Backed Finance Enabling Tokenization, Brings Fortlake’s Sigma Opportunities Fund On-Chain

In a major showcase of the increasing collaboration between the crypto and traditional finance industries, Backed Finance has announced that it’s partnering with Sonic and Chainlink to bring Fortlake Asset Management’s Sigma Opportunities Fund on-chain.

By tokenizing the fund, Backed and Fortlake say they’re making it more accessible, while opening the door to new opportunities in decentralized finance that can provide much greater value to investors.

Each of the four partners is playing a critical role in bringing Fortlake’s fund on-chain. In the case of Backed, a Swiss tokenization startup, its task is to bridge the gap between TradFi and DeFi. It’s issuing the ERC-20 “fund tokens” that are collateralized on a 1:1 basis with fund units, with the price tied to its real-time net asset value or NAV. The tokens are in full compliance with Switzerland's DLT act, making them a more palatable asset for institutional investors.

Fortlake is in charge of actually managing the Sigma Opportunities Fund, which gives investors access to an actively-managed fixed-income strategy that targets returns of 7% to 10% more than the U.S. Federal Reserve’s fund rate. The company was recently voted “Fixed Income Manager of the Year” in Australia, after the Fund returned 10% to investors in the last 12 months.

Sonic provides the underlying blockchain. Formerly known as Fantom, Sonic has built an rapid-speed, EVM-compatible Layer-1 network that supports 10,000 transactions-per-second with one-second finality, making it a popular choice for DeFi developers. As for Chainlink, its role is to ensure that the latest real-world Fund price data is reflected on-chain. It does this through its SmartData price feed. In addition, the Chainlink Proof-of-Reserves will be used to verify collateralization and the Chainlink CCIP will provide cross-chain liquidity.

With the Sigma Opportunities Fund now on-chain, developers will be able to integrate it into advanced DeFi applications. For instance, it can be utilized with new lending markets or as margin-trading collateral, or alternatively as a high-yield stablecoin savings product, Backed said.

Fortlake is leading the charge among TradFi asset managers, which are scrambling to follow the lead of BlackRock and explore the potential opportunities tokenization provides. Data from the Bank of America suggests that the value of tokenized assets might exceed $16 trillion within the next 5-15 years, not only because of the value the DeFi ecosystem provides, but also due to the significant savings enabled through on-chain transactions.

Backed co-founder Adam Levi said the tokenization of the Sigma Fund is a key milestone for the industry that illustrates how institutions can simplify their back-office processes and attract new capital. “This partnership reflects our commitment to transforming how financial assets are managed and traded,” he added.

It’s also a key moment for Backed itself, as it’s the first fixed-income fund from traditional finance to be brought on-chain through its tokenization-as-a-service platform. The success of the collaboration positions Backed as a leading player in terms of increasing accessibility to capital markets, reinforcing the view that tokenization will ultimately revolutionize the way people invest and trade in financial markets.

Backed is determined to become a leading player in private tokenization, with its TaaS platform able to support any kind of TradFi institution or investment fund.

Fortlake founder and Chief Information Officer Christian Bayliss said the tokenization of the Sigma Fund will make it easily accessible to the entire digital asset investor base. “We believe this collaboration marks the beginning of a new era in traditional asset management fund raising,” he said.

The partnership also helps to boost Sonic’s positioning in the DeFi industry, showcasing the ability of its network infrastructure to support the next generation of digital assets.

“This is one of the first steps for Sonic in its pathway to tokenizing financial assets across the globe,” said Sonic’s business development lead Sam Harcourt.