After greater than a decade constructing infrastructure for exchanges, monetary establishments and central banks, R3 noticed the market beginning to bend in a brand new path. A couple of 12 months in the past, the agency initiated a strategic reset, asking a easy however elementary query: what’s the easiest way for purchasers to transfer belongings totally onchain?
Todd MacDonald, R3’s co-founder, mentioned that course of coincided with a deep evaluate of the blockchain panorama.
“We spoke to basically all of the layer ones and layer twos,” he defined in an interview with CoinDesk, as R3 evaluated the place institutional capital markets had been probably to migrate. That work culminated in a strategic partnership with the Solana Basis, announced last May on the blockchain’s Speed up convention, he mentioned.
A layer 1 community is the bottom layer, or the underlying infrastructure of a blockchain. Layer 2 refers to a set of offchain techniques or separate blockchains constructed on prime of layer 1s.
The choice, MacDonald mentioned, was grounded in a long-term conviction that every one markets will finally change into onchain markets.
“We expect Solana is the very best community for that future,” he mentioned, pointing to its construction, throughput and trading-first design. R3 got here to see Solana as “the Nasdaq of blockchains,” a venue purpose-built for high-performance capital markets fairly than common experimentation.
By means of its Corda blockchain platform, R3 helps greater than $10 billion in belongings and works with contributors together with HSBC, Financial institution of America, the Financial institution of Italy, the Financial Authority of Singapore, the Swiss Nationwide Financial institution, Euroclear, SDX and SBI, he mentioned.
Tokenization, the method of representing real-world belongings resembling shares and bonds as digital tokens tradable on blockchain networks, has emerged as one of many key use instances drawing rising curiosity and funding from conventional monetary establishments.
Exercise in decentralized finance (DeFi) stays concentrated on a handful of chains, with Ethereum nonetheless the biggest by whole worth locked (TVL), reflecting its deep liquidity, broad developer ecosystem and institutional adoption. Nevertheless, Solana has emerged as one of many fastest-growing DeFi platforms, benefitting from excessive throughput, ultra-low charges and quickly increasing consumer engagement.
Latest information reveals Solana’s DeFi ecosystem holding greater than $9 billion in TVL, making it one of many prime networks exterior Ethereum and its Layer 2s, and in some intervals rivaling the mixed DeFi exercise of main Ethereum L2s.
Solana’s mannequin has pushed considerably larger onchain transaction quantity and lively wallets, particularly for buying and selling and high-frequency functions, whilst Ethereum retains general TVL dominance and the biggest share of institutional belongings.
Since that pivot final Could, R3 has spent the previous eight to 9 months nearly fully centered on one downside: how to tokenize the subsequent trillion {dollars} of belongings and bring them onchain in a manner that really works for traders. Meaning not simply issuing tokens, however designing merchandise that current onchain allocators need to use, and that conventional traders can develop into over time.
MacDonald mentioned R3 is already seeing a shift in focus on Solana towards capital formation and capital allocation, fairly than pure hypothesis.
Liquidity, MacDonald argued, is the actual bottleneck for tokenized real-world belongings.
“The beating coronary heart of DeFi is borrow and lend,” he mentioned. The breakthrough second will come when a tokenized real-world asset may be handled as credible collateral on equal footing with native crypto belongings. Right now, restricted liquidity, and in some instances inflexible permissioning, discourages DeFi traders from participating meaningfully with these merchandise.
Slightly than forcing demand, R3 is ranging from the place onchain urge for food already exists. MacDonald pointed to boom-and-bust cycles and notes that many subtle traders are actually on the lookout for yield that’s extra secure and fewer correlated to crypto markets.
“We’re making an attempt to bring these belongings onchain and bundle them in a DeFi-native manner,” he mentioned, whereas working carefully with current allocators to enhance entry.
The agency’s asset focus displays that technique. R3 is prioritizing higher-yielding merchandise, with personal credit score as a core pillar.
“You want a headline yield to get consideration,” MacDonald mentioned, noting that returns round 10% have a tendency to resonate strongly with onchain traders. On the identical time, these merchandise should stability return, liquidity and composability; a problem given that non-public credit score liquidity is commonly quarterly or “by appointment” in conventional markets.
Past personal credit score, R3 sees important alternative in commerce finance, the place MacDonald mentioned demand and provide are extremely elastic.
“If DeFi allocators actually leaned into commerce finance, the availability from the standard world is gigantic,” he explains, pointing to the sheer scale of the market and the potential for sustainable returns.
Commerce finance is notoriously opaque, spanning fragmented jurisdictions, bespoke contracts and uneven information requirements, which makes threat troublesome to worth, belongings arduous to standardize and liquidity gradual to scale regardless of the market’s monumental measurement.
On the issuer facet, R3 is already working with household-name funding managers, alongside an extended tail of asset house owners, from factories to delivery corporations, who see tokenization as a brand new distribution channel and a brand new mannequin for capital formation. The intention is not only to mirror off chain merchandise, however to redesign them so they’re investable, tradable and composable onchain.
Bettering liquidity may also require extra threat capital deployed straight onchain. MacDonald mentioned that whereas there are giant native DeFi gamers in the present day, participation stays slender.
“We’d like extra variety of stability sheets prepared to put capital to work,” he mentioned, alongside extra versatile redemption mechanisms that give traders real selection.
That imaginative and prescient underpins R3’s newly announced Corda Protocol. Constructed natively on Solana, the protocol introduces professionally curated, real-world-asset-backed yield vaults that situation liquid, redeemable vault tokens. Launching within the first half of 2026, the vaults are designed to give stablecoin holders entry to tokenized debt devices, funds and reinsurance-linked securities, with out sacrificing DeFi-style liquidity or composability.
“Property out there by means of Corda will likely be supported by protocol-native liquidity layer, enabling on the spot swaps out of in any other case illiquid or liquidity-constrained belongings for onchain traders. This unlocks the usage of the belongings as collateral at scale. The protocol will likely be built-in with prime curators and lending protocols to energy borrowing and levered place constructing,” MacDonald mentioned.
In an indication of sturdy early demand, Corda has acquired greater than 30,000 pre-registrations to date.
He framed the hassle as a direct response to a rising hole available in the market. As DeFi traders transfer away from purely speculative methods, demand is rising for secure, diversified yield that’s uncorrelated with crypto markets. Whereas tons of of billions of {dollars} in real-world belongings are actually represented onchain, most institutional-grade yield nonetheless forces capital to transfer off chain.
“Our purpose is to shut that hole,” MacDonald mentioned. “To bring Wall Road-quality belongings onchain in a manner that lastly is smart for DeFi, and to bring off chain capital into onchain markets at scale.”
Learn extra: ‘DeFi is dead’: Maple Finance’s CEO says onchain markets will swallow Wall Street
