• Ethena Labs and Securitize are joining forces to launch Converge, a new blockchain for decentralized finance and tokenized assets.
• Converge will be Ethereum Virtual Machine-compatible and serve both retail and institutional DeFi.
• ENA price rose 5% to change hands above $0.38 following the announcement

Ethena Labs and Securitize are teaming up on a venture that will see the crypto projects unveil Converge, a new blockchain built for tokenized assets and decentralized finance.

Announced on Mar. 17, Converge will be a custom-built, Ethereum-compatible blockchain. The developers envision a platform that will cater to both everyday investors and deep-pocketed institutional players.

Per a blog post introducing the new blockchain, the anticipated launch date is Q2 2025.

Ethena, Securitize unveil Converge

According to Ethena Labs, Converge is a blockchain platform designed to bridge the gap between traditional finance and DeFi.

The technology behind the EVM-compatible chain will allow users to leverage user-friendly decentralized applications for retail investors. Converge will also offer a suite of top tools aimed at institutional investors.

Both Ethena Labs and Securitize plan to tap into the new blockchain to advance the DeFi and asset tokenization ecosystem. In this case, the partnership will see Ethena bring its burgeoning DeFi to Converge.

Securitize will also revamp its traction in the real-world asset (RWA) tokenization space. With nearly $2 billion minted, Securitize stands out as one of the top platforms championing the growth of tokenized assets.

Converge’s unveiling will bring an EVM-compatible settlement layer, driving new adoption for stablecoins and tokenized assets.

“We’re developing Converge to fill a clear gap in the market as the go-to settlement layer for institutional-grade DeFi and tokenized assets,” Guy Young, founder of Ethena Labs, said in a statement.

According to Young, “storage and settlement of stablecoins and tokenized assets” is set to be a massive opportunity in the coming years.

Stablecoins, blockchains and exchanges are a “holy trinity of crypto protocols” the Ethena Labs founder posted on X.

Further comments came from Carlos Domingo, the co-founder and CEO of Securitize. He noted:

“By combining Ethena’s innovation in DeFi with Securitize’s leadership in tokenizing real-world assets, Converge sets a new standard for how institutions can confidently engage with on-chain financial markets.”

Converge’s initial launch partners

The two firms will look to advance Converge via key industry collaborations. Helping the cause are initial launch partners, including Pendle, Aave Labs (via its Horizon project), Morpho, Ethereal and Maple Finance.

Converge’s RWA traction will also benefit from custodial support from Anchorage, Copper, Fireblocks and Zodia among other institutional-grade custody providers.

Also key will be interoperability partners LayerZero and Wormhole. Meanwhile, Converge will tap into oracle support from Pyth Network and RedStone.

Furthermore, Converge will use Ethena’s native governance token ENA for staking and security. The latter will tap into a permissioned validator set. The USDe and USTb stablecoins will power network transactions as gas tokens.

The news saw the ENA token jump more than 5% to trade above $0.38.

Ethereum (ETH) volumes appeared to be converging with those in its larger peer Bitcoin (BTC), recent data showed. The world’s second-largest cryptocurrency has seen a spike in interest this year ahead of a widely anticipated shift to a proof-of-stake (PoS) model.

ETH price has surged over 20% in the past two weeks, and was trading at around $3,400- close to breaking even for the year. Daily volumes have also steadily risen, averaging at roughly $20 billion over the past week.

BTC price also shot up to 2022 highs this week, and was trading around $47,000. But while volumes did increase, they were substantially lower than the massive amounts of liquidity seen in 2021. Still, the world’s largest cryptocurrency commanded over 40% of total crypto market capitalization.

But the latest crypto rally has also seen several altcoins vastly outperform BTC, while notching record highs in market capitalization. A similar scenario was observed during the start of the 2021 rally, which had eventually challenged BTC’s dominance.

ETH, BTC volumes seen converging

Data from blockchain research firm Kaiko showed that convergence in ETH and BTC volumes has been increasing since 2021. At certain points over the past year, the seven-day moving average volumes for the two tokens were at the exact same levels.

The data could point towards a broader shift in market structure, where BTC volumes taper further and market liquidity flows into several other projects. The proposed phenomenon is called “Altcoin Season.”

While BTC’s market dominance has so far remained unchallenged, its decreasing volumes could shake this status quo. The crypto market boom in 2021 severely undercut BTC’s market weightage, bringing it down to 42% today, from the massive 71% seen at the end of 2020.

Is it altcoin season?

Tokens including Cardano (ADA), Ripple (XRP), Terra (LUNA) and Solana (SOL) have blown past BTC in the past two weeks, in terms of price performance. Further gains in their market capital could threaten BTC’s dominance.

ETH’s shift to a PoS model has drawn institutional interest into several other projects in the sector. Increasing interest in DeFi, as well as scrutiny towards BTC’s high energy requirements could also draw capital away from the token.

Currently, the top 10 altcoins have a combined market capital of roughly $700 billion, compared to BTC’s $894 billion.

About Author

With more than five years of experience covering global financial markets, Ambar intends to leverage this knowledge towards the rapidly expanding world of crypto and DeFi. His interest lies chiefly in finding how geopolitical developments can impact crypto markets, and what that could mean for your bitcoin holdings. When he isn’t trawling through the web for the latest breaking news, you can find him playing videogames or watching Seinfeld reruns.
You can reach him at [email protected]