A few days ago, Backed Finance announced the launch of the tokens Coinbase Stock (bCOIN) and S&P 500 (bCSPX) on the Avalanche C-Chain network.
Thanks to these tokens, eligible DeFi users will be able to gain on-chain exposure to both the S&P500 and Coinbase.
The new tokens from Backed Finance on Avalanche: bCOIN (Coinbase) and bCSPX (S&P 500)
bCOIN is nothing more than a token that tokenizes the shares of Coinbase on-chain.
Coinbase is a company listed on the stock exchange since 2021 with the ticker COIN, and thanks to the bCOIN token, it will be possible to obtain on DEX an indirect exposure to the stock market performance of Coinbase’s share price. It is also absolutely one of the largest crypto companies in the world listed on the stock exchange.
bCSPX, on the other hand, tokenizes the S&P 500 index, which is the main benchmark of the U.S. stock market.
The Standard & Poor 500 index was created by Standard & Poor’s in 1957 and tracks the performance of a stock basket composed of the 500 largest U.S. companies by market capitalization.
The objective of this double launch is to bridge the gap between traditional finance and DeFi.
Backed Finance and the RWA revolution on Avalanche
Backed Finance is creating an accessible, efficient, and transparent financial ecosystem.
This is a company that is creating a platform for the tokenization of real-world assets (RWA), particularly stocks, indices, ETFs, and bonds, to make them available on blockchain.
The tokens created by Backed Finance to tokenize RWA (Real World Asset) are collateralized 1:1 with the underlying assets, as Backed Finance purchases one unit of each asset for every RWA token issued.
Such tokens are called bToken, and they are transferable on EVM blockchain (Ethereum Virtual Machine) to be used in DeFi applications. Additionally, they are designed to be composable with other DeFi protocols.
Backed Finance also operates in accordance with Swiss laws for the issuance of security tokens, and its platform allows for easy redemption of bToken into stablecoins like USDC.
Avalanche: the network for the tokenization of RWAs
The launch of bCSPX and bCOIN on Avalanche aims to be a systemic step towards the mainstream adoption of tokenized securities.
In fact, the presence of these tokens on Avalanche opens up a series of possibilities for DeFi users.
First of all, it allows for indirect exposure to the S&P 500 and to stocks Coinbase on-chain.
However, it also allows for improved yield opportunities, because in addition to simply holding these tokens, users can also provide liquidity on PharaohExchange and earn an additional yield through Avalanche’s incentive program.
Moreover, thanks to Chainlink CCIP, bCSPX and bCOIN can be easily connected and exchanged with other chains, such as Base and Gnosis Chain, and this interoperability also allows for taking advantage of arbitrage opportunities and access to potentially deeper liquidity pools.
This cross-chain functionality is achieved thanks to the Backed bridge powered by Chainlink CCIP or by aggregators such as Bungee, Jumper, and Swaps.io.
Finally, the bCSPX and bCOIN pools on PharaohExchange improve the liquidity of the tokens, making it easier for users to buy and sell without significant price slippage.
The future of DeFi
The tokenization of the S&P500 and Coinbase shares unlocks various DeFi applications.
Now, for example, users can easily diversify their crypto portfolios with exposure to the U.S. stock market, or use their bToken as collateral in lending protocols to access capital without having to sell their own assets. They can also leverage them to create synthetic assets, further expanding the potential of the DeFi ecosystem.
This is why this launch aims to be a systemic step towards the mainstream adoption of tokenized assets.
