R3 bets on Solana to bring institutional yield onchain

After greater than a decade constructing infrastructure for exchanges, monetary establishments and central banks, R3 noticed the market beginning to bend in a brand new path. A few 12 months in the past, the agency initiated a strategic reset, asking a easy however elementary query: what’s one of the best ways for purchasers to maneuver property totally onchain?

Todd MacDonald, R3’s co-founder, mentioned that course of coincided with a deep evaluate of the blockchain panorama.

“We spoke to basically all of the layer ones and layer twos,” he defined in an interview with CoinDesk, as R3 evaluated the place institutional capital markets had been most certainly emigrate. That work culminated in a strategic partnership with the Solana Basis, introduced final Might on the blockchain’s Speed up convention, he mentioned.

A layer 1 community is the bottom layer, or the underlying infrastructure of a blockchain. Layer 2 refers to a set of offchain techniques or separate blockchains constructed on high of layer 1s.

The choice, MacDonald mentioned, was grounded in a long-term conviction that each one markets will finally turn into onchain markets.

“We expect Solana is the perfect community for that future,” he mentioned, pointing to its construction, throughput and trading-first design. R3 got here to see Solana as “the Nasdaq of blockchains,” a venue purpose-built for high-performance capital markets relatively than normal experimentation.

Via its Corda blockchain platform, R3 helps greater than $10 billion in property and works with members together with HSBC, Financial institution of America, the Financial institution of Italy, the Financial Authority of Singapore, the Swiss Nationwide Financial institution, Euroclear, SDX and SBI, he mentioned.

Tokenization, the method of representing real-world property similar to shares and bonds as digital tokens tradable on blockchain networks, has emerged as one of many key use circumstances drawing rising curiosity and funding from conventional monetary establishments.

Exercise in decentralized finance (DeFi) stays focused on a handful of chains, with Ethereum nonetheless the most important by whole worth locked (TVL), reflecting its deep liquidity, broad developer ecosystem and institutional adoption. Nevertheless, Solana has emerged as one of many fastest-growing DeFi platforms, benefitting from excessive throughput, ultra-low charges and quickly increasing person engagement.

Latest information exhibits Solana’s DeFi ecosystem holding greater than $9 billionin TVL, making it one of many high networks exterior Ethereum and its Layer 2s, and in some durations rivaling the mixed DeFi exercise of main Ethereum L2s.

Solana’s mannequin has pushed considerably larger onchain transaction quantity and lively wallets, particularly for buying and selling and high-frequency purposes, at the same time as Ethereum retains total TVL dominance and the most important share of institutional property.

Since that pivot final Might, R3 has spent the previous eight to 9 months virtually totally centered on one downside: how one can tokenize the following trillion {dollars} of property and produce them onchain in a method that really works for buyers. Which means not simply issuing tokens, however designing merchandise that present onchain allocators wish to use, and that conventional buyers can develop into over time.

MacDonald mentioned R3 is already seeing a shift in give attention to Solana towards capital formation and capital allocation, relatively than pure hypothesis.

Liquidity, MacDonald argued, is the actual bottleneck for tokenized real-world property.

“The beating coronary heart of DeFi is borrow and lend,” he mentioned. The breakthrough second will come when a tokenized real-world asset might be handled as credible collateral on equal footing with native crypto property. Right now, restricted liquidity, and in some circumstances inflexible permissioning, discourages DeFi buyers from partaking meaningfully with these merchandise.

Fairly than forcing demand, R3 is ranging from the place onchain urge for food already exists. MacDonald pointed to boom-and-bust cycles and notes that many subtle buyers are actually in search of yield that’s extra steady and fewer correlated to crypto markets.

“We’re making an attempt to convey these property onchain and bundle them in a DeFi-native method,” he mentioned, whereas working carefully with present allocators to enhance entry.

The agency’s asset focus displays that technique. R3 is prioritizing higher-yielding merchandise, with personal credit score as a core pillar.

“You want a headline yield to get consideration,” MacDonald mentioned, noting that returns round 10% are likely to resonate strongly with onchain buyers. On the identical time, these merchandise should stability return, liquidity and composability; a problem given that non-public credit score liquidity is usually quarterly or “by appointment” in conventional markets.

Past personal credit score, R3 sees vital alternative in commerce finance, the place MacDonald mentioned demand and provide are extremely elastic.

“If DeFi allocators actually leaned into commerce finance, the provision from the standard world is big,” he explains, pointing to the sheer scale of the market and the potential for sustainable returns.

Commerce finance is notoriously opaque, spanning fragmented jurisdictions, bespoke contracts and uneven information requirements, which makes threat troublesome to cost, property arduous to standardize and liquidity sluggish to scale regardless of the market’s huge measurement.

On the issuer aspect, R3 is already working with household-name funding managers, alongside an extended tail of asset house owners, from factories to delivery companies, who see tokenization as a brand new distribution channel and a brand new mannequin for capital formation. The goal is not only to reflect off chain merchandise, however to revamp them so they’re investable, tradable and composable onchain.

Bettering liquidity will even require extra threat capital deployed immediately onchain. MacDonald mentioned that whereas there are giant native DeFi gamers right this moment, participation stays slender.

“We want extra variety of stability sheets prepared to place capital to work,” he mentioned, alongside extra versatile redemption mechanisms that give buyers real selection.

That imaginative and prescient underpins R3’s newly introduced Corda Protocol. Constructed natively on Solana, the protocol introduces professionally curated, real-world-asset-backed yield vaults that concern liquid, redeemable vault tokens. Launching within the first half of 2026, the vaults are designed to offer stablecoin holders entry to tokenized debt devices, funds and reinsurance-linked securities, with out sacrificing DeFi-style liquidity or composability.

“Property accessible by means of Corda might be supported by protocol-native liquidity layer, enabling on the spot swaps out of in any other case illiquid or liquidity-constrained property for onchain buyers. This unlocks the usage of the property as collateral at scale. The protocol might be built-in with high curators and lending protocols to energy borrowing and levered place constructing,” MacDonald mentioned.

In an indication of sturdy early demand, Corda has acquired greater than 30,000 pre-registrations up to now.

He framed the hassle as a direct response to a rising hole out there. As DeFi buyers transfer away from purely speculative methods, demand is rising for steady, diversified yield that’s uncorrelated with crypto markets. Whereas lots of of billions of {dollars} in real-world property are actually represented onchain, most institutional-grade yield nonetheless forces capital to maneuver off chain.

“Our purpose is to shut that hole,” MacDonald mentioned. “To convey Wall Avenue-quality property onchain in a method that lastly is sensible for DeFi, and to convey off chain capital into onchain markets at scale.”

Learn extra: ‘DeFi is useless’: Maple Finance’s CEO says onchain markets will swallow Wall Avenue