Compound’s creator wants to back a TradFi fund with Ethereum

Robert Leshner – founder of Compound

Robert Leshnerfounder of the DeFi protocol Compoundwishes to create Superstatea short-term government bond fundthe traditional financebut backed by Ethereum blockchain as secondary recording tool.

Various players, like EDX Markers recently, are working to reconcile crypto and traditional finance. Robert Leshnercreator of the Compound lending protocol – who has just given up his CEO seat to Jayson Hobby – is one of them with his project Superstate.

Robert Leshner has filed an application with the American financial authorities. He wished to create a funda seemingly traditional fund. It would invest in short-term government bonds U.S. Treasury bills, government agency securities and other guaranteed instruments.

A secondary ledger on the blockchain

Its very operation would remain traditional, since it would involve a “transfer agent” whose function is to maintain the ownership records of the fund’s holders. A DeFi player, however, Leshner proposes a differentiating element.

Ownership of certain fund shares will also be registered on one or more blockchains, initially the Ethereum blockchain, in the form of secondary blockchain registers,” the project states.

Superstate therefore proposes to rethink the management of these traditional funds thanks to blockchain, presented as a way to provideoperational efficiency andimprove the shareholder experience.

Ethereum enables P2P trading of securities

The next step, once the authorities have given the go-ahead, will be to enable the fund’s shares to be traded in peer-to-peer modei.e. without intermediaries. Purchases, sales and transfers between holders would operate directly on the secondary register.

As a result, “the transfer agent’s official register would be reconciled and matched regularly with the secondary registrations of the blockchain to carry out any peer-to-peer transfer of shares”.

Today, I’m excited to announce the founding of a new company, @superstatefunds

Superstate’s mission is to create regulated financial products that bridge traditional markets & blockchain ecosystems.

– Robert Leshner (@rleshner) June 28, 2023

For Leshner, Superstate is “the first step in a long journey towards modernize financial markets (…) Eventually, hundreds of trillions of offline assets will end up on blockchains,” he continues.

At the same time, the project collected 4 million dollars from ParaFi Capital, 1kx, Cumberland Ventures and Distributed Global.

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