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Tokenized Fund Adoption Grows but Brings Technology Risks: Moody's
Entities providing tokenization tech have a limited track record and may contribute to increased risk, a new report by analysts at the credit-rating agency says.
Jan 15, 2024, 9:00 a.m.
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The adoption of tokenized investment funds is on the rise – but the technology providers have a “limited track record,” contributing to increased risk, a Monday report by credit-rating agency Moody’s Investor Services warned.
Tokenized funds are investment funds whose units are digitally represented with the use of distributed ledger technology (DLT), which powers crypto. Asset or fund tokenization is having a moment as financial institutions worldwide attempt to improve market liquidity, efficiency and transparency. The growing adoption of tokenized funds – mostly fueled by the tokenization of funds that invest in government securities like bonds – signals untapped market potential, according to the report by Moody's DeFi and Digital Assets team.
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“Tokenized funds’ potential applications extend beyond merely enhancing asset liquidity. These funds have a variety of other possible functions, including serving as collateral,” the report said.
However, tokenization requires “additional” technological expertise, the report’s authors warned. Investment funds come with their risks stemming from things like the underlying assets and fund management. Tokenized funds could bring additional risks connected to DLT, according to the report.
“The entities involved on the technology side often have limited track records, increasing the risk that in the case of bankruptcy or technological failure, payments may be disrupted,” the report said.
That’s not stopping adoption, though, according to Moody's analysts. Big players from Franklin Templeton and Goldman Sachs to Hong Kong’s Monetary Authority have recently participated in the issuance of tokenized assets.
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Pudgy Penguins is building a multi-vertical consumer IP platform — combining phygital products, games, NFTs and PENGU to monetize culture at scale.
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Pudgy Penguins is emerging as one of the strongest NFT-native brands of this cycle, shifting from speculative “digital luxury goods” into a multi-vertical consumer IP platform. Its strategy is to acquire users through mainstream channels first; toys, retail partnerships and viral media, then onboard them into Web3 through games, NFTs and the PENGU token.
The ecosystem now spans phygital products (> $13M retail sales and >1M units sold), games and experiences (Pudgy Party surpassed 500k downloads in two weeks), and a widely distributed token (airdropped to 6M+ wallets). While the market is currently pricing Pudgy at a premium relative to traditional IP peers, sustained success depends on execution across retail expansion, gaming adoption and deeper token utility.
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Bitcoin miners surge higher as Anthropic's fundraising efforts boost AI spirits
Anthropic is set to raise $20 billion in its latest funding round, double the amount it initially targeted, according to the FT.
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- Anthropic, the maker of the Claude chatbot, is set to raise about $20 billion in new funding at a valuation of $350 billion, according to the Financial Times.
- That's double the amount the company initially sought to raise.
- The news is boosting spirits in the AI sector, with bitcoin miners turned AI infrastructure providers like IREN, TeraWulf, Cipher Mining and Hut 8 surging higher.
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