 1 USX at the start, yield accumulation pushes it to 1 eUSX = 1.05 USX, then 1.10 USX. USX itself maintains its dollar peg.

4. eUSX functions as a Liquid Staking Token (LST), usable in lending, liquidity provision, and other DeFi activities.

This is what the user sees. However, eUSX’s yield structure is not fully verifiable on-chain in real time. To address this, Solstice partners with Accountable to provide external verification of collateralization ratios and solvency. Even so, the custodial framework and exchange risk management remain critical variables.

Solstice stores stablecoins (USDT/USDC) received through USX swaps with external custodians. Some custodians support mirroring: assets remain with the custodian while the corresponding balance is used as margin on exchanges.

Since the original assets stay with the custodian, funds are preserved even if an exchange becomes insolvent.

Through these accounts, Solstice executes its core delta-neutral strategy: holding spot longs and futures shorts simultaneously to offset price exposure, capturing funding rate payments in the process.

A structural limitation exists when negative funding rates persist, reducing returns. Solstice supplements this with tokenized treasury yields and staking as auxiliary strategies.

The product has accumulated $356.79M in TVL. However, the strategy itself is not unique and has been employed by other DeFi protocols. For Solstice to establish a distinct competitive edge, the differentiated strategies yet to be released must deliver meaningful differentiation in the market.

3.2. strcUSX: RWA Yield Strategy (Tokenized Corporate Credit)

struUSX is fundamentally different from the other three strategies. Rather than sourcing yield from crypto markets, it tokenizes exposure to a publicly listed company in traditional finance. specifically, it wraps preferred share exposure to strategy Inc. (formerly MicroStrategy), making it accessible within Solana DeFi.

The Rational: diversifying yield sources by blending RWA TradFi assets into a crypto native portfolio.

3.3. oUSX: DeFi Yield Strategy (Leverage)

oUSX carries the highest risk and the highest target yield among the Three strategies. It automates advanced DeFi strategies including looping (repeated borrow-deposit cycles to amplify yield), recursive lending, concentrated liquidity provision, yield stacking, and peg arbitrage.

If eUSX is a market neutral fixed deposit, oUSX is closer to a leveraged high-risk investment product.

4. Execution Capability as Competitive Edge

strcUSX, and oUSX are all in pre-launch, and their specific execution structures are subject to change.

Solstice’s long-term vision is to layer multiple yield strategies on top of a single protocol. But no matter how diverse the strategies, they are meaningless without proven returns. Since much of the strategy execution occurs off-chain, the capability of the team designing and executing these strategies is effectively the protocol’s competitive edge.

Investment management is handled directly by Solstice’s in-house trading desk. A single team handles everything from strategy design to execution with no external outsourcing. In practice, vault curators like RockawayX are incorporating Solstice’s yield strategies into their own curated vaults. While many vaults source yield externally, Solstice is the source being sourced.

The desk is led by CIO Stuart Connolly, who managed treasury operations and portfolio management at large hedge funds including BlueCrest Capital and Oceanwood Capital. His experience spans swaps, repos, and margin management, areas directly relevant to the delta-neutral strategies Solstice employs.

The rest of the team is composed of professionals from global investment banks, hedge funds, and institutional-grade digital asset exchanges.

Solstice’s trading desk is not a crypto-native team that learned traditional finance. It is closer to a traditional finance hedge fund desk that migrated into digital assets.

Experience alone does not guarantee returns. However, the team’s 36-month track record (annualized IRR of 13.96% and Sharpe ratio of 7.05 as of September 2025) offers tangible evidence of performance.

Over a longer operating period, IRR adjusted to 13.8% and Sharpe ratio to 6.6, demonstrating that returns shift alongside changes in funding rate conditions.

Whether these figures hold across varying market environments requires ongoing validation.

5. The Bull Case for Solstice

The bull case for Solstice is a scenario in which USX becomes core infrastructure for Solana DeFi, with diverse strategies and external apps connecting on top, expanding across the broader ecosystem.

Solana DeFi is growing rapidly, but there is no clear precedent for a platform that manages multiple yield strategies under one roof. If USX fills this gap, partner DeFi apps will naturally adopt USX and USX-based products, driving ecosystem expansion. Infrastructure comes first, services build on top, and as services accumulate, USX’s utility widens.

Three conditions must be met for this scenario to materialize:

1. The partner ecosystem must translate into real liquidity inflows. Liquidity integrations are already in place with major Solana DeFi protocols including Raydium, Orca, and Marinade, and total partners now exceed 50. Whether this drives actual SLX demand remains to be confirmed.

2. Additional strategies must launch on schedule. The management platform thesis is only complete when strcUSX, and oUSX generate real market demand.

3. The track record must hold. As the number of partners grows, maintaining stable liquidity on secondary markets becomes an increasing challenge.

If all three conditions are met, USX becomes the default financial layer for liquidity entering Solana. As the Solana ecosystem grows, capital flowing through USX scales with it, and the yield strategies built on top expand accordingly. Solstice’s value will ultimately be determined not by individual strategy returns, but by how much liquidity passes through the platform.

Whether these three conditions are fulfilled one by one will be the benchmark for evaluating the bull case.

🐯 More from Tiger Research

Read more reports related to this research.

• KRW Stablecoin, The Time for Execution

• Retail Investor Landscape Across 9 Asian Markets

• Mawari: Infrastructure for XR and Virtual IP

Disclaimer

This report was partially funded by Solstice Finance. It was independently produced by our researchers using credible sources. The findings, recommendations, and opinions are based on information available at publication time and may change without notice. We disclaim liability for any losses from using this report or its contents and do not warrant its accuracy or completeness. The information may differ from others’ views. This report is for informational purposes only and is not legal, business, investment, or tax advice. References to securities or digital assets are for illustration only, not investment advice or offers. This material is not intended for investors.

Terms of Usage

Tiger Research allows the fair use of its reports. ‘Fair use’ is a principle that broadly permits the use of specific content for public interest purposes, as long as it doesn’t harm the commercial value of the material. If the use aligns with the purpose of fair use, the reports can be utilized without prior permission. However, when citing Tiger Research’s reports, it is mandatory to 1) clearly state ‘Tiger Research’ as the source, 2) include the Tiger Research logo following brand guideline. If the material is to be restructured and published, separate negotiations are required. Unauthorized use of the reports may result in legal action.

For the past year, KRW stablecoin discourse focused on regulatory “What” (issuers, reserves). The priority must now shift to technical “How”: moving beyond who initiates the market to how to sustain it operationally.

Access the Full Report 🔍

From Initiation to Execution: Shifting the Focus from “Who” to “How”

• Since the KRW stablecoin was formalized as a presidential pledge in June 2025, over eight related bills have been introduced to the National Assembly, making its issuance a fait accompli.

• The critical challenge is speed. While domestic discussions stalled, USD stablecoins captured over 99% of the global market. Moving beyond repetitive discourse, it is time to pivot the conversation: the priority is no longer who will initiate the market, but how to ensure its operational success.

A Year of Discourse: Defining the Regulatory “What”

• Between July 2025 and February 2026, the National Assembly and academia convened over seven major forums. Discussions focused predominantly on issuing entities, reserve asset requirements, and oversight authority.

• While specific conclusions varied by event, the underlying trajectory remained consistent: “What”

Beyond the Framework: What Regulations Leave Unspoken

• Discussions over the past year have remained confined to three primary pillars: issuing entities, oversight authority, and risk warnings. Crucially, the actual operational mechanics were never on the official agenda.

• The decision to authorize issuance is merely the starting point. Without a framework for practical execution, even the most robust regulations remain nothing more than static documentation.

Access the Full Report 🔍

Disclaimer

This report was partially funded by Kaia. It was independently produced by our researchers using credible sources. The findings, recommendations, and opinions are based on information available at publication time and may change without notice. We disclaim liability for any losses from using this report or its contents and do not warrant its accuracy or completeness. The information may differ from others’ views. This report is for informational purposes only and is not legal, business, investment, or tax advice. References to securities or digital assets are for illustration only, not investment advice or offers. This material is not intended for investors.

Terms of Usage

Tiger Research allows the fair use of its reports. ‘Fair use’ is a principle that broadly permits the use of specific content for public interest purposes, as long as it doesn’t harm the commercial value of the material. If the use aligns with the purpose of fair use, the reports can be utilized without prior permission. However, when citing Tiger Research’s reports, it is mandatory to 1) clearly state ‘Tiger Research’ as the source, 2) include the Tiger Research logo following brand guideline. If the material is to be restructured and published, separate negotiations are required. Unauthorized use of the reports may result in legal action.

Key Takeaways

• Virtual IP industries leveraging XR have grown significantly. But even as AR/XR devices advance, the infrastructure connecting content to devices remains underdeveloped.

• Over 8 years, Mawari built a system that streams 3D content at the object level, splits rendering between device and server, and executes on the nearest GPU node.

• The Guardian Node license sale succeeded even without a token, proving that the infrastructure holds value on its own.

• Not waiting for XR adoption. Mawari drives demand through its own platforms and commercial projects, betting on full market expansion.

🇰🇷 한국어로 읽기 →

1. Virtual IP Is Already Monetizing. The Problem Is Infrastructure.

Virtual idols and VTubers have already gone mainstream. Since Gorillaz won a Grammy in 2006, virtual performers have steadily entered everyday culture. Live virtual broadcasts are now widely accepted.

Korea and Japan lead this market. Korea’s virtual K-pop idols draw large audiences, while Japan has built the world’s most mature virtual ecosystem around Hololive and Nijisanji. Meanwhile, XR devices, led by Meta’s smart glasses, are regaining attention and driving new demand for XR technology.

The problem is that the technology and infrastructure to support this demand are not yet sufficient. Natural-looking virtual idol performances and seamless AR guidance through smart glasses both require real-time 3D rendering: every frame must be redrawn and delivered in sync with user movement.

Even a 0.1-second delay is unacceptable.

2. Mawari: Two Technologies Enabling Real-Time 3D

In 2017, Luis Ramirez (CEO), Aleksandr Borisov (CTO), and Takeo Yatabe (CBO) founded Mawari in Shibuya, Tokyo. Named after the Japanese word for “surroundings,” the Mawari team recognized the XR infrastructure gap early and has spent eight years solving it

• Engine: Streams interactive high-quality 3D content and offloads heavy rendering from the device to external GPUs.

• Network: Distributed GPU nodes near users execute rendering on their behalf.

The model works like an optimized delivery system. Heavy sorting is handled in advance at a central warehouse, and final delivery is dispatched from a nearby hub. The more efficient the warehouse, and the closer the hub, the faster the delivery.

Just as same-day delivery requires the warehouse and local hub to work in sync, real-time 3D experiences become possible only when the engine and network layers operate as a single integrated pipeline.

2.1. Engine: Rethinking Transmission and Splitting Rendering

The core of Mawari Engine is object streaming. Conventional methods send the entire rendered 3D scene to the user as a whole. Mawari takes a different approach: it selects and transmits only the relevant 3D objects, not the full scene.

Consider watching a virtual idol concert through AR glasses. The old method required resending the full frame of the entire scene, including stage, lighting, and character, every time the idol moved. It is like a video call retransmitting the full frame when only a hand moves.

Mawari’s Object Streaming works differently. The idol character is the only object needed to stream. The device assembles the scene locally. Since it is an AR experience the real world is the actual scene. Lighting is fully processed on the server side. When the idol raises an arm, only the changed motion data is sent. Lighting is applied on the object during the process on the server side.

When the user turns their head, the device recalculates the viewpoint from the objects it already holds, with no need to request anything from the server again.

On top of this, the engine’s internal codec dynamically compresses objects based on connection quality. On a strong network, it transmits at high fidelity. On an unstable connection, it increases compression. This ensures stable quality at minimal bandwidth in any environment.

Because overall transmission volume drops, bandwidth usage is reduced by approximately 80%.

Even with efficient object transmission, someone still has to render that 3D content. The question is where.

XR devices are evolving toward lighter form factors. As they approach the shape of ordinary glasses, like Meta’s smart glasses, onboard chip performance hits a ceiling. Pushing high-quality real-time 3D onto the device alone creates heat, battery, and weight problems.

Mawari’s engine solves this not by boosting device performance, but by splitting the rendering workload.

This is Split Rendering. The engine automatically determines the split based on content complexity. AR-specific and high-frequency tasks such as spatial recognition, head tracking, and final scene compositing stay on the device. Heavy tasks such as high-quality 3D character rendering, lighting and shadow computation, and real-time frame encoding run on edge GPUs.

The two outputs merge into a single user experience.

2.2. Network: Rendering Executed Close to Users

Even if the engine transmits objects efficiently and splits the rendering workload, none of it matters if the GPU is far from the user. Just as deliveries arrive faster from a nearby hub, GPUs must be physically close to users.

In XR, the time from a head turn to the corresponding frame reaching the user’s eyes must stay under 20ms. This is the threshold at which humans start getting discomfort and cybersickness. Anything slower causes a mismatch between display and body movement, producing dizziness and breaking immersion.

The problem is that existing large-scale cloud infrastructure struggles to guarantee this threshold globally. AWS and Google Cloud offer cloud rendering environments, but their data centers are concentrated in limited regions. Consistently maintaining sub-20ms latency for every user worldwide is difficult. The farther a user is from a data center, the wider the gap.

The solution is closing the distance. When GPUs sit in the same city or region, round-trip time drops and staying within 20ms becomes far more achievable.

This is why Mawari is building a globally distributed GPU node network, positioning compute resources near users rather than relying on a few centralized mega data centers.

Users do not connect to multiple nodes simultaneously. Mawari’s engine automatically selects the single most suitable node based on distance and network conditions. The user connects to that one node for rendering.

The engine streams 3D content at the object level and splits rendering. The network places the GPUs that execute that rendering close to users. These two layers combine into a single pipeline.

3. Node Design for Seamless Global Coverage

No matter how efficient the engine is, speed ultimately depends on how densely GPU nodes are deployed.

In April 2025, Mawari announced its DIO (Decentralized Infrastructure Offering) to begin scaling the network. By the time public sales launched in July of the same year, more than half of the total 300,000 nodes, roughly 180,000, had already been reserved, with $45 million in committed participation.

However, since coverage scales in proportion to the number of participating nodes, true global coverage remains a work in progress. The challenge is deploying more nodes, faster.

Mawari’s approach has two tracks. The first is to specialize node roles, optimizing performance while lowering the barrier to entry. The second is to design economic incentives that sustain continuous growth in node count.

3.1. Multi-Role Node Design for Performance Optimization

Network performance depends on node architecture. Most distributed infrastructure projects assign the same function to every node. but Mawari takes a different approach, dividing node roles into four types: rendering, verification, monitoring, and testing, so each can focus on its designated function.

The rationale is that different functions require different hardware.

Rendering demands high-performance GPUs, but verification and monitoring can run on standard CPUs. If every node had to perform every function, even simple verification tasks would require expensive GPU hardware.

Higher entry barriers reduce the participant pool and slow network expansion. By separating roles, participants without GPUs can still contribute to the network, ultimately accelerating coverage growth.

Role separation also improves stability. A failure in one function has limited impact on others, and roles experiencing high demand can be scaled independently.

Additionally, KDDI, one of Japan’s largest telecom carriers, is providing hosting environments directly to node operators. This gives individual participants access to more stable infrastructure for running their nodes.

3.2. Node Rewards Backed by Proven Revenue

Growing the node count requires participation incentives. Most distributed infrastructure projects solve this through token issuance. This attracts early participants, but when token prices fall, the real value of rewards falls with them. Network growth and rewards are structurally disconnected.

Mawari chose a different path. Since its founding in 2017, the company has completed over 50 commercial projects with clients including KDDI, Netflix, BMW, and T-Mobile over eight years without issuing a token, generating average annual revenue of $1.5 million.

The scale is modest for an infrastructure startup, but the significance lies in having validated real demand and a revenue structure before any token launch. This revenue structure became the foundation for node reward design.

Rewards follow two tracks. Early operator rewards allocate a portion of total token supply to initial participants to stabilize the network in its early phase. Network activity rewards distribute 20% of net network revenue to node operators.

The more the network is used, the more operators earn. Because rewards are tied to actual revenue rather than token issuance, the real value of rewards is sustained as the network grows.

4. Mawari Is Already Running Before the Market Opens

Most of Mawari’s technical challenges have been solved, positioning the Mawari Network as supply-ready ahead of demand. The remaining question is how quickly traffic and revenue will grow on top of this infrastructure.

The most direct variable is XR device adoption. In October 2025, Samsung launched Galaxy XR, co-developed with Google and Qualcomm, and Samsung and Google are also working on a smart glasses project with Gentle Monster. These are clear signals that major manufacturers are entering the XR market in earnest. However, consumer adoption speed is not a variable Mawari can control.

What Mawari can do is twofold: secure use cases ready to deploy the moment devices reach consumers, and build revenue streams beyond XR in parallel.

• ARAWA: A 3D spatial platform where virtual characters and fans meet in real time, take photos, create content, and live-stream. Accessible via smartphone, it generates network traffic even without XR devices.

• Osaka Expo AI Guide: A 3D AI guide appears in front of visitors wearing AR glasses and provides real-time guidance. This also serves as a live environment for validating network performance with actual users.

• Digital Human Aiko: Built with KDDI using AWS Wavelength and 5G, demonstrating real-time streaming capabilities on telecom infrastructure.

A project that has infrastructure in place before the market fully opens is positioned to capture demand first when it arrives. Mawari has already completed that preparation.

5. Mawari: The Missing Piece of XR and Spatial AI Infrastructure

Mawari in one sentence: the infrastructure layer for XR and spatial AI, built over eight years ahead of the market.

Mawari is actively developing technology and expanding infrastructure. Growth of the XR device market is Mawari’s single biggest external variable. Devices must reach consumers before traffic flows through the infrastructure. But Mawari is not simply waiting for that market to open.

Through ARAWA, Mawari is already creating 3D experiences where virtual characters and fans meet. With the Osaka Expo and KDDI collaborations, it is securing real users in live environments. By building traffic that runs without XR devices first, Mawari is creating a structure ready to scale the moment device adoption accelerates.

The core question for this project comes down to one thing: when the XR market opens, will Mawari’s infrastructure be ready? If it is, Mawari captures demand first. If it is not, that position goes to a competitor.

Mawari has bet on laying the groundwork before the market arrives.

🐯 More from Tiger Research

Read more reports related to this research.

• IoTeX: Where Physical Reality Meets Artificial Intelligence

• Nesa: Why Everyday AI Needs Privacy

• Moonbirds: From NFTs to the Next “Pop Mart”

Disclaimer

This report was partially funded by Mawari Network. It was independently produced by our researchers using credible sources. The findings, recommendations, and opinions are based on information available at publication time and may change without notice. We disclaim liability for any losses from using this report or its contents and do not warrant its accuracy or completeness. The information may differ from others’ views. This report is for informational purposes only and is not legal, business, investment, or tax advice. References to securities or digital assets are for illustration only, not investment advice or offers. This material is not intended for investors.

Terms of Usage

Tiger Research allows the fair use of its reports. ‘Fair use’ is a principle that broadly permits the use of specific content for public interest purposes, as long as it doesn’t harm the commercial value of the material. If the use aligns with the purpose of fair use, the reports can be utilized without prior permission. However, when citing Tiger Research’s reports, it is mandatory to 1) clearly state ‘Tiger Research’ as the source, 2) include the Tiger Research logo following brand guideline. If the material is to be restructured and published, separate negotiations are required. Unauthorized use of the reports may result in legal action.

🇰🇷 한국어로 읽기 →

Digital Assets: From “Why” to “How”

The global financial landscape is already shifting.

PayPal issued PYUSD, a dollar-pegged stablecoin, and integrated it into its payment services. BlackRock launched BUIDL, a tokenized money market fund, surpassing $3B in AUM. JP Morgan, Fidelity, and Goldman Sachs followed. Wall Street, which was watching from the sidelines just two to three years ago, is now entering the market directly.

The reason is simple: structural inefficiency in legacy finance. Every transaction carries intermediary fees. Settlement takes days. When markets close, trading stops. Digital assets change this at a fundamental level. Lower cost, faster speed, no time constraints. The result is a more flexible, scalable market. Digital assets are no longer a question of “why” but “how.”

But “how” is harder than it looks. When finance shifted online, the challenge was not the technology. It was maintaining trust and control in a new environment. Same applies here. Issuance, custody, transfer, settlement must operate reliably on-chain, while integrating with legacy financial systems and regulation.

The core challenge is clear: make digital assets function as finance within the existing system. This report examines the key requirements and approaches financial institutions should consider when adopting digital assets.

Download Report NOW

1. A New Order in Global Finance

Digital assets have moved beyond speculation into an institution-led market. Institutional stance was long conservative, but accelerating regulation, led by the U.S., is shifting the view. Institutions now see digital assets as a new opportunity to explore and capture early.

This shift is most visible in the actions of major financial institutions. BlackRock, for example, did not stop at tokenizing its money market fund. It began enabling trading of the fund on UniswapX, a decentralized exchange. This signals that global financial institutions now view digital assets not merely as investment products, but as new infrastructure capable of extending the functions and reach of traditional finance. It also marks a symbolic convergence, where digital assets and traditional finance are crossing into each other's domains and forming a single ecosystem.

The market itself is expanding rapidly. In 2025, annual stablecoin transaction volume reached approximately $33 trillion, a 72% increase year-over-year. The real-world asset (RWA) tokenization market surpassed $25 billion, with tokenized U.S. Treasuries alone accounting for $10 billion. Digital assets have reached a scale that institutions can no longer overlook.

2. What Digital Asset Infrastructure Requires

Digital assets are no longer a matter of choice. The question is how to adopt them. The starting point is a clear understanding of blockchain’s role and its limits. Blockchain is an effective ledger technology for securely recording and verifying transactions. Blockchain’s role is exactly that.

To function as financial infrastructure, separate operational systems for processing, managing, and controlling transactions must be built on top. Before adoption, financial institutions must first assess three areas: regulatory compliance, technical compatibility, and operational reliability.

2.1. Regulatory Compliance

| Key Question: Can blockchain-based transactions meet the regulatory requirements set by financial authorities?

Regulatory compliance is the first checkpoint for digital asset infrastructure. As digital assets enter regulated finance, they face the same obligations as traditional finance. Yet the environment in which these rules must apply is fundamentally different and still unfamiliar.

Regulations such as AML, FDS, and KYC remain fully in effect. The challenge is how to apply them. In traditional finance, real-name accounts allow consistent identification of counterparties and fund flows. On blockchain, transactions center on wallet addresses, where the link between address and actual user is not automatically visible. Identifying counterparties and tracing fund flows becomes significantly more complex.

The core of regulatory compliance lies in whether blockchain-based transactions can be made identifiable and manageable within existing regulatory frameworks, so that counterparties and fund flows remain traceable and regulations enforceable.

2.2. Technical Compatibility

| Key Question: Can legacy back-office operations and blockchain-based transactions connect within a single workflow?

For digital assets to function as financial infrastructure, blockchain-based transactions must be processed within existing back-office workflows. They cannot operate in isolation from legacy systems.

The challenge is that blockchain operates outside the internal systems of financial institutions. The two environments record and process transactions differently. Blockchain data is not structured in a format that legacy systems can directly read. Data structures and interpretation methods also vary across networks. As the number of supported chains grows, integration scope and operational complexity increase in parallel.

Technical compatibility depends on whether blockchain data can be transformed into formats that existing systems process, and whether on-chain transactions can be embedded into institutional workflows. Issuance, settlement, and clearing must flow seamlessly between legacy back-office and blockchain-based operations.

2.3. Operational Reliability

| Key Question: Can blockchain infrastructure operate at the reliability level financial services demand?

Operational reliability matters because digital asset services run on infrastructure that operates 24/7/365. In traditional finance, fixed operating hours and scheduled maintenance served as natural buffers. On blockchain, even minor delays or outages can lead directly to transaction delays and erosion of institutional confidence.

The challenge is that blockchain-based services do not simply process transactions. Data collection, transaction processing, and system integration occur simultaneously. A failure in any one component can affect the entire service. Transaction delays, data gaps, or network outages can cascade into settlement errors or reporting failures.

Reliability is not just uptime. It requires maintaining transaction continuity, data consistency, incident response capability, and security controls together. Digital asset infrastructure must go beyond connection. It must sustain that connection as a stable, production-grade service.

3. Lambda256: Unified Financial Middleware for Digital Asset Adoption

As discussed, the core challenge of digital asset adoption is enabling blockchain-based transactions to be processed and managed within existing financial systems. Lambda256 provides unified financial middleware for this purpose. A blockchain technology subsidiary of Dunamu, operator of Upbit, Lambda256 has built a unified technology stack for digital asset adoption, backed by large-scale infrastructure operations and extensive PoC experience.

Lambda256’s technology stack consists of two layers: Onchain Access and Offchain Control. Onchain Access collects and refines data and transactions from multiple blockchains into formats that existing systems can use. Offchain Control processes and manages them within traditional financial operations. The core of this architecture is connecting blockchain transactions into institutional workflows.

By delivering these capabilities as middleware, Lambda256 enables financial institutions to adopt digital asset infrastructure by integrating it with existing systems. Institutions can leverage on-chain advantages while maintaining operations and controls within their current framework, reducing infrastructure burden and allowing greater focus on core business.

3.1. Onchain Access

Onchain Access refers to the foundation for reliably connecting to blockchain networks, retrieving necessary data, and processing transactions. Basic functions such as balance inquiries, transaction status checks, and asset transfers all depend on this layer.

However, onchain access is not simply a matter of connecting to a blockchain. While on-chain data is public, it is not structured in a form that existing systems can directly read and use. Checking a specific wallet’s balance or asset status requires retracing related transactions and assembling the needed information. This burden grows as data structures differ across networks.

Nodit is an institutional-grade blockchain data infrastructure built to solve this. It collects and processes data from multiple blockchain networks and delivers it in formats that existing systems can immediately use. Financial institutions can leverage on-chain data within their systems without operating complex nodes or handling raw data processing.

Processing stability is equally critical. Digital asset services operate continuously, and any disruption in data retrieval or transaction verification leads directly to service delays and operational overhead.

Nodit maintains stable processing under heavy traffic through its Elastic Node architecture, which auto-scales nodes based on traffic volume, and its HyperNode engine, which distributes requests across multiple nodes. Combined with 24/7/365 monitoring, automated failover, dedicated node support, and SOC 2 Type 2 certification, this provides a trusted access foundation for financial institutions.

Among Korea’s top five digital asset exchanges, Upbit, Coinone, and Korbit operate on Nodit’s infrastructure. Daily API requests exceed 100 million, with approximately 1,700 active nodes. This demonstrates capacity in environments that demand high-volume traffic handling and operational stability.

The onchain access layer extends beyond data retrieval. The data and transaction information secured at this stage serve as a shared foundation for downstream functions including issuance, settlement, clearing, and compliance, all operating within the same architecture. Financial institutions can extend digital asset services incrementally by integrating required functions into existing systems and workflows, rather than building separate infrastructure for each.

3.2. Offchain Control

Establishing onchain access does not complete a digital asset service. An additional step is needed to connect on-chain transaction results and status data into traditional financial workflows. Blockchain transactions must be processable within existing operational procedures and internal controls to function as financial services. Offchain Control serves this role.

The core of offchain control is incorporating blockchain transactions into existing financial operations. SCOPE manages issuance, distribution, settlement, and clearing within a single structure, connecting blockchain-based transactions to traditional back-office workflows. Importantly, this does not require full replacement of existing systems. Institutions can integrate required functions into current workflows incrementally.

Incorporating transactions into operations is not sufficient. Institutions must also interpret the context and risk of each transaction. CLAIR analyzes fund flows and identifies risk signals. It maps wallet relationships through an ontology-based knowledge graph and reads transaction pattern context, enabling tracing beyond simple anomaly detection to the full flow of funds.

This capability is validated in practice. Over ten overseas law enforcement agencies and exchanges have adopted CLAIR as a white-label solution for their own analytical tools. Domestic partnerships with security, audit, and regulatory solution providers continue to expand.

Alongside transaction monitoring, counterparty verification is also required. VerifyVASP handles this function. For financial institutions to manage on-chain transactions within existing controls, they must verify not only fund flows but also counterparty information. This enables institutions to manage counterparty risk consistently, regardless of specific regulatory mandates.

The core of offchain control is making on-chain transactions manageable within traditional financial operations and controls. Transaction execution, fund flow interpretation, and counterparty verification must connect within a single structure for digital asset services to function as financial services. Institutions can maintain existing systems while integrating required functions incrementally.

4. Key Digital Asset Adoption Scenarios

Digital asset adoption does not follow a single path. Banks, card companies, and securities firms each approach adoption differently based on their business objectives and operational structures. Infrastructure requirements and priorities vary accordingly. The following sections examine major scenarios by sector, identifying the challenges that arise and how they can be addressed.

4.1 Stablecoin Payment Adoption

Assume a major domestic card company, TigerPay, introduces stablecoin payments for foreign visitors.

As inbound tourism grows, the limitations of existing payment infrastructure become clearer. Cross-border card transactions incur intermediary fees and exchange rate margins, and merchant settlement takes time. Tourists also bear the cost of currency conversion and opaque exchange rates. To reduce this friction, TigerPay aims to accept direct payments in dollar-based stablecoins from tourists, while merchants receive settlement in KRW or KRW-pegged stablecoins.

Offline payment is relatively straightforward. When a domestic merchant initiates a payment, SCOPE generates a one-time payment address and delivers it to the tourist as a QR code. The tourist sends stablecoins from their wallet to that address. Once confirmed, the merchant provides the goods or service. The merchant is then settled in fiat or KRW stablecoins. Tourists pay with familiar digital assets, and merchants maintain their existing settlement process.

Online payment differs structurally. Because delivery and potential refunds occur between order and settlement, funds need to be held rather than transferred immediately to the seller. When a user initiates payment, VerifyVASP performs KYC, and funds are deposited into SCOPE’s escrow structure. Once predefined conditions such as delivery confirmation are met, settlement proceeds. If a refund is required, funds are returned to a pre-designated refund address. This enables payment, settlement, and refund to be handled within a single flow, even for online transactions.

4.2 Security Token Issuance Platform

Assume a domestic securities firm, Tiger Securities, tokenizes a commercial real estate fund.

As security token regulation takes shape, building STO platforms has become a practical priority for securities firms. Tiger Securities aims to tokenize an existing commercial real estate fund to open it to smaller investors. Under the current structure, minimum investment thresholds are high, redemptions take time, and transferring shares between investors involves complex procedures. Tokenization transforms this into a structure that enables smaller-denomination issuance and more flexible trading.

The core challenge lies not in issuance itself, but in post-issuance management. Security tokens are classified as securities, requiring lifecycle-wide controls over holding eligibility, trading conditions, and transfer restrictions. SCOPE provides the foundation for this lifecycle management. It structures functions such as issuance, supply management, redemption, burn, and transfer restrictions as modules. Policies like whitelist-based investor restrictions and transfer blocks during lock-up periods can also be configured.

For this structure to become an operational service, data integration and regulatory response must also be in place. Nodit synchronizes on-chain data such as token balances, dividend records, and transaction histories with existing securities systems in real time. CLAIR tracks fund flows and monitors for anomalous transactions. VerifyVASP handles investor KYC and counterparty identity verification. At the dividend and redemption stages, SCOPE’s batch disbursement function enables efficient fund distribution to investors.

This structure is not limited to a single product. Whether the tokenized asset is bonds, private equity, or commodities, the same infrastructure for issuance, management, and regulatory compliance applies. The platform Tiger Securities builds is not a one-time system for a single product, but a scalable foundation capable of supporting a range of security tokens.

5. Conclusion

The shift has already begun. What creates the gap in digital asset infrastructure is no longer whether blockchain technology has been adopted. What matters is whether blockchain-based transactions can actually work within the operations and controls of existing finance. The challenges financial institutions face ultimately converge on three areas: regulatory compliance, technical compatibility, and operational reliability.

Lambda256 offers a unified financial middleware solution to address these challenges. Nodit delivers blockchain data in formats existing systems can use. SCOPE connects the issuance, transfer, and settlement of assets. CLAIR and VerifyVASP complement control and regulatory response through transaction flow analysis and counterparty verification. The significance of this architecture is not in listing individual functions, but in enabling financial institutions to integrate digital asset capabilities into existing workflows incrementally.

This framework is not a finished answer to digital asset infrastructure. As regulation and markets evolve rapidly, regulatory alignment, system integration, and operational reliability must continue to be refined and validated through real-world application. Still, collaboration with institutions such as the Credit Finance Association of Korea and Korea Securities Depository demonstrates that this approach is not a concept on paper but one being reviewed and tested in actual financial environments.

Ultimately, the gap in digital asset infrastructure is not determined by who adopted new technology first, but by who can design it into an operable structure within the existing financial system and execute a stable transition.

Download Report NOW

Disclaimer

This report was partially funded by Lambda256. It was independently produced by our researchers using credible sources. The findings, recommendations, and opinions are based on information available at publication time and may change without notice. We disclaim liability for any losses from using this report or its contents and do not warrant its accuracy or completeness. The information may differ from others’ views. This report is for informational purposes only and is not legal, business, investment, or tax advice. References to securities or digital assets are for illustration only, not investment advice or offers. This material is not intended for investors.

Terms of Usage

Tiger Research allows the fair use of its reports. ‘Fair use’ is a principle that broadly permits the use of specific content for public interest purposes, as long as it doesn’t harm the commercial value of the material. If the use aligns with the purpose of fair use, the reports can be utilized without prior permission. However, when citing Tiger Research’s reports, it is mandatory to 1) clearly state ‘Tiger Research’ as the source, 2) include the Tiger Research logo following brand guideline. If the material is to be restructured and published, separate negotiations are required. Unauthorized use of the reports may result in legal action.

Key Takeaways

• AI now performs across most fields, but fails the moment it relies on fragmented, unverifiable external data.

• IoTeX has spent eight years building the unified infrastructure to close that gap, transitioning into a platform that supplies real-world data at scale through a three-layer stack of ioID, Quicksilver, and Realms.

• Trio is the first commercial product built on that stack, converting infrastructure into direct SaaS revenue through enterprise subscriptions.

• The 2026 investment thesis hinges entirely on execution: whether Trio can secure enterprise contracts and whether the Real-World AI Foundry can demonstrate production-grade model performance.

🇰🇷 한국어로 읽기 →

1. AI’s Real Problem: Not Intelligence, but Trustworthy Data

In 2025, AI has exceeded expectations across nearly every field.

OpenAI’s reasoning model achieved gold-medal-level scores at the International Mathematical Olympiad (IMO). GitHub Copilot now generates an average of 46% of developer code directly. AI agents independently handle email management, scheduling, and workflow automation.

“What can AI do?” is no longer the right question.

Inside a closed system, AI is already smart enough. Siemens, GE, and similar firms already run full sensor-to-model pipelines in-house.

The problem starts the moment AI crosses that boundary.

Consider autonomous vehicles. Onboard sensors alone can enable self-driving. But a precise system requires external data including traffic signals, pedestrian detection sensors, and weather stations. Only when thousands of such sources connect in real time does a truly reliable AV system become possible. Yet these sources are operated by different agencies, use inconsistent formats, and share no common standard for verifying data origin.

Companies like Waymo and Cruise have already taken on this challenge, building systems that aggregate diverse external sensor data at scale. But their approaches rely on proprietary stacks.

Sharing data with other AV operators or city infrastructure requires additional integration work. Even on the same road, systems remain incompatible.

No matter how capable the AI, fragmented data undermines accurate decision-making.

What’s needed is integrated infrastructure. Every device gets a verifiable identity. Scattered data is aggregated and delivered in AI-ready form, then organized by domain. This is precisely what IoTeX has built.

2. IoTeX: 8 Years of Infra, Now an AI Company

IoTeX spotted this problem in 2017.

During the ICO boom, most projects chased token sales. Connecting physical devices to blockchain was a fringe idea. Before the term ‘DePIN’ even existed, IoTeX began building on one conviction: physical devices would become core blockchain participants. The term “DePIN” did not emerge until late 2022, five years later.

After eight years of sustained infrastructure development, IoTeX has completed a full-stack DePIN platform.

It combines a high-performance L1 blockchain, a device identity protocol, off-chain data verification, and hardware deployments that prove the pipeline works in the real world.

In the process, IoTeX established global partnerships with Google Cloud, Samsung Next, and Nordic Semiconductor. IoTeX also led a blockchain-IoT standards working group at IEEE, building broader industry credibility. By the end of this period, registered smart devices reached approximately 960,000 and connected DePIN projects exceeded 400.

In 2025, IoTeX officially declared its expansion into a Real-World AI platform. The goal is clear: transform eight years of accumulated device networks and data pipelines into a platform that AI can consume in real time.

3. From Data Collection to AI Inference

IoTeX’s AI tech stack consists of three layers.

1. ioID (Verify Step: Device Identity Layer) issues blockchain-based digital IDs to physical devices like sensors and robots. Trust foundation for data provenance and integrity.

2. Quicksilver (Index Step: Data Processing Layer) aggregates sensor data from hundreds of networks, processes it into AI-readable formats, and delivers it.

3. Realms (Perceive Step: Contextual Knowledge Layer) layers domain-specific knowledge onto processed data so AI can reason beyond raw numbers.

ioID secures trust. Quicksilver delivers data. Realms provide context. Operating in sequence, these three layers convert raw physical-world sensor signals into actionable AI intelligence.

3.1. ioID: Giving Every Machine and Agent a Verified Identity

For AI to use real-world data, one problem must be solved first. Does this data actually come from the claimed device, and was it tampered with in transit? Data without a verifiable source is worthless to AI, regardless of volume.

The problem intensifies as billions of IoT devices generate data autonomously and AI agents make decisions and execute transactions based on that data. A single manipulated sensor reading can trigger a wrong AI judgment, which then drives real transactions and actions. Without provable identity for each device and agent, the trust foundation of the entire system collapses.

ioID is a decentralized device identity protocol that solves this. It assigns unique identities not only to physical devices such as sensors and robots, but also to AI agents themselves. Every data transmission carries the identity of its source. Without that identity, data is nothing more than numbers of unknown origin. With it, every byte becomes cryptographically traceable.

Consider a factory temperature sensor reading 89.6°F. Under ioID, the data includes metadata such as Sensor 17, Line 3, 14:23, January 15 2025. If an unregistered device spoofs a sensor at the same location, data without ioID is rejected as untrusted by the network.

ioID is not simply a labeling system. It is built on the W3C Decentralized Identifier standard. Each registered device is linked to a programmable smart wallet, which the device uses to sign its data and issue verifiable credentials. In effect, the device cryptographically proves it produced the data.

ioID does more than confirm data origin. A device with an identity can also be granted permissions to act. A warehouse sensor, for instance, can automatically trigger a cooling system when temperature thresholds are exceeded. AI agents can receive ioID as well, enabling them to assess conditions and execute responses autonomously, functioning as a kind of digital site manager.

Registered ioID instances on the IoTeX network now stand at approximately 97,000. As of August 2025, the figure was around 12,000, meaning nearly eightfold growth in under six months. A signal of accelerating demand from both device manufacturers and AI agent developers building on the network.

3.2. Quicksilver: The Unified Data and Inference Pipeline for Real-World AI Agents

Verified device identity alone does not mean AI can understand the real world.

Suppose an AI agent is asked, “Good afternoon for outdoor activities near Central Park?” It needs rainfall data from weather stations, PM2.5 from air quality sensors, and more. The problem is format fragmentation. Nubila stations send JSON (humidity, wind speed). Air quality sensors log CSV. The NWS API returns XML forecasts.

Having AI developers connect each of these networks manually is costly and inefficient. That is why Quicksilver was built. Launched in early 2025, this open-source framework unifies fragmented DePIN networks into a single pipeline, converting raw real-world data into structured context that AI agents can perceive, reason over, and act on.

1. Data Collection & Integration: Aggregates data from hundreds of DePIN networks and Web2 APIs into one access point. AI developers connect through a single API instead of building per-network integrations.

2. Standardization & Indexing: Converts JSON, CSV, XML, and other formats into one structured format AI models can process directly. Rainfall, PM2.5, and temperature forecasts all arrive in a unified schema.

3. Cryptographic Verification: Quicksilver nodes use ZK Proofs to confirm data integrity through the processing pipeline. Where ioID proves which device sent the data, this step proves the data reached AI without tampering.

Quicksilver’s role does not end at data transformation. Once data has been collected, standardized, and verified in one place, it becomes a form of validated data marketplace. When micropayment protocols such as x402 are integrated, AI agents can exchange data directly with automated settlement built in. This positions Quicksilver as a potential shared infrastructure layer for the agent economy.

Quicksilver alpha daily requests grew from around 200 to a peak of 2,000. Even at this early stage, daily usage has stabilized at roughly 400 requests on average over the past month, a signal that real-time data demand from AI agents is real.

3.3. Realms: Teaching AI the “Why” with Industry Knowledge

Collecting and connecting data is not enough. The same 90°F reading means entirely different things depending on the domain. In agriculture, it could signal crop stress. In manufacturing, it might be normal for the season, or an early indicator of equipment degradation.

For AI to understand “why,” it needs industry-specific context.

Realms is a domain-specific knowledge base that accumulates this context. Each domain gets its own Realm, with no cap on the number. Three types of data layer together within each Realm.

• Real-time physical data: Raw sensor and device output such as temperature, humidity, and traffic flow.

• Expert interpretation and tagging: Domain experts review raw data and label whether readings are normal or anomalous.

• Private data: Voluntarily contributed by individuals, such as electricity bills, vehicle maintenance logs, and medical records.

These three data types are not siloed. They stack within a single Realm and reinforce each other.

• A sensor sends “90°F.”

• Expert tagging adds “90°F in summer is normal for this factory.”

• Equipment maintenance records add another layer: “90°F, but no maintenance in 3 years, possible overheating precursor.”

As data layers thicken, the context available to AI deepens.

One caveat. Realms is currently in design and development and has not yet launched.

The scenarios above represent IoTeX’s target vision. Building industry-specific Realms with sufficient data and expert participation to generate meaningful intelligence will require significant time and ecosystem effort.

4. Trio: Real-Time Multimodal AI where the Vision Meets Revenue

Trio is IoTeX’s first direct answer to the question every investor asks: where’s the revenue? Built by MachineFi, IoTeX’s AI subsidiary, Trio is a real-time multimodal intelligence layer for video streams and the first commercial product built on the IoTeX stack.

Trio is a multimodal stream agentic product. Connect a live video feed, and AI analyzes what is happening in real time, returning natural language answers. Instead of human CCTV monitoring, users ask questions like “Anyone in the restricted zone?” or “Defects on the assembly line?” and get instant judgments.

Four-step workflow.

1. Connect: Link streams from YouTube Live, RTSP, and other sources.

2. Extract: AI models analyze video, audio, and sensor data, interpreting them in natural language.

3. Fuse: Insights from multiple sources are combined into a comprehensive judgment.

4. Action: Judgments route through webhooks or AI agent workflows to trigger real-world responses.

The rationale is simple. Sensors cannot be attached to everything, and video analysis offers the fastest deployment path. Existing CCTV cameras in large warehouses can be leveraged immediately.

The cost structure stands out technically.

VLMs typically charge per frame. For security cameras with minimal scene change, analyzing every frame wastes most of the budget. Trio applies motion pre-filtering to discard unchanged frames before AI analysis, reducing VLM API costs by 70 to 90% according to IoTeX. This pre-filtering draws directly from DePIN experience processing high-volume sensor data efficiently.

One caveat. Trio is not directly connected to the IoTeX blockchain today. It does not run on on-chain transactions or the $IOTX token.

It is effectively a standalone AI product built on capabilities from previous DePIN experiences, including real-time data processing, edge computing, and multimodal stream integration. Pricing follows a standard SaaS model with a free Basic tier, a $39/month Pro plan, and custom Enterprise pricing.

Trio’s strategic meaning for IoTeX is clear. Instead of depending solely on blockchain protocol fees, the company aims to generate real revenue through AI products.

Trio also serves as a demonstration that compresses IoTeX’s entire logic into a single product. It takes physical real-world data, processes it through eight years of accumulated DePIN infrastructure, and delivers the output as a commercial product that enterprises are paying for today.

5. What to Watch Going Forward

IoTeX has completed its infrastructure build. The 2026 investment thesis is not about whether the technology works. The L1, ioID, and Quicksilver are all live and growing.

The numbers confirm it. Over 42 million devices are registered across 433 DePIN apps by DePINscan metrics built by IoTeX, on-chain ioID registrations exceeded 33,000 as of January 2026, and the mainnet has run without a single instance of downtime since its 2019 launch. The technology is sufficiently proven.

One question remains: does this technical readiness translate into actual revenue? Two milestones will determine the answer: revenue conversion and ecosystem expansion.

5.1. Revenue Conversion

The problem is clear. Technical capability has not translated into revenue. Middleware is structurally difficult to monetize. It sits between layers, has no direct user touchpoint, and must remain low-cost to drive adoption. IoTeX was no exception.

Trio changes this revenue structure. Rather than remaining a middleware relay, IoTeX has effectively established an AI subsidiary and begun selling SaaS directly to end users. The revenue model has shifted from middleware fees to subscription.

Once subscription revenue reaches scale, a pathway opens to return that value to the $IOTX token ecosystem. Product revenue supports ecosystem value, creating a self-reinforcing cycle.

The risks are real. Trio is still early, and Google Cloud Vision and Amazon Rekognition already dominate the live video analytics market. That said, Trio’s positioning around data sovereignty and 70 to 90 percent cost reduction represents a meaningful differentiator. But enterprise sales cycles are long, and the market judges on results. Proof requires actual contracts, not narrative.

5.2. Ecosystem Expansion

Trio is the product-level pivot. The ecosystem-level move is the Real-World AI Foundry, launched at Token2049 Singapore in September 2025. The Foundry pools infrastructure, data, and compute from multiple companies to co-develop AI models. Vodafone brings telecom infrastructure, Filecoin provides decentralized storage, and IoTeX sits in between as the verification and coordination layer.

The target output is Real-World Models (RWMs). Conventional AI trains on static historical data. RWMs train on live sensor and device feeds, such as factory temperatures, traffic flow, and weather. Contributors who supply data or compute receive usage-based compensation.

The partner list is impressive, but the Foundry is still early-stage. Whether RWMs can reach production-grade performance is unproven. IoTeX’s re-rating as an AI infrastructure company depends on execution across both fronts, Trio on the product side and the Foundry on the ecosystem side.

🐯 More from Tiger Research

Read more reports related to this research.

• Fluent: Making Every VM a Lego Block

• Nesa: Why Everyday AI Needs Privacy

• Moonbirds: From NFTs to the Next “Pop Mart”

Disclaimer

This report was partially funded by IoTeX. It was independently produced by our researchers using credible sources. The findings, recommendations, and opinions are based on information available at publication time and may change without notice. We disclaim liability for any losses from using this report or its contents and do not warrant its accuracy or completeness. The information may differ from others’ views. This report is for informational purposes only and is not legal, business, investment, or tax advice. References to securities or digital assets are for illustration only, not investment advice or offers. This material is not intended for investors.

Terms of Usage

Tiger Research allows the fair use of its reports. ‘Fair use’ is a principle that broadly permits the use of specific content for public interest purposes, as long as it doesn’t harm the commercial value of the material. If the use aligns with the purpose of fair use, the reports can be utilized without prior permission. However, when citing Tiger Research’s reports, it is mandatory to 1) clearly state ‘Tiger Research’ as the source, 2) include the Tiger Research logo following brand guideline. If the material is to be restructured and published, separate negotiations are required. Unauthorized use of the reports may result in legal action.

Key Takeaways

• The performance war is over, and composability across VMs is the next frontier.

• Fluent’s Blended Execution puts EVM, SVM, and Wasm on one chain with no bridges.

• A good chain isn’t enough, so Fluent is building Prints, its own reputation layer, to prove it.

🇰🇷 한국어로 읽기 →

1. The Battle After Performance

Blockchain infrastructure competition began with performance: faster, cheaper, higher throughput. That race is now effectively over. Dozens of chains exist, and performance is sufficient for all but the most extreme financial services.

Looking back, blockchain’s biggest breakthroughs came not from performance but from composability. DeFi Summer 2020 is the clearest example. Lending was layered with swaps, then yield farming stacked on top.

The key insight was that apps could snap together like Lego.

But this composability only worked within a single VM. Ethereum’s Lego blocks could not be used on Solana, and Solana’s could not be used on Ethereum. This VM fragmentation is the constraint Fluent is explicitly designed to remove.

2. The Lego Fluent Dreams Of

Fluent is a project designed to eliminate the boundary between VMs. Its approach is called “Blended Execution”, running apps from different VMs together within a single chain.

To illustrate the current situation with the Lego analog. Ethereum Lego blocks are square, and Solana Lego blocks are round. Both are good blocks, but their specs are incompatible. Even if you want to combine a lending app built on Ethereum with a trading app built on Solana, they sit in separate boxes and cannot connect.

Fluent is the board that unifies these specs. As an Ethereum L2, it inherits Ethereum’s security while building a new execution environment on top. Architecturally, Fluent resembles other Ethereum L2s like Arbitrum or Base, until execution begins.

The difference is one thing. Inside Fluent, contracts written for EVM, SVM, and Wasm all live on the same chain, sharing the same state. Wasm (WebAssembly) was originally created to run high-performance programs in web browsers. It converts code written in various languages (Rust, C++, TypeScript, etc.) into a single common format.

Fluent uses Wasm to compile all contracts into a shared format called rWasm (reduced Wasm). Whether a block is square or round, it gets converted to the same spec, so everything can be freely combined on one board.

This means a Solidity app can directly call a function in a Rust app. No bridge, no message relay. It all executes within a single transaction. Fluent calls this “Blended Execution.”

Currently, blended execution between EVM and Wasm is live on testnet. SVM support has completed feature development and is in the optimization phase.

3. Proving It with Prints

BUT, does building a good chain automatically attract good apps?

In reality, NO.

Hyperliquid is a clear example. The team’s own perpDEX became one of crypto’s standout successes. The Web3 market looks quite different before and after Hyperliquid. Before, teams relied on grant programs to attract killer apps from external builders. After, the new formula became: build it yourself and prove it.

Following this shift, Fluent is building its own service called Prints. Prints is a tool that aggregates “reputation” scattered across the internet, verifying who is real and who is trustworthy. In simple terms, it is a reputation aggregator for the info-fi era, pulling together reputation scores from multiple platforms into one view.

It currently integrates Ethos trust scores, Kaito smart followers, and Talent Protocol builder scores in one place. Any single metric alone is vulnerable to gaming. But while one score can be manipulated, faking several at once is far more difficult.

For users, Prints serves as a Web3 reputation resume, proving credibility across domains on a single page. For builders, it is a reputation tool that can be directly integrated into their apps.

On top of Prints sits Fluent Connect, a service where builders can use Prints’ reputation data to find users matching specific criteria and distribute early access or token benefits through a feature called Perks. In short, it is a matching tool connecting builders with genuine users.

Third-party adoption is already emerging.

Vena Finance announced it will use Prints data to introduce reputation-based interest rates, offering better lending terms to higher-reputation users. The service has launched with approximately 40,000 sign-ups, and a builder API is under development.

However, since Prints aggregates external services, it lacks proprietary reputation signals of its own. To address this, Fluent has created an internal feedback score and plans to integrate additional signals such as prediction market performance, yield curator track records, and AI agent reputation over time.

4. Fluent’s Ecosystem

Prints is still in its expansion phase and needs time to become a complete reputation system. Fluent is not simply waiting. It is building its ecosystem by nurturing external builders in parallel. The vehicle for this is the Blended Builders Club (BBC), Fluent’s own accelerator.

Five teams were selected for the first cohort:

• Pump Pals: A social trading platform enabling community-driven trading experiences

• Sprout: An automated yield optimization platform that matches strategies to user risk profiles

• Buzzing: A prediction market platform where users create their own markets and bet on outcomes

• Yumi Finance: On-chain credit infrastructure that attaches credit scoring to crypto cards, enabling buy-now-pay-later

• Blend Money: An on-chain savings platform that automatically applies yield strategies and currency hedging when users deposit in local currency

Among these, PumpPals, Sprout, and Buzzing have already completed user testing on testnet. The testnet approach itself is worth noting. On most chains, testnets function as airdrop farming tools. Users repeat meaningless transactions expecting rewards, and teams mistake inflated metrics for real demand.

Fluent reframed the testnet’s purpose around feedback collection. User feedback is delivered directly to builder teams, who use it to improve their products. Users who provide quality feedback earn reputation scores in Prints, gaining priority for future benefits. Apps are not launched all at once but featured one at a time over several weeks, ensuring each team receives focused feedback.

Beyond BBC, additional ecosystem growth is emerging. Nerona is an on-chain asset management platform that bundles a mobile app, crypto card, stablecoin yield, and lending into one place. Previously, these functions were scattered across separate services, leaving capital idle. Nerona consolidates them so capital is always working.

When combined with Prints’ reputation data, it becomes possible to offer differentiated interest rates or service terms based on user trustworthiness. This aligns with the same direction as Vena Finance’s reputation-based interest rates introduced earlier.

5. The Picture Fluent Is Drawing

Fluent is building three things simultaneously.

First, the chain. Blended Execution enables EVM, SVM, and Wasm apps to be composed on a single chain. The technical direction is clear, and EVM-Wasm blended execution is already working on testnet. However, SVM integration is still in the optimization phase, and whether all three VMs run stably in a mainnet environment remains to be verified.

Second, Prints. The design of aggregating multiple reputation signals for cross-verification is compelling. One metric can be gamed, but faking several at once is far harder. That said, the number of integrated signals is still small, and most depend on external services. Whether Prints can reach the stage of generating and verifying reputation on its own is something to watch.

Third, the ecosystem. BBC is cultivating builders, and services like Vena Finance and Nerona are attempting to link reputation to financial terms. Most are still at an early stage or closer to concept, so how each service achieves real user acquisition will need to be observed.

Fluent is still early, but by designing chain, service, and ecosystem as a single integrated structure from the start, it sets expectations for what the completed picture could look like. Early execution has been demonstrated: blended execution works on testnet, and Prints-based services are beginning to attach.

In the last cycle, dozens of L2s launched, but most led with performance metrics alone and ended up as empty chains without users. Whether Fluent can break this pattern will be answered by real user numbers and on-chain activity after mainnet.

🐯 More from Tiger Research

Read more reports related to this research.

• Nesa: Why Everyday AI Needs Privacy

• Moonbirds: From NFTs to the Next “Pop Mart”

• Katana: A DeFi Chain With No Idle Capital

Disclaimer

This report was partially funded by Fluent. It was independently produced by our researchers using credible sources. The findings, recommendations, and opinions are based on information available at publication time and may change without notice. We disclaim liability for any losses from using this report or its contents and do not warrant its accuracy or completeness. The information may differ from others’ views. This report is for informational purposes only and is not legal, business, investment, or tax advice. References to securities or digital assets are for illustration only, not investment advice or offers. This material is not intended for investors.

Terms of Usage

Tiger Research allows the fair use of its reports. ‘Fair use’ is a principle that broadly permits the use of specific content for public interest purposes, as long as it doesn’t harm the commercial value of the material. If the use aligns with the purpose of fair use, the reports can be utilized without prior permission. However, when citing Tiger Research’s reports, it is mandatory to 1) clearly state ‘Tiger Research’ as the source, 2) include the Tiger Research logo following brand guideline. If the material is to be restructured and published, separate negotiations are required. Unauthorized use of the reports may result in legal action.

Key Takeaways

• AI is already part of daily life, but users overlook how their data passes through central servers

• Even CISA’s acting director unknowingly exposed classified documents to ChatGPT

• Nesa restructures this by transforming data before transmission (EE) and splitting it across nodes (HSS-EE) so no single party ever sees the original

• Academic validation (COLM 2025) and live enterprise deployment (P&G) give Nesa a head start

• Whether the broader market adopts decentralized privacy AI over familiar centralized APIs remains the key question

🇰🇷 한국어로 읽기 →

1. Is Your Data Safe?

In January 2026, Madhu Gottumukkala, Acting Director of CISA, the lead U.S. cybersecurity agency, uploaded sensitive government documents to ChatGPT simply to summarize and organize contract-related files.

The breach was not detected by ChatGPT or reported to the government by OpenAI. It was flagged by the agency’s own internal security systems, leading to an investigation for violating security protocols.

Even America’s top cybersecurity official was using AI routinely, to the point of uploading classified material.

We know. Most AI services store user input on central servers in encrypted form. But this encryption is reversible by design. Data can be decrypted and disclosed under valid warrants or emergency circumstances, and users have no visibility into what happens behind the scenes.

2. Privacy AI for Everyday Use: Nesa

AI is already part of daily life. It summarizes articles, writes code, and drafts emails. The real concern is that, as shown in the previous case, even classified documents and personal data are being handed to AI with little awareness of the risk.

The core problem is that all of this data passes through the service provider’s central servers. Even when encrypted, the decryption keys are held by the provider. How can users trust that arrangement?

User input data can be exposed to third parties through multiple channels: model training, safety reviews, and legal requests. On enterprise plans, organization admins can access chat logs. On personal plans, data can still be turned over under a valid warrant.

Now that AI is deeply embedded in everyday life, it is time to ask serious questions about privacy.

Nesa is a project designed to change this structure entirely. It builds a decentralized infrastructure that enables AI inference without entrusting data to a central server. User input is processed in an encrypted state, and no single node can view the original data.

3. How Nesa Solves This

Imagine a hospital using Nesa. A doctor wants an AI to analyze a patient’s MRI for tumors. With current AI services, the image is sent directly to OpenAI or Google servers.

With Nesa, the image is mathematically transformed before it ever leaves the doctor’s computer.

A simple analogy: suppose the original problem is “3 + 5 = ?” If you send it as is, the recipient knows exactly what you are calculating.

But if you multiply every number by 2 before sending, the recipient sees “6 + 10 = ?” and returns 16. You divide by 2 and get 8, the same answer as solving the original. The recipient performed the computation but never learned your original numbers were 3 and 5.

This is exactly what Nesa’s Equivariant Encryption (EE) does. Data is mathematically transformed before transmission. The AI model computes on the transformed data.

The user applies the inverse transformation and gets the same result as if the original data had been used. In mathematics, this property is called equivariance: whether you transform first or compute first, the final result is identical.

In practice, the transformation is far more complex than simple multiplication. It is tailored to the internal computation structure of the AI model. Because the transformation aligns with the model’s processing flow, accuracy is not compromised.

Back at the hospital, the doctor notices no difference. The workflow of uploading an image and receiving a result stays the same. What changes is that no node in between can see the patient’s original MRI.

Nesa goes one step further. EE alone prevents any node from viewing the original data, but the transformed data still exists in full on a single server.

HSS-EE (Homomorphic Secret Sharing over Encrypted Embeddings) splits even the transformed data.

Return to the analogy. EE was applying a multiplication rule before sending the exam sheet. HSS-EE tears that transformed sheet in half, sending the first part to Node A and the second part to Node B.

Each node solves only its own fragment. Neither can see the full problem. Only when both partial answers are combined does a complete result emerge, and only the original sender can perform that recombination.

In summary, EE transforms data so the original cannot be seen. HSS-EE splits even the transformed data so it never exists in one place. Privacy protection is layered twice.

4. Does Privacy Mean Slower Performance?

Stronger privacy means slower performance. This has been a long-standing rule in cryptography. Fully Homomorphic Encryption (FHE), the most widely known approach, is 10,000 to 1,000,000 times slower than standard computation. It is unusable for real-time AI services.

Nesa‘s Equivariant Encryption (EE) works differently. Returning to the math analogy, the cost of applying x2 before sending and ÷ 2 after receiving is minimal.

Unlike FHE, which converts the entire problem into a fundamentally different mathematical system, EE adds only a lightweight transformation on top of existing computations.

Performance benchmarks:

• EE: less than 9% latency increase on LLaMA-8B, with accuracy matching the original at over 99.99%.

• HSS-EE: 700 to 850 milliseconds per inference on LLaMA-2 7B.

On top of this, MetaInf, a meta-learning scheduler, optimizes efficiency across the network. It evaluates model size, GPU specifications, and input characteristics to automatically select the fastest inference method.

MetaInf achieved 89.8% selection accuracy and a 1.55x speedup over conventional ML-based selectors. It was published at the COLM 2025 main conference, providing academic validation.

The figures above are from controlled test environments. However, Nesa’s inference infrastructure is already deployed in real enterprise settings, confirming production-level performance.

5. Who Uses It and How

There are three ways to access Nesa.

First is the Playground. Users can select and test models directly on the web. No developer background is required. It allows hands-on experience with inputting data and viewing results per model.

It is the fastest path to see how decentralized AI inference actually works.

Second is the Pro subscription. At $8 per month, it includes unlimited access, 1,000 Fast Inference credits per month, custom model pricing controls, and featured page visibility for models.

This tier is designed for individual developers or small teams looking to deploy and monetize their own models.

Third is Enterprise. This is not a public pricing plan but a custom contract structure. It includes SSO/SAML support, selectable data storage regions, audit logs, granular access controls, and annual-commitment billing.

Pricing starts at $20 per user per month, but actual terms are negotiated based on scale. It is built for organizations integrating Nesa into internal AI pipelines, with API access and organization-level management provided through a separate agreement.

In short: Playground for exploration, Pro for individual or small-team development, Enterprise for organizational deployment.

6. Why a Token Is Needed

A decentralized network has no central administrator. The entities running servers and verifying results are distributed around the world. This raises a natural question: why would anyone keep their GPU running to process someone else’s AI inference?

The answer is economic incentive. In the Nesa network, that incentive is the $NES token.

The structure is straightforward. When a user requests AI inference, a fee is attached. Nesa calls this PayForQuery. It consists of a fixed fee per transaction plus a variable fee proportional to data size.

Higher fees receive priority processing, the same principle as gas fees on a blockchain.

The recipients of these fees are miners. To participate in the network, miners must stake a set amount of $NES. They put their own tokens at risk before being assigned work.

If a miner returns faulty results or fails to respond, a penalty is deducted from their stake. If they process accurately and quickly, they earn greater rewards.

$NES also serves as a governance tool. Token holders can submit proposals and vote on core network parameters such as fee structures and reward ratios.

In summary, $NES serves three roles: payment for inference requests, collateral and reward for miners, and participation rights in network governance. Without the token, nodes do not run. Without nodes, privacy AI does not function.

One point worth noting: the token economy depends on preconditions to function as designed.

Inference demand must be sufficient for miner rewards to be meaningful. Rewards must be meaningful for miners to stay. Miners must be sufficient for network quality to hold.

This is a virtuous cycle where demand drives supply and supply sustains demand, but getting that cycle started is the hardest phase.

The fact that enterprise clients like Procter & Gamble are already using the network in production is a positive signal. However, whether the balance between token value and mining rewards holds as the network scales remains to be seen.

7. The Case for Privacy AI

The problem Nesa is trying to solve is clear: change the structure in which user data is exposed to third parties whenever AI is used.

The technical foundation is solid. Its core encryption technologies, Equivariant Encryption (EE) and HSS-EE, originated from academic research. The inference optimization scheduler MetaInf was published at the COLM 2025 main conference.

This is not a case of simply citing papers. The research team directly designed the protocols and implemented them in the network.

Among decentralized AI projects, it is rare to find one that has had its own cryptographic primitives validated at the academic level and deployed them onto live infrastructure. The fact that Procter & Gamble and other major enterprises are already running inference on this infrastructure is a meaningful signal for an early-stage project.

That said, limitations are clear.

• Market scope: Institutional clients come first; retail users unlikely to pay for privacy yet

• Product usability: Playground feels closer to Web3/investment UX than everyday AI tools

• Scale validation: Controlled benchmarks ≠ production with thousands of concurrent nodes

• Market timing: Demand for privacy AI is real, but demand for decentralized privacy AI is unproven; enterprises still default to centralized APIs

Most enterprises are still accustomed to centralized APIs, and the barrier to adopting blockchain-based infrastructure remains high.

We live in an era where even the head of U.S. cybersecurity uploaded classified documents to AI. Demand for privacy AI already exists and will only grow.

Nesa has academically validated technology and live infrastructure to meet that demand. There are limitations, but its starting position is ahead of other projects.

When the privacy AI market opens in earnest, Nesa will be among the first names that come up.

🐯 More from Tiger Research

Read more reports related to this research.

• Moonbirds: From NFTs to the Next “Pop Mart”

• Katana: A DeFi Chain With No Idle Capital

• Magic Eden: From NFT Marketplace to Crypto Entertainment

Disclaimer

This report was partially funded by Nesa. It was independently produced by our researchers using credible sources. The findings, recommendations, and opinions are based on information available at publication time and may change without notice. We disclaim liability for any losses from using this report or its contents and do not warrant its accuracy or completeness. The information may differ from others’ views. This report is for informational purposes only and is not legal, business, investment, or tax advice. References to securities or digital assets are for illustration only, not investment advice or offers. This material is not intended for investors.

Terms of Usage

Tiger Research allows the fair use of its reports. ‘Fair use’ is a principle that broadly permits the use of specific content for public interest purposes, as long as it doesn’t harm the commercial value of the material. If the use aligns with the purpose of fair use, the reports can be utilized without prior permission. However, when citing Tiger Research’s reports, it is mandatory to 1) clearly state ‘Tiger Research’ as the source, 2) include the Tiger Research logo following brand guideline. If the material is to be restructured and published, separate negotiations are required. Unauthorized use of the reports may result in legal action.

Key Takeaways

• After acquiring Moonbirds, Orange Cap Games announced plans to issue a token and expand the broader ecosystem.

• To position the Moonbirds IP around fandom rather than speculation, the team is introducing multiple engagement formats, including a card game, Blind Box 2.0 initiatives, and mobile games.

• While the expansion of the Moonbirds IP is promising, a clearer and more concrete utility framework for the $BIRB token is still required.

🇰🇷 한국어로 읽기 →

1. Moonbirds Moving Toward a Larger Ecosystem

Moonbirds was a high-profile NFT project that traded up to 40 ETH in 2021. As the NFT market entered a downturn, attention faded. Recently, however, Moonbirds has returned to the spotlight following the announcement of a token launch plan. Still, viewing Moonbirds purely as an NFT reflects a perspective anchored in 2021.

In May 2025, Moonbirds entered a new phase after being acquired by Orange Cap Games. The acquirer’s objective is not to operate Moonbirds as a standalone NFT collection, but to develop it as a broader IP-driven business. This shift requires moving beyond the valuation of a single NFT and instead assessing Moonbirds within a larger strategic framework.

2. Moonbirds and the Ambition to Become the Next Pop Mart

The future Orange Cap Games envisions through Moonbirds is becoming the “next Pop Mart.”

CEO Spencer Gordon Sand has stated his ambition to build a multi-billion-dollar company by positioning Orange Cap Games as the Pop Mart of Web3.

This ambition is closely tied to Sand’s career background. He has been an early investor in NFT projects such as Bored Ape Yacht Club, RTFKT, and Cool Cats, giving him firsthand exposure to how NFT projects evolve into IP, and how they fail.

In particular, as one of the largest holders of Pudgy Penguins, he has seen the brand extend into mainstream media, including television, where non-crypto audiences actively engage with the characters.

This experience likely shaped his conviction around building a “next Pop Mart.”

Consistent with this background, Orange Cap Games’ vision for Moonbirds diverges sharply from a typical NFT sales model. Rather than focusing on NFT distribution within Web3, the company aims to use Moonbirds as a starting point to acquire and scale multiple high-potential IPs, ultimately positioning itself as a diversified, IP-centric consumer business similar in structure to Pop Mart.

A representative success case of Pop Mart is the character Labubu. Labubu was not originally created by Pop Mart. In 2019, the company signed an exclusive agreement with a Hong Kong–based artist and successfully introduced the character to a mass market.

Pop Mart is not a simple reseller of third-party IP. Its core strength lies in vertical integration.

Similar to a talent agency, the company manages the full lifecycle of IP development, from artist discovery and IP licensing to product design, manufacturing, and direct-to-consumer distribution through its own channels. This integrated structure allows Pop Mart to repeatedly scale new characters using a consistent expansion model.

Orange Cap Games appears to be pursuing a comparable approach. Rather than focusing solely on product creation, the company aims to build a distribution layer capable of delivering multiple IPs.

This system spans physical distribution, such as figurines and trading cards, cultural distribution through offline tournaments and events, and digital distribution via games and NFTs. The objective is to create a repeatable framework that can support and scale any IP introduced into the ecosystem.

3. To Become Pop Mart, Products Must Be Well Made and Well Distributed

For Orange Cap Games, producing physical toys inspired by Moonbirds NFTs matters. However, trading cards play a more central role in establishing a scalable ecosystem.

To differentiate its trading card game, the company avoided the industry-standard Blue Core card stock and instead developed its own Orange Core material. This proprietary stock reduces common issues such as edge wear and card bending. Orange Cap Games controls both material selection and the manufacturing process, extending product ownership down to production details.

These efforts were validated when the cards received PSA 10 grades from PSA, the highest rating available. This was followed by a direct collaboration with PSA, resulting in co-branded promotional cards.

Product quality alone is not sufficient. Distribution infrastructure determines whether physical products reach the right audience. Placement in high-traffic locations frequented by target consumers is critical.

To this end, Orange Cap Games partnered with major global distributors:

• GTS Distribution, the largest collectibles distributor in North America

• Star City Games, a core distributor for Magic: The Gathering

• Asmodee, the world’s third-largest board game and toy distributor

As a result, Moonbirds products are no longer limited to crypto-native channels such as exchanges. They are now available in local hobby shops and toy stores, meeting a baseline requirement for global expansion.

At this stage, Orange Cap Games has secured both product quality and distribution access. The next challenge is retention: whether customers who purchase these products remain engaged within the broader Moonbirds ecosystem.

4. Convincing Consumers to Choose Moonbirds

Producing high-quality products and securing distribution are necessary, but not sufficient. The real challenge is persuasion. Among countless character products on retail shelves, what makes consumers choose Moonbirds?

The success of Labubu at Pop Mart was not driven by visual appeal alone. Orange Cap Games applies a similar logic, using structured strategies designed to influence consumer behavior rather than relying on design alone.

4.1. Trading Card Games as a Cultural Entry Point

Cards function not only as collectibles but as components of a game. For cards to become meaningful collectibles, a playable game must exist first. Without active gameplay, even well-designed and well-manufactured cards remain decorative objects.

The central question is how to attract players to a new card game.

Orange Cap Games targets participants in large-scale trading card tournaments. These events often run for five days, with roughly half of participants eliminated on the first day. The company schedules its own tournaments on the second day, positioning them as an alternative for eliminated players.

From a participant’s perspective, an additional competitive opportunity is compelling. Preparation leads to familiarity with the game, core players begin to cluster, and the product starts to function as a real game rather than a niche experiment.

When a Moonbirds tournament is held alongside a major established competition, players also begin to associate it with the same competitive standard. This shift in perception is critical. The strategy is less about immediate conversion and more about reframing Moonbirds TCG as a legitimate part of the broader card game ecosystem.

At its core, this approach is not only about participation, but about changing how the product is perceived.

In practice, Orange Cap Games applied this strategy in 2025 with its Vibes TCG at SCG Con, where side tournaments were run alongside major competitions. Over time, this approach has steadily expanded the scale and visibility of the Vibes TCG events.

4.2. Blind Box 2.0: From a Single Experience to Three

Pop Mart’s traditional blind boxes, such as those featuring Labubu, typically contain a single figurine. Once the box is opened and the item revealed, the experience ends. The model is designed around one-time consumption.

Moonbirds takes a different approach with Blind Box 2.0. Each box contains three distinct collectibles:

1. A plush or figurine

2. Trading Card

3. NFT

By purchasing a single box, consumers engage with three separate experiences rather than one.

Orange Cap Games refers to this model as the “Hybrid” category. This is not simply a bundle of three products. The core idea is cross-channel onboarding, where each item serves as an entry point into a different part of the ecosystem.

• Toy-focused buyers discover TCG cards and are introduced to gameplay.

• TCG-focused buyers receive NFTs and gain exposure to onchain assets.

• NFT-focused buyers receive physical toys and are guided into offline communities

A single blind box becomes a gateway into all three of Orange Cap Games’ business lines: toys, TCG, and NFTs. Consumers may engage only with their original purchase intent. However, once curiosity extends beyond that initial purpose, they are naturally guided into adjacent parts of the ecosystem.

4.3. Mobile Games as an Expansion Channel for Daily Engagement

Purchasing trading cards requires spending, and collecting figurines requires prior interest. Free-to-play mobile games, by contrast, require little more than a download. Some users may later invest time or money to improve their decks or progress, but the initial barrier to entry remains low.

Angry Birds provides a useful reference. The gameplay was simple, but the characters became globally recognizable. From there, the IP expanded into films, merchandise, and theme parks. The game served as the starting point for broad IP distribution.

Moonbirds’ mobile game is designed to play a similar role. Through gameplay, users become familiar with the characters and gradually absorb the broader worldbuilding. Even users with no immediate intention to purchase cards or figurines are exposed to Moonbirds through the game.

Over time, this familiarity creates recognition. When consumers later encounter Moonbirds products in retail settings, the characters are no longer unfamiliar. The mobile game establishes the mental bridge that turns passive awareness into potential purchase intent.

5. From Moonbirds to Orange Cap Games: The Role of $BIRB

Orange Cap Games has built the infrastructure and strategy to expand Moonbirds. For investors, however, the key question remains: what does the $BIRB token actually do?

The team describes $BIRB as a “coordination layer.” In this framing, the token is intended to accelerate cultural distribution and enable memes to spread more efficiently. The strategy is to anchor the business in physical consumer products while using crypto-native dynamics to amplify brand reach.

The challenge lies in specificity. It remains unclear what concrete benefits accrue to token holders. Revenue sharing from product sales, NFT-linked memberships, or other incentive mechanisms have not been clearly defined.

Orange Cap Games emphasizes long-term ecosystem growth. Rather than distributing profits to token holders, revenue is expected to be reinvested into the business. The goal is to create a positive feedback loop where attention generated in non-crypto markets feeds back into the crypto community.

A notable strength is that this is not a business assembled solely to justify a token launch. The company generated real revenue through Vibes TCG before introducing the token layer. This approach differs materially from meme coins that lack underlying operations.

However, open questions remain. Whether the token’s proposed “cultural coordination” function can operate in practice, and whether that function translates into sustained token value, has yet to be demonstrated. A reinvestment-first strategy may also be less appealing to short-term investors.

It remains uncertain whether Moonbirds can achieve Pop Mart level success. Still, the project serves as a live experiment in how NFT-originated IP can be monetized in the real world. The concrete design of $BIRB and its early performance will determine the outcome of that experiment.

🐯 More from Tiger Research

Read more reports related to this research.

• Magic Eden: From NFT Marketplace to Crypto Entertainment

• Gradient: Opening a New AI Era with Open Intelligence

Disclaimer

This report was partially funded by Moonbirds. It was independently produced by our researchers using credible sources. The findings, recommendations, and opinions are based on information available at publication time and may change without notice. We disclaim liability for any losses from using this report or its contents and do not warrant its accuracy or completeness. The information may differ from others’ views. This report is for informational purposes only and is not legal, business, investment, or tax advice. References to securities or digital assets are for illustration only, not investment advice or offers. This material is not intended for investors.

Terms of Usage

Tiger Research allows the fair use of its reports. ‘Fair use’ is a principle that broadly permits the use of specific content for public interest purposes, as long as it doesn’t harm the commercial value of the material. If the use aligns with the purpose of fair use, the reports can be utilized without prior permission. However, when citing Tiger Research’s reports, it is mandatory to 1) clearly state ‘Tiger Research’ as the source, 2) include the Tiger Research logo following brand guideline. If the material is to be restructured and published, separate negotiations are required. Unauthorized use of the reports may result in legal action.

Key Takeaways

• Most Layer 2s lock bridge assets without using them. Katana deploys these assets into Ethereum lending protocols to generate yield, then redistributes earnings as DeFi protocol incentives.

• Holding assets in storage generates no return. Users must deploy capital into Katana DeFi protocols to earn additional rewards.

• As of Q3 2025, over 95% of Katana’s TVL was actively deployed in DeFi protocols. This contrasts with most chains, where utilization rates range from 50% to 70%.

• Katana reinvests 100% of net sequencer fee revenue into liquidity provision, maintaining stable trading conditions even during market volatility.

🇰🇷 한국어로 읽기 →

1. Why Capital Is Sitting Idle

What happens to your money when you bridge from Ethereum to a Layer 2?

Most people assume their assets are simply transferred. In reality, the process is closer to freezing. When you deposit assets into a bridge contract, the contract holds them in escrow. The Layer 2 mints an equivalent amount of tokens. You can transact freely on Layer 2, but your original assets on mainnet remain locked and idle.

Consider a simple analogy. You deposit items at a storage facility and receive a claim ticket. The ticket can be transferred to others. But the items themselves stay in storage until you retrieve them.

This describes how most Layer 2 bridges work. Assets held in Ethereum escrow contracts generate no yield. They wait passively until users withdraw them back to mainnet.

What if bridge deposits on mainnet could earn DeFi yield while you still access fast, low-cost transactions on Layer 2?

Katana answers this question directly. Capital entering the bridge does not sit idle. It is put to work.

2. How Katana Puts Capital to Work

Katana activates capital through three mechanisms:

1. Bridge assets are deployed into Ethereum lending markets to generate yield.

2. Trading fee revenue is reinvested into liquidity pools.

3. Native stablecoin AUSD captures U.S. Treasury yields.

External capital works. Chain-generated capital works. These three mechanisms combine to eliminate idle assets on Katana.

2.1. Vault Bridge

The first mechanism is Vault Bridge. When users send assets to Katana, the original assets remaining on Ethereum mainnet are deployed into lending markets to generate interest.

When you bridge USDC from Ethereum to Katana, those assets are not simply locked. On Ethereum mainnet, they are deployed into curated vault strategies on Morpho, a major lending protocol. The yield generated does not go directly to individual users. Instead, it is collected at the network level and redistributed as rewards to core DeFi markets on Katana.

On Katana, the user receives a corresponding vbToken, such as vbUSDC. This token can be freely used across Katana’s DeFi ecosystem.

One common misunderstanding should be addressed. vbTokens should not be compared to staking derivatives like stETH from Lido. stETH appreciates over time as staking rewards accrue.

vbTokens work differently. Holding vbUSDC in your wallet does not increase the quantity or price. The yield Vault Bridge generates on Ethereum does not flow to individual vbToken holders. It flows to Katana’s DeFi pools. Revenue is distributed periodically to the network, strengthening incentives for Sushi liquidity pools and Morpho lending markets.

Users benefit only when they actively deploy vbTokens. Supplying vbTokens to Sushi liquidity pools or to lending strategies such as those offered by Yearn allows users to earn base yield plus additional rewards sourced from Vault Bridge. Simply holding vbTokens provides no return.

Katana rewards asset utilization rather than passive ownership. Capital that moves is rewarded. Capital that remains idle is not.

2.2. Chain-Owned Liquidity (CoL)

The second mechanism is Chain-Owned Liquidity (CoL). Katana collects 100% of net sequencer fee revenue (transaction processing fees minus Ethereum settlement costs).

The foundation uses this revenue to become a direct liquidity provider. It supplies assets to Sushi trading pools and Morpho lending markets. The chain itself owns and manages this liquidity.

This creates a reinforcing cycle. As users transact on Katana, sequencer fees accumulate. Those fees are converted into chain-owned liquidity, which deepens pools. Slippage declines, lending rates stabilize, and user experience improves. Improved conditions attract more users, which generates additional fees. The cycle continues.

In theory, this structure is especially effective during market downturns. External liquidity is mobile and often exits quickly under stress. Chain-owned liquidity, by contrast, is designed to remain in place, allowing pools to persist and absorb shocks more effectively.

In practical terms, this sets Katana apart from most DeFi systems that rely on incentivizing external capital through token emissions. By maintaining liquidity it owns directly, the network aims for more stable and sustainable operation.

2.3. AUSD Treasury Yield

The third mechanism is AUSD, Katana’s native stablecoin. AUSD is backed by U.S. Treasuries, and the off-chain yield from these Treasury holdings flows into the Katana ecosystem.

AUSD is issued by Agora. The collateral backing AUSD is invested in physical U.S. Treasuries. Interest earned from these Treasuries accrues off-chain. This yield is periodically channeled to the Katana network, where it strengthens incentives for AUSD-denominated pools.

If Vault Bridge brings on-chain yield, AUSD brings off-chain yield. The two revenue sources differ in nature. Vault Bridge yield fluctuates with Ethereum DeFi market conditions. AUSD yield is tied to U.S. Treasury rates and remains relatively stable.

This diversifies Katana’s revenue structure. When on-chain markets are volatile, off-chain yield provides a buffer. When on-chain yields are low, Treasury returns support overall returns. The structure spans both crypto markets and traditional finance.

3. Locking Capital Versus Putting It to Work

As discussed earlier, there is a reason most existing bridges simply lock assets. Security. When assets do not move, system design remains simple and attack surfaces are limited. Most Layer 2 networks adopt this approach. It is safe, but capital remains idle.

Katana takes the opposite position. Activating idle assets introduces additional risk, and Katana acknowledges this tradeoff directly. Rather than avoiding it, the network works with established risk management specialists in DeFi. These include firms such as Gauntlet and Steakhouse Financial.

Gauntlet and Steakhouse Financial are established risk management firms in the DeFi sector, with experience setting parameters for major lending protocols and advising leading DeFi projects. Their role is comparable to that of professional asset managers in traditional finance. They assess which protocols capital should be allocated to, determine appropriate position sizes, and monitor risk exposure on an ongoing basis.

No financial system offers 100% safety, so concerns about residual risk are valid.

However, Katana works with top-tier risk curators and maintains conservative vault structures. An internal Risk Committee oversees operations. Additional safeguards include liquidity buffers provided by Cork Protocol and other protective mechanisms.

4. The DeFi Heaven Katana Creates

Current DeFi markets suffer from fragmented liquidity. Pools trading the same assets exist separately across chains and protocols. This reduces execution efficiency, increases slippage, and lowers capital utilization. Some users exploit these inefficiencies through arbitrage. Most users simply pay higher costs.

Katana solves this problem at the system level.

Vault Bridge and chain-owned liquidity concentrate liquidity in core protocols. As a result, trade execution improves, slippage declines, and lending rates stabilize. Most importantly, yield from idle assets on Ethereum mainnet is added to base returns, raising overall yield.

Katana’s incentive structure can also significantly lower effective borrowing costs at certain points, or even create negative interest rates depending on market conditions and reward programs. This happens because Vault Bridge, CoL, and AUSD yields are reinvested into core markets. However, these are incentive-driven outcomes that vary with market conditions.

As a result, as of Q3 2025, over 95% of Katana’s TVL was actively deployed in DeFi protocols. This contrasts with most chains, where utilization rates range from 50% to 70%. Ultimately, what Katana creates is a chain where capital does not sleep, a system that rewards actual usage.

Katana never sleep.

🐯 More from Tiger Research

Read more reports related to this research.

• Magic Eden: From NFT Marketplace to Crypto Entertainment

• Gradient: Opening a New AI Era with Open Intelligence

• OpenMind: Preparing for the Age of Everyday Robotics

Disclaimer

This report was partially funded by Katana. It was independently produced by our researchers using credible sources. The findings, recommendations, and opinions are based on information available at publication time and may change without notice. We disclaim liability for any losses from using this report or its contents and do not warrant its accuracy or completeness. The information may differ from others’ views. This report is for informational purposes only and is not legal, business, investment, or tax advice. References to securities or digital assets are for illustration only, not investment advice or offers. This material is not intended for investors.

Terms of Usage

Tiger Research allows the fair use of its reports. ‘Fair use’ is a principle that broadly permits the use of specific content for public interest purposes, as long as it doesn’t harm the commercial value of the material. If the use aligns with the purpose of fair use, the reports can be utilized without prior permission. However, when citing Tiger Research’s reports, it is mandatory to 1) clearly state ‘Tiger Research’ as the source, 2) include the Tiger Research logo following brand guideline. If the material is to be restructured and published, separate negotiations are required. Unauthorized use of the reports may result in legal action.

Key Takeaways

• Magic Eden has shifted from a simple NFT marketplace to a “crypto entertainment platform” by integrating gaming elements.

• Features like “Lucky Buy” and “Pack Ripping” focus on user fun, successfully rebranding the platform’s image.

• The platform allocates 30% of its revenue to buy back $ME tokens and NFTs, creating a strong link with its holders.

🇰🇷 한국어로 읽기 →

1. Magic Eden: Not Just NFTs

Magic Eden, founded in 2021, quickly disrupted the “NFT Marketplace War.” Magic Eden rose as a key player on Solana by offering low fees and creator-friendly tools. To date, Magic Eden has facilitated $15-20 billion in NFT trading volume over the past four years.

However, this strong first impression has led to a low valuation for the project.

This is because many investors still view Magic Eden only as the “top NFT exchange on Solana.” Consequently, fears regarding the broader NFT market lead to fears about Magic Eden itself.

However, Magic Eden moved past being a simple NFT marketplace long ago. It has already built a diverse set of revenue streams.

Jack, the co-founder, stated on X that token trading now accounts for over 30% of total revenue as of 2024. This marks a clear shift from the past when the firm relied solely on NFT fees. The change continues in 2025 as Magic Eden adds gaming features to evolve into an entertainment platform.

The “Packs” feature is a prime example. This is a chance-based mechanic similar to the existing “Lucky Buy” tool. Data proves its success. According to a podcast with Presto Research, “Packs” earned about $15 million in its first week.

Magic Eden is no longer just an NFT marketplace. It is now a “crypto entertainment platform” that focuses on user fun.

2. Magic Eden = Crypto Entertainment

Since its start, Magic Eden has pursued bold and fun ideas. Its core target has always been the “Crypto Normie.” This refers to the retail user rather than the pro trader. The mass market seeks intuitive fun instead of complex trading tools.

Most exchanges and token trading tools compete in the “PvP” (Player vs Player) market with low fees and pro-level tools. This is an overcrowded “Red Ocean” with low expected returns. Much of the crypto industry focuses on this segment and chases pro trading trends.

Instead, Magic Eden focuses on “Fun.” While others chase whales, Magic Eden is adopting a “Zig while others zag” strategy to capture the vast consumer market.

2.1. Lucky Buy

The best case of this strategy is “Lucky Buy.” This product was launched in September 2023. Users can try to win high-value NFTs with small commitments via roulette, without paying the full price.

Users can set their probability 1% or as high as 75%, depending on how much they want to pay. But this also sets their chances. This product offers a chance to win for users with less capital and provides additional liquidity to sellers.

Turning the purchase process into a game triggered a huge response. Despite service blocks in the US due to regulations. And with only organic demand, Lucky Buy became Magic Eden’s fastest growing product lines .

2.2. Packs

Launched in late October 2025, “Packs extends this strategy. It brings the thrill of opening physical card packs to the digital realm. Users “rip” digital packs earned from app activity to find rare digital collectibles: from NFTs across top Solana and Ethereum collections to tokenized, graded Pokémon cards.

In the first week of launch, Packs generated around $15 million - more than the entire NFT industry combined, highlighting strong user demand.

Magic Eden is now doubling down on this product: adding multi-pack ripping, expanding digital collectible categories, and even more novel game mechanics like pack battles, gifting, and richer gameplay effects.

This serves as a strong retention tool. While users on rival platforms analyze complex charts, Magic Eden users find joy in ripping packs. This is the essence of crypto entertainment.

3. Inevitable Regulatory Constraints and a Head-On Breakthrough

Strategies based on fun and speculation face strict rules. Under the SEC and the Biden administration, the US held a harsh stance on crypto.

Most firms would retreat or cut features in this climate. Magic Eden did not hide. It employs sophisticated “Geo-blocking” to restrict US access technically, and leverages its large global user base to grow. At the same time, operating at the highest standards to comply with all regulations .

Magic Eden prioritized providing permissionless, experimental products to users in regions outside the US, like Korea.

While others shrink before regulations, Magic Eden confronts them to supply what the public wants. This approach treats regulation not as a passive constraint, but as “Operational Alpha” to boost global market share.

4. Buybacks: What the Public Really Wants

High corporate revenue means little to investors if it does not raise the price of tokens in their wallets. Many crypto projects fail to link platform revenue with token value.

Magic Eden addressed this on November 13, 2025, by announcing a “Buyback Program.” The concept is simple: the firm reinvests profits to support ecosystem value. Magic Eden pledged to return 30% of NFT marketplace revenue through the following structure:

• $ME Token Buyback (15% of revenue): The firm buys $ME tokens directly from the market. This mirrors stock buybacks. Reducing circulating supply exerts upward pressure on token value.

• NFT Collection Buyback (15% of revenue): The remaining 15% funds the purchase of key NFT collections. These assets are permanently stored in an on-chain vault called “The Garden of Eden.” By directly defending the Floor Price, the firm strengthens the ecosystem.

This program starts on Solana and will expand to Bitcoin, Ethereum, Monad, and more. Magic Eden’s tokenomics surpass simple governance. Company success directly drives token buying and NFT price support. This systematizes the phrase “Project success equals community success,” delivering what the public truly wants.

5. The Completion of Crypto Entertainment for the Masses

Magic Eden is no longer just an NFT marketplace. It is now a crypto entertainment platform give fun to the masses.

Magic Eden first built a solid financial base. Its wallet and swap tools link assets across fragmented chains. It then added features like Lucky Buy and Pack to gain mass users. To sustain this, a buyback program using 30% of revenue provides clear economic rewards.

The edge for Magic Eden lies in speed and market insight. While peers stall due to rules or complex tech, Magic Eden delivers the engagement and “dopamine” users crave. It used bold geo-blocking to move fast while others paused.

But still large gaps remain in the crypto entertainment space. High-value sectors like prediction markets offer multi-billion dollar growth that is largely untapped. Magic Eden seeks to lead this shift and capture this value. To this end, it is now incubating independent arms such as Dicey, an iGaming platform. These new ventures will drive the next phase of growth.

The final step is to fit these tools into a mobile wallet. When finance and fun meet in one app, Magic Eden will serve as the main gateway to the Web3 world.

🐯 More from Tiger Research

Read more reports related to this research.

• Sign: From Community to Government

• Gradient: Opening a New AI Era with Open Intelligence

• OpenMind: Preparing for the Age of Everyday Robotics

Disclaimer

This report was partially funded by Magic Eden. It was independently produced by our researchers using credible sources. The findings, recommendations, and opinions are based on information available at publication time and may change without notice. We disclaim liability for any losses from using this report or its contents and do not warrant its accuracy or completeness. The information may differ from others’ views. This report is for informational purposes only and is not legal, business, investment, or tax advice. References to securities or digital assets are for illustration only, not investment advice or offers. This material is not intended for investors.

Terms of Usage

Tiger Research allows the fair use of its reports. ‘Fair use’ is a principle that broadly permits the use of specific content for public interest purposes, as long as it doesn’t harm the commercial value of the material. If the use aligns with the purpose of fair use, the reports can be utilized without prior permission. However, when citing Tiger Research’s reports, it is mandatory to 1) clearly state ‘Tiger Research’ as the source, 2) include the Tiger Research logo following brand guideline. If the material is to be restructured and published, separate negotiations are required. Unauthorized use of the reports may result in legal action.

Key Takeaways

• Sign is applying its TokenTable experience in large scale distribution and identity verification to government infrastructure through the S.I.G.N. framework.

• Strong backing from partners including CZ helped Sign secure contracts in Kyrgyzstan and Sierra Leone.

• The next step is to turn government business expansion into a reality and keep the community aligned through token buybacks.

🇰🇷 한국어로 읽기 →

1. From a Sing Sign to Government

When most people think of Sign, they picture the group of people wearing orange vests and glasses singing together. As noted in the last report, Sign established a strong community known as the Orange Dynasty, which became the project’s core foundation.

But this strong foundation hides what Sign actually is. Sign is not just a community. Through TokenTable, its asset distribution platform, Sign has distributed over $3 billion in tokens to more than 55 million users. This required solving two core problems: distributing assets at massive scale and verifying each recipient’s identity and eligibility.

TokenTable operates at a scale that resembles national-level infrastructure. The platform handles millions of concurrent distributions while maintaining accurate identity verification for each transaction.

This experience directly translates to what governments need.

For example, governments must prevent duplicate claims when granting welfare benefits. They need clear identity records when issuing CBDCs. They must distribute emergency aid at scale and with speed.

These are the same problems Sign solved in Web3.

• Large scale distribution(TokenTable): Web3 token distribution → Welfare payments and CBDC operations

• Identity verification(sign protocol): On-chain attestations → Eligibility checks for public benefits

2. S.I.G.N

Sign is now extending this verified Web3 capability to government use cases. Sign revealed a whitepaper titled S.I.G.N. (Sovereign Infrastructure for Global Nations), presenting a comprehensive technical framework.

Governments do not seek full transparency. They require both privacy and transparency at the same time. Sign’s sovereign blockchain infrastructure addresses this by using a BNB Chain–based Layer 2 for public services that need transparency, and Hyperledger Fabric for financial systems that require privacy.

On top of this sovereign blockchain infrastructure, three infrastructure layers operate to support the government’s core businesses.

• ID & Attestations: Sign Protocol provides an on-chain identity proof system. Sensitive personal information remains off-chain while eligibility requirements are cryptographically verified on-chain.

• Stablecoin & CBDC: Governments issue CBDCs on Hyperledger Fabric and stablecoins on Layer 2. Each fulfills different requirements: privacy and transparency respectively.

• Digital Asset Engine: TokenTable operates as the distribution engine. It delivers CBDCs and stablecoins to millions simultaneously, automatically distributing welfare payments, emergency aid, and pensions based on eligibility through conditional logic.

Beyond vision, Sign has delivered results. The team signed a CBDC development agreement with the National Bank of the Kyrgyz Republic and is building a blockchain-based digital ID system for the government of Sierra Leone.

3. The “Unsexy” Government Business

Why is Sign now entering the government business?

TokenTable continues to operate well, but its revenue model depends on a steady flow of new project launches. This flow changes with market cycles. When the market slows, fewer projects launch and TokenTable’s revenue falls.

TokenTable kept Sign alive. Government business now drives growth.

Working with governments is often considered unsexy. It moves slowly, follows strict rules, and involves long decision cycles. Yet these unsexy sectors often become strong once a team secures early ground. They may look dull at first, but they can open large markets and provide stable revenue. In the end, unsexy business is what becomes valuable.

• Scale: Global software spending reached 675 billion dollars in 2024. If blockchain captures even 5 percent of this market, it becomes a 30 billion dollar segment. If Sign takes just 1 percent of that, annual revenue could reach 300 million dollars, far above TokenTable’s current 15 million dollars.

• Stable revenue: Government budgets do not depend on crypto market cycles. Spending continues even in downturns, and once a system is adopted, high switching costs often lead to long-term contracts.

• Low competition: Most Web3 projects have no experience building government systems. Sign already has track records in Kyrgyzstan and Sierra Leone, giving it a meaningful head start.

So do governments actually want blockchain? More than expected. Several governments are already preparing for on-chain systems.

• Dubai: Plans to move all government transactions on chain by 2030, with expected savings of 5.5 billion dirhams per year.

• Singapore: Runs a 12 million SGD blockchain innovation program and continues trials including a CBDC project.

• United States: The Department of Commerce launched a pilot to publish economic data such as GDP on blockchain, and Wyoming issued a state-backed stablecoin.

These cases may look like pilots or tests, and it is fair to ask when real adoption will come. Turning points, however, do not arrive with notice.

It has been one year since Trump’s election in November 2024. In that year, stalled rules became clearer through the Clarity Act and the Genius Act. Circle listed publicly, and Nasdaq filed to list tokenized stocks. Few expected this pace at the end of 2024.

Government blockchain adoption may follow the same pattern. Most projects remain pilots today, but once one or two countries show success, others can move quickly.

4. Sign Prepares for a Shift

Sign has already signed contracts and MOUs with two national governments and is building systems for them. In Kyrgyzstan, it is tasked with the payment system. In Sierra Leone, it handles the identity system. Both are core parts of national operations.

Of course, this is still early stage. Kyrgyzstan’s CBDC, called the Digital Som, is in development. Sierra Leone is at the MOU stage. It will take time before the systems run at scale and reach millions of users.

The important point is that the work is underway. Governments do not sign agreements easily. Without proven technology and trust, they do not hand over national infrastructure. Sign has earned that trust in both countries.

4.1. Kyrgyzstan: Building the CBDC System

On October 24, 2025, Sign CEO Xin Yan signed a technical service agreement with Mels Atokurov, the Deputy Governor of the National Bank of Kyrgyzstan.

The signing took place during the second meeting of the National Committee for Virtual Assets and Blockchain Technology. President Sadyr Japarov and Binance founder Changpeng Zhao (CZ) attended the event, showing the government’s commitment to digital financial transformation.

The Digital Som, which is the focus of this agreement, is Kyrgyzstan’s central bank digital currency. The government has already signed an amendment that gives the Digital Som legal status. A pilot program will begin in 2025. Based on the results, the central bank will decide at the end of 2026 whether to proceed with full issuance. If confirmed, the Digital Som will become an official means of payment on January 1, 2027.

Through this agreement, Sign will build the pilot platform and the full CBDC infrastructure. If the central bank moves forward with issuance, it will need strong security and fraud protection measures. Sign is expected to play a key role in these areas.

At this point, Sign’s Hyperledger Fabric-based CBDC infrastructure could serve as the technical foundation for Digital Som. TokenTable may function as the digital currency distribution engine, while Sign Protocol could provide participant identity verification. The specific technical configuration will be determined based on results.

4.2. Sierra Leone: Digital Identity and Payment Infrastructure

On November 6, 2025, Sign CEO Xin Yan signed an MOU with Salima Monorma Bah, the representative of Sierra Leone’s Ministry of Communication, Technology and Innovation. The goal of the partnership is to build a blockchain based digital ID system and a stablecoin payment infrastructure that can serve as the base of Sierra Leone’s digital economy.

The project focuses on two core systems.

The first is the digital identity platform. With a blockchain based digital ID, citizens gain a verified and reusable identity. This single ID allows access to government services, opening of bank accounts, and use of private sector services. Repeated submission and verification of documents is no longer required.

The second is the digital payment system. A national digital wallet will allow individuals, businesses and the government to transact on the same platform. Since the system is built on stablecoins, transactions are faster and cheaper than traditional rails. It also expands financial access because people without bank accounts can still use the digital wallet for payments and financial services.

The MOU also includes broader cooperation plans such as real world asset tokenization, development of an innovation ecosystem through Felei Tech City, and a jointly managed innovation fund. These items outline future directions. The confirmed scope of the current MOU is the digital ID system and the payment infrastructure.

Sign Protocol appears positioned to serve as the on-chain attestation system for digital identity. Layer 2-based stablecoin infrastructure could provide the blockchain foundation for the payment system. TokenTable may be utilized for distributing government payments or subsidies. The actual implementation scope will be clarified as the project progresses.

5. How BNB and Key Partners Accelerate Sign’s Government Business

Sign’s move into government infrastructure is supported by a strong group of strategic investors, including Sequoia Capital, Circle, Altos Ventures, and IDG Capital. Among them, the partnership with CZ and YZi Labs plays a central role in opening access to national governments.

The Kyrgyzstan deal illustrates this clearly. CZ was present when Sign signed the Digital Som agreement with the central bank. At the same time, the government announced that KGST, a stablecoin pegged to the Som, will be issued on BNB Chain.

In short, the country’s stablecoin will run on BNB Chain, and its CBDC system will be built by Sign. This highlights the close partnership between Sign and BNB Chain.

This link is also reflected in Sign’s position as a portfolio company of YZi Labs. YZi Labs invested 16 million dollars as the lead in Sign’s Series A round in January 2025 and added another 25.5 million dollars with IDG Capital in October.

Building on this base, CZ has stated that he provides direct support to Sign in its work with governments. In his posts, he wrote that he has spoken with the team and helped connect Sign with several national governments.

Sign is building its technology with BNB at the center. The new Sign Sovereign Layer 2 Stack is a government-focused framework based on opBNB. It allows a state to deploy a full Layer 2 stack without building a chain from the ground up. With this stack, a government can launch its system within weeks. And because it runs on BNB Chain, any state that adopts it becomes part of the broader BNB ecosystem.

Sign can advance on its own, but government adoption does not scale on product strength alone.

Public institutions look for trusted third parties, and external validation often speeds up adoption. Support from YZi Labs, CZ, BNB Chain, and investors such as Altos Ventures strengthens this trust. With this network in place, Sign is in a strong position to expand beyond Kyrgyzstan and Sierra Leone and enter more countries at a faster pace.

6. Sign Moves Into Long Term Growth

By entering government business, Sign is shifting from short term survival to long term growth. The agreements in Kyrgyzstan and Sierra Leone are only the beginning, and additional deals, especially in the Middle East, are likely to follow.

For this expansion to benefit token holders, a clear structure is needed. Sign completed a token buyback in August 2025. It may not adopt an automated DeFi model, but it will need a framework that allocates part of the revenue from government projects to future buybacks. This is how the business and the community stay aligned.

For any buyback plan to be sustainable, the pilot phase must progress. The Digital Som in Kyrgyzstan is in pilot testing in 2025, and Sierra Leone remains at the MOU stage. These systems must go live, reach millions of users, and generate stable revenue before buybacks can continue in a consistent way.

Sign survived through TokenTable and began its growth through government business. To capture this growth fully, it must turn pilots into full scale systems and build a clear link to its community.

That is when this unsexy work becomes the part that creates real value.

🐯 More from Tiger Research

Read more reports related to this research.

• Sign, The New Standard In The Web3 Ecosystem That Captures Both Community And Fundamentals

Disclaimer

This report was partially funded by Sign. It was independently produced by our researchers using credible sources. The findings, recommendations, and opinions are based on information available at publication time and may change without notice. We disclaim liability for any losses from using this report or its contents and do not warrant its accuracy or completeness. The information may differ from others’ views. This report is for informational purposes only and is not legal, business, investment, or tax advice. References to securities or digital assets are for illustration only, not investment advice or offers. This material is not intended for investors.

Terms of Usage

Tiger Research allows the fair use of its reports. ‘Fair use’ is a principle that broadly permits the use of specific content for public interest purposes, as long as it doesn’t harm the commercial value of the material. If the use aligns with the purpose of fair use, the reports can be utilized without prior permission. However, when citing Tiger Research’s reports, it is mandatory to 1) clearly state ‘Tiger Research’ as the source, 2) include the Tiger Research logo following brand guideline. If the material is to be restructured and published, separate negotiations are required. Unauthorized use of the reports may result in legal action.

Key Takeaways

• Gradient connects idle computing resources worldwide into a distributed network. This challenges the AI industry structure a few Big Tech companies dominate.

• The Open Intelligence Stack enables anyone to train and run LLMs without their own infrastructure.

• The team includes researchers from UC Berkeley, HKUST, and ETH Zurich. They collaborate with Google DeepMind and Meta to drive continuous advancement.

🇰🇷 한국어로 읽기 →

1. The Dependency Trap: Risks Behind AI Convenience

Anyone can now build prototypes by conversing with LLMs or generate images without design experience.

However, this capability can disappear at any moment. We don’t fully own or control it. A few large companies (OpenAI, Anthropic, and others) provide the foundational infrastructure that most services run on. We depend on their systems.

Consider if these companies revoke LLM access. Server outages could halt services. Companies could block specific regions or users for various reasons. Price increases could push individuals and small businesses out of the market.

When this occurs, “do anything” capability becomes “do nothing” helplessness instantly. Growing dependency amplifies this risk.

This risk already exists. In 2025, Anthropic blocked Claude API access to AI coding startup Windsurf without notice after news of a competitor’s acquisition. The incident restricted model access for some users and forced emergency infrastructure reorganization. One company’s decision immediately impacted another company’s service operations.

This appears to affect only some companies like Windsurf today. As dependency grows, everyone faces this problem.

2. Gradient: Opening the Future with Open Intelligence

Gradient solves this problem. The solution is simple: provide an environment where anyone can develop and run LLMs in a decentralized manner without restrictions, freeing users from control by a few companies like OpenAI or Anthropic.

How does Gradient make this possible? Understanding how LLMs work clarifies this. Training creates LLMs, and inference operates them.

• Training: The stage that creates AI models. Models analyze massive datasets to learn patterns and rules, such as which words likely follow others and which answers suit which questions.

• Inference: The stage that uses trained models. Models receive user questions and generate the most likely responses based on learned patterns. When you chat with ChatGPT or Claude, you perform inference.

Both stages require massive costs and computing resources.

Training GPT-4 alone cost an estimated $40+ million, requiring tens of thousands of GPUs running for months. Inference also demands high-performance GPUs for every response generated. These high cost barriers forced the AI industry to consolidate around capital-rich Big Tech companies.

Gradient solves this differently. While Big Tech builds massive data centers with tens of thousands of high-performance GPUs, Gradient connects idle computing resources worldwide into one distributed network. Home PCs, idle office servers, and lab GPUs operate as one giant cluster.

This enables individuals and small businesses to train and run LLMs without their own infrastructure. Ultimately, Gradient realizes Open Intelligence: AI as technology open to everyone, not the exclusive domain of a few.

3. Three Core Technologies Enabling Open Intelligence

Gradient’s Open Intelligence sounds attractive, but implementing it is complex. Computing resources worldwide vary in performance and specifications. The system must connect and coordinate them reliably.

Gradient solves this with three core technologies. Lattica establishes the communication network in distributed environments. Parallax handles inference within this network. Echo trains models through reinforcement learning. These three technologies connect organically to form the Open Intelligence Stack.

3.1. Lattica: P2P Data Communication Protocol

Central servers connect typical internet services. Even when we use messaging apps, central servers relay our communications. Distributed networks operate differently: each computer connects and communicates directly without central servers.

Most computers block direct connections and prevent external access. Routers route home internet connections, preventing external sources from locating individual computers directly. Finding a specific apartment unit with only the building address illustrates this challenge.

Lattica solves this problem effectively. Hole Punching technology creates temporary “tunnels” through firewalls or NAT (Network Address Translation), enabling direct computer-to-computer connections. This builds P2P networks where computers worldwide connect directly, even in restricted and unpredictable environments. Once connections form, encryption protocols secure communications.

Distributed environments require simultaneous data exchange and rapid synchronization across multiple nodes to run LLMs and deliver results. Lattica uses the BitSwap protocol (similar to torrents) to efficiently transfer model files and intermediate processing results.

Lattica enables stable and efficient data exchange in distributed environments. The protocol supports AI training and inference, plus applications like distributed video streaming. Lattica’s demo shows how it works.

3.2. Parallax: Distributed Inference Engine

Lattica solved the problem of connecting computers worldwide. Users face one remaining challenge: running LLMs. Open-source models continue advancing, but most users still cannot run them directly. LLMs require massive computing resources. Even DeepSeek’s 60B model demands high-performance GPUs.

Parallax solves this problem. Parallax divides one large model by layers and distributes them across multiple devices. Each device processes its assigned layer and passes results to the next device. Automotive assembly lines work similarly: each stage processes one part to complete the final result.

Division alone fails to achieve efficiency. Participating devices vary in performance. When high-performance GPUs process quickly but the next device processes slowly, bottlenecks form. Parallax analyzes each device’s performance and speed in real-time to find optimal combinations. The system minimizes bottlenecks and efficiently utilizes all devices.

Parallax offers flexible options based on needs. The system currently supports over 40 open-source models including Qwen and Kimi. Users select and run their preferred models. Users adjust execution methods based on model size. LocalHost runs small models on personal PCs (like Ollama). Co-Host connects multiple devices within families or teams. Global Host joins the worldwide network.

3.3. Echo: Distributed Reinforcement Learning Framework

Parallax enables anyone to run models. Echo tackles model training. Pre-trained LLMs limit practical applications. AI needs additional training for specific tasks to become truly useful. Reinforcement Learning (RL) provides this training.

Reinforcement learning teaches AI through trial and error. AI repeatedly solves math problems while the system rewards correct answers and penalizes wrong answers. Through this process, AI learns to produce accurate answers. Reinforcement learning enables ChatGPT to respond naturally to human preferences.

LLM reinforcement learning demands massive computing resources. Echo divides the reinforcement learning process into two stages and deploys optimized hardware for each stage.

The inference stage comes first. AI solves math problems 10,000 times and collects data on correct and incorrect answers. Echo prioritizes running many simultaneous attempts over complex calculations.

The training stage follows. Echo analyzes collected data to identify which approaches produced good results. The system then adjusts the model so AI follows those approaches next time. Echo processes complex mathematical operations quickly during this stage.

Echo deploys these two stages on separate hardware. The Inference Swarm uses Parallax to operate on consumer PCs worldwide. Multiple consumer devices like RTX 5090 or MacBook M4 Pro simultaneously generate training samples. The Training Swarm uses high-performance GPUs like A100 to rapidly improve models.

Results prove Echo works. Echo achieves performance equal to VERL, the existing reinforcement learning framework. Individuals and small businesses can now train LLMs for their specific purposes in distributed environments. Echo dramatically lowers the barrier to reinforcement learning.

4. Sovereign AI: New Possibilities Through Open Intelligence

AI has become essential, not optional. Sovereign AI grows increasingly important. Sovereign AI means individuals, companies, and nations own and control AI independently without external dependence.

The Windsurf case demonstrates this clearly. Anthropic blocked Claude API access without notice. The company immediately faced service paralysis. When infrastructure providers block access, companies suffer instant operational damage. Data breach risks compound these problems.

Nations face similar challenges. AI technology advances rapidly around the US and China while other nations grow increasingly dependent. Most LLMs use 90% English in their pre-training data. This language imbalance creates risks that non-English speaking nations will face technical exclusion.

[Ongoing Research Projects]

• Veil & Veri: Privacy protection and verification layer for AI (inference verification, training verification)

• Mirage: Distributed simulation engine and robot learning platform for physical-world AI

• Helix: Self-evolving learning framework for software agents (SRE)

• Symphony: Multi-agent self-improvement coordination framework for swarm intelligence

Gradient’s Open Intelligence Stack offers an alternative to this problem. Challenges remain. How does the system verify computation results in distributed networks? How does the system guarantee quality and reliability in an open structure where anyone can participate? Gradient conducts ongoing research and development to solve these challenges.

Researchers from UC Berkeley, HKUST, and ETH Zurich consistently produce results in distributed AI systems. Collaborations with Google DeepMind and Meta accelerate technological advancement. The investment market already recognizes these efforts. Gradient raised $10 million in seed funding co-led by Pantera Capital and Multicoin Capital, with participation from Sequoia China (now HSG).

AI technology will grow more important. Who owns and controls it becomes the critical question. Gradient moves toward Open Intelligence accessible to everyone, not monopolized by a few. The future they envision deserves attention.

🐯 More from Tiger Research

이번 리서치와 관련된 더 많은 자료를 읽어보세요.

• Edgen: Personalized Financial Intelligence for Everyone

• Wayfinder: AI Agents Drive DeFi Mass Adoption

• Talus: Expanding Digital Labor into Digital Economy

Disclaimer

This report was partially funded by Gradient. It was independently produced by our researchers using credible sources. The findings, recommendations, and opinions are based on information available at publication time and may change without notice. We disclaim liability for any losses from using this report or its contents and do not warrant its accuracy or completeness. The information may differ from others’ views. This report is for informational purposes only and is not legal, business, investment, or tax advice. References to securities or digital assets are for illustration only, not investment advice or offers. This material is not intended for investors.

Terms of Usage

Tiger Research allows the fair use of its reports. ‘Fair use’ is a principle that broadly permits the use of specific content for public interest purposes, as long as it doesn’t harm the commercial value of the material. If the use aligns with the purpose of fair use, the reports can be utilized without prior permission. However, when citing Tiger Research’s reports, it is mandatory to 1) clearly state ‘Tiger Research’ as the source, 2) include the Tiger Research logo following brand guideline. If the material is to be restructured and published, separate negotiations are required. Unauthorized use of the reports may result in legal action.

The next step matters now. How do people work with robots? How do robots cooperate with other robots? This report examines the answers through OpenMind.

Key Takeaways

• OpenMind develops the open-source runtime ‘OM1’. OM1 creates an environment where all robots communicate and cooperate freely, regardless of manufacturer.

• OpenMind’s blockchain network ‘FABRIC’ establishes robot identity verification, transaction records, and distributed verification systems. FABRIC forms the foundation for an autonomous machine economy.

• OpenMind uses the ERC-7777 standard to define robot behavioral rules. OpenMind is working on a ‘Physical AI Safety Layer’ with AIM Intelligence. Together, these will prevent malfunctions and block external attacks.

🇰🇷 한국어로 읽기 →

1. Robotics Is Growing Up Faster Than You Think

Robotics no longer belongs to the distant future or serves only a select few.

Just a few years ago, robots appeared only in labs or industrial sites. Now they step into our daily lives. People walking with robot dogs in the park or humanoids helping with household chores are no longer scenes from science fiction movies.

1X Technologies recently unveiled ‘Neo‘, a household humanoid that brings this reality closer. Consumers can now own a personal domestic assistant robot for a $499 monthly subscription or $20,000 upfront. The price remains steep, but the significance is clear: robotics technology has reached consumer homes.

Beyond Neo, global companies accelerate innovation through intense competition. Notable players include Figure, Tesla, and Boston Dynamics from the United States, and Unitree from China. Tesla plans to mass-produce its humanoid ‘Optimus’ starting in 2026 and price it below its vehicles.

The robotics industry expands rapidly into the consumer market. What seemed like a distant future arrives faster than expected and opens doors to a new everyday reality.

2. Robotics in Daily Life: Possibilities and Limitations

What changes can robotics technology bring to our daily lives? Let’s imagine a future where we live with robots.

Neo cleans the house. Unitree’s robot dog plays with the children. Optimus goes to the mart and shops for dinner ingredients. Each robot divides tasks and handles them simultaneously. Users experience far more efficient days.

Let’s take this one step further. What if robots cooperate to handle complex tasks together?

Optimus shops at the mart. Neo checks the refrigerator and requests additional ingredients from Optimus. Figure adjusts the recipe based on the user’s allergy information. Each robot connects in real-time and operates organically as one team. The user simply commands, “I want omurice.”

But this remains a distant dream. Robots lack sufficient intelligence to respond flexibly to situations. A bigger problem exists. Each robot operates within closed systems based on different technology stacks.

Robots from different manufacturers struggle to exchange data or cooperate smoothly. iPhones share photos via AirDrop with each other but cannot AirDrop to Samsung Galaxy phones. Robots face the same limitation.

Of course, cooperation is possible under limited conditions like Figure’s Helix: same manufacturer, same technology stack.

But reality presents more complexity. Look at the current robotics industry. Diverse robots explode onto the market, mirroring the Cambrian explosion.

Future users will select various robots based on their preferences and needs rather than sticking to one brand. Our homes today prove this pattern. We choose Samsung refrigerators, LG washing machines, and Dyson vacuum cleaners.

Now imagine robots from multiple manufacturers working together in one home. A kitchen robot cooks. A cleaning robot mops the floor. The two robots cannot share location information. Even if they share data, they cannot interpret it properly. Their distance calculation methods and measurement units differ.

They fail to track each other’s movement paths. Collision occurs. This is a simple example. More robots and complex tasks magnify the risks of confusion and collision.

3. Openmind: Building a World Where Robots Work Together

OpenMind emerges to solve these problems.

OpenMind breaks free from closed technology stacks and pursues an open ecosystem where all robots work together. This approach enables robots from different manufacturers to communicate and cooperate freely.

OpenMind presents two core foundations to realize this vision. First, ‘OM1‘ serves as an open-source runtime for robots. OM1 provides a standardized communication method that enables all robots to understand and cooperate with each other despite different hardware.

Second, ‘FABRIC’ operates as a blockchain-based network. FABRIC builds a trustworthy collaboration environment between robots. These two technologies create an ecosystem where all robots operate organically as one team, regardless of manufacturer.

3.1. OM1: Makes Robots Smarter and More Flexible

As we saw earlier, existing robots remain trapped in closed systems and struggle to communicate with each other.

More specifically, robots exchange information through binary data or structured code formats. These formats vary by manufacturer and block compatibility. For example, Company A’s robot expresses location as (x, y, z) coordinates while Company B defines it as (lat, long, height). Even in the same space, they fail to understand each other’s positions. Each manufacturer uses different data structures and formats.

OpenMind solves this problem through ‘OM1’, an open-source runtime. Think of it like Android, which operates on all devices regardless of manufacturer. OM1 works the same way and enables all robots to communicate in the same language regardless of hardware.

OM1 makes robots understand and process information based on natural language. OpenMind’s paper “A Paragraph is All It Takes” explains this well. Robot communication needs no complex commands or formats. A single paragraph of natural language context enables mutual understanding and cooperation.

Now let’s examine how OM1 operates in detail.

First, robots collect environmental information from various sensor modules like cameras and microphones. This data enters as binary format but multimodal recognition models convert it to natural language. VLM (Vision Language Model) processes visual information. ASR (Automatic Speech Recognition) handles audio. This generates sentences like “A man points at the chair in front” and “The user said ‘go to the chair’.”

The converted sentences gather through the Natural Language Data Bus. The Data Fuser weaves this information into a single situation report and delivers it to multiple LLMs. LLMs analyze the situation through this report and decide the robot’s next action.

This approach offers clear advantages. Robots from different manufacturers cooperate seamlessly. OM1 forms a natural language-based abstraction layer above hardware. Neo and Figure both understand identical natural language commands and perform the same tasks. Each manufacturer maintains its proprietary hardware and systems while OM1 enables free cooperation with other robots.

Beyond enabling cross-manufacturer cooperation, OM1 integrates other open-source models as runtime modules rather than competing with them. When robots need precise manipulation, OM1 utilizes Pi (Physical Intelligence) models. When multilingual speech recognition is needed, OM1 employs Meta’s Omnilingual ASR model. OM1 combines modules based on situations and delivers high scalability and flexibility.

OM1’s strengths extend further. OM1 fundamentally utilizes LLMs. Robots go beyond executing simple commands. They grasp situational context and make autonomous decisions.

Let’s examine a concrete example. Multiple objects sit in front of the robot. Someone requests “Pick up an item related to the desert.” Traditional robots fail because ‘desert items’ don’t exist in predefined rules. OM1 differs. It understands conceptual relationships through LLMs. It infers the connection between ‘desert’ and ‘cactus’ independently. It selects the cactus doll. OM1 establishes the foundation for robot collaboration and makes individual robots smarter.

3.2. FABRIC: A Network That Connects Distributed Robots as One

OM1 makes robots smarter and enables smooth communication between them. But beyond communication, a challenge remains. How can different robots trust each other when they cooperate? The system must verify who performed which tasks and whether they completed them properly.

Human society regulates behavior through law and guarantees performance through contracts. These mechanisms enable people to transact and cooperate safely with strangers. Robot ecosystems need identical mechanisms.

OpenMind solves this problem through ‘FABRIC’, a blockchain-based network. FABRIC connects robots and coordinates their cooperation.

Let’s examine FABRIC’s core structure. FABRIC starts by assigning an ‘identity’ to each robot. Every robot in the FABRIC network receives a unique identity based on ERC-7777 (Governance for Human Robot Societies)

Robots with assigned identities share their location, task status, and environmental information with the network in real-time. They simultaneously receive status updates from other robots. Like a situation board or minimap in a tycoon game, all robots track each other’s positions and status in real-time through one shared map.

Simply sharing information is not enough. Robots may submit incorrect information. Sensor errors may occur and distort data. FABRIC leverages blockchain’s consensus mechanism to guarantee data reliability.

Consider a real-world scenario. Delivery robot A cooperates with warehouse robot B to transport goods. Robot B reports it stands on the 2nd floor. Nearby sensor robots and elevator robots cross-verify B’s location. Multiple nodes verify transactions in blockchain. Multiple robots work the same way. They confirm B’s actual location and reach consensus. Suppose robot B reports the 2nd floor due to sensor error but actually stands on the 3rd floor. The verification process detects the discrepancy. The network records the corrected information. Robot A moves to the correct location on the 3rd floor.

FABRIC’s role extends beyond verification. FABRIC provides additional functions for the coming Machine Economy. First comes privacy protection. Blockchain transparency guarantees trust, but privacy also matters for operating actual robot ecosystems. FABRIC adopts a distributed structure that divides subnets by task or location and connects them through net hub servers. This structure protects sensitive information. The solution is not perfect, but continuous research will strengthen privacy protection.

FABRIC also provides Machine Settlement Protocol (MSP). MSP automates escrow, verification, and settlement. When the system verifies task completion, it automatically settles payment in stablecoins and records all evidence on the blockchain.Robots will evolve beyond cooperating with trust. They will become economic agents that transact autonomously.

4. What If: Future Daily Life Through OpenMind

4.1. A Whole New World: Utopia with Robots

We have long dreamed of a ‘Machine Economy’ where robots directly participate in economic activities. Robots judge independently, order goods, cooperate with other robots, and exchange value. OpenMind now transforms this dream into reality.