Disclaimer: Information found on CryptoreNews is those of writers quoted. It does not represent the opinions of CryptoreNews on whether to sell, buy or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk.
CryptoreNews covers fintech, blockchain and Bitcoin bringing you the latest crypto news and analyses on the future of money.
As DeFi investors pursue stable, uncorrelated returns, R3 is constructing Solana-native frameworks to integrate private credit and trade finance into the crypto markets.
R3 is focusing on Solana to facilitate institutional yield onchain. (Unsplash, modified by CoinDesk)
Key points:
- R3 has shifted its focus towards tokenization and onchain capital markets, with Solana as its foundational platform.
- The company is concentrating on high-return, institutional assets like private credit and trade finance, organized within DeFi-native structures.
- According to R3 co-founder Todd McDonald, the next breakthrough for real-world assets onchain will be liquidity, rather than tokenization itself.
After over a decade of developing infrastructure for exchanges, financial institutions, and central banks, R3 recognized a shift in the market’s trajectory. About a year ago, the firm embarked on a strategic overhaul, posing a fundamental question: what is the most effective method for clients to transition assets entirely onchain?
Todd McDonald, co-founder of R3, stated that this process coincided with a thorough examination of the blockchain ecosystem.
STORY CONTINUES BELOWDon’t miss another story.Subscribe to the Crypto Daybook Americas Newsletter today. See all newslettersSign me up
“We consulted with essentially all the layer ones and layer twos,” he elaborated in an interview with CoinDesk, as R3 assessed where institutional capital markets were likely to relocate. This effort culminated in a strategic alliance with the Solana Foundation, which was announced last May at the blockchain’s Accelerate conference, he noted.
A layer 1 network is the foundational layer, or the core infrastructure of a blockchain. Layer 2 refers to a collection of offchain systems or separate blockchains that are built atop layer 1s.
The decision, according to McDonald, was based on a long-term belief that all markets will eventually transition to onchain markets.
“We believe Solana is the optimal network for that future,” he stated, highlighting its architecture, throughput, and trading-first design. R3 began to view Solana as “the Nasdaq of blockchains,” a platform specifically engineered for high-performance capital markets instead of general experimentation.
Through its Corda blockchain platform, R3 manages over $10 billion in assets and collaborates with participants such as HSBC, Bank of America, the Bank of Italy, the Monetary Authority of Singapore, the Swiss National Bank, Euroclear, SDX, and SBI, he added.
Tokenization, the procedure of representing real-world assets like stocks and bonds as digital tokens that can be traded on blockchain networks, has become a key use case attracting increasing interest and investment from traditional financial entities.
Activity within decentralized finance (DeFi) remains focused on a select few chains, with Ethereum continuing to be the largest by total value locked (TVL), reflecting its robust liquidity, extensive developer ecosystem, and institutional acceptance. However, Solana has emerged as one of the rapidly growing DeFi platforms, benefiting from high throughput, extremely low fees, and swiftly expanding user engagement.
Recent statistics indicate that Solana’s DeFi ecosystem holds over $9 billion in TVL, positioning it among the leading networks outside Ethereum and its Layer 2s, and at times competing with the cumulative DeFi activity of major Ethereum L2s.
Solana’s approach has led to significantly heightened onchain transaction volume and active wallets, particularly for trading and high-frequency applications, even though Ethereum maintains overall TVL supremacy and the largest share of institutional assets.
Since that strategic shift last May, R3 has dedicated the past eight to nine months primarily to one challenge: how to tokenize the next trillion dollars of assets and transition them onchain in a manner that is genuinely beneficial for investors. This involves not merely issuing tokens, but creating products that existing onchain allocators will want to utilize, and that traditional investors can gradually adapt to over time.
McDonald noted that R3 is already observing a shift in focus on Solana towards capital formation and allocation, rather than pure speculation.
Related Posts
Liquidity, McDonald asserted, is the principal obstacle for tokenized real-world assets.
“The central aspect of DeFi is borrowing and lending,” he stated. The pivotal moment will arrive when a tokenized real-world asset can be regarded as credible collateral on par with native crypto assets. Currently, limited liquidity, and at times inflexible permissioning, discourages DeFi investors from engaging meaningfully with such products.
Instead of creating demand artificially, R3 is initiating its approach based on existing onchain demand. McDonald pointed to boom-and-bust cycles and remarked that many sophisticated investors are currently seeking yields that are more stable and less correlated with crypto markets.
“We aim to transition these assets onchain and package them in a DeFi-native manner,” he explained, while collaborating closely with current allocators to enhance accessibility.
The firm’s asset emphasis reflects this strategy. R3 is concentrating on higher-yield products, with private credit as a fundamental component.
“A compelling yield is essential to attract attention,” McDonald stated, observing that returns around 10% tend to resonate strongly with onchain investors. Simultaneously, these products must find a balance between return, liquidity, and composability; a challenge given that private credit liquidity is often quarterly or “by appointment” in traditional markets.
Beyond private credit, R3 identifies substantial opportunities within trade finance, where McDonald noted that both demand and supply are highly elastic.
“If DeFi allocators were to truly engage with trade finance, the supply from the traditional sector is vast,” he elaborated, highlighting the market’s immense scale and the potential for sustainable returns.
Trade finance is notoriously opaque, covering fragmented jurisdictions, customized contracts, and inconsistent data standards, which complicate risk pricing, asset standardization, and liquidity scaling despite the market’s enormous size.
On the issuer side, R3 is already collaborating with well-known investment managers, as well as a broader range of asset owners, from factories to shipping companies, who view tokenization as a novel distribution channel and a fresh model for capital formation. The goal is not merely to replicate off-chain products, but to redesign them so they are investable, tradable, and composable onchain.
Enhancing liquidity will also necessitate deploying more risk capital directly onchain. McDonald mentioned that while there are significant native DeFi players today, participation remains limited.
“We require a greater diversity of balance sheets willing to deploy capital,” he stated, along with more adaptable redemption mechanisms that provide investors with genuine choices.
This vision is at the core of R3’s newly unveiled Corda Protocol. Built natively on Solana, the protocol introduces professionally curated, real-world-asset-backed yield vaults that issue liquid, redeemable vault tokens. Slated for launch in the first half of 2026, the vaults are designed to provide stablecoin holders with access to tokenized debt instruments, funds, and reinsurance-linked securities, without compromising DeFi-style liquidity or composability.
“Assets accessible through Corda will be supported by a protocol-native liquidity layer, allowing instant swaps out of otherwise illiquid or liquidity-constrained assets for onchain investors. This facilitates the use of the assets as collateral at scale. The protocol will be integrated with leading curators and lending protocols to enable borrowing and leveraged position development,” McDonald stated.
In a testament to strong early interest, Corda has garnered over 30,000 pre-registrations to date.
He framed this initiative as a direct response to a widening gap in the market. As DeFi investors move away from purely speculative strategies, there is increasing demand for stable, diversified yield that does not correlate with crypto markets. While hundreds of billions of dollars in real-world assets are currently represented onchain, most institutional-grade yield still necessitates moving capital offchain.
“Our objective is to bridge that gap,” McDonald asserted. “To bring Wall Street-quality assets onchain in a way that ultimately makes sense for DeFi, and to channel offchain capital into onchain markets at scale.”
Read more: ‘DeFi is dead’: Maple Finance’s CEO says onchain markets will swallow Wall Street
