In one day, the price of Hedera surged as BlackRock's MMF tokenized news boosted the coin's value, attracting attention to the collaborative resources behind it
The announcement of "BlackRock Fund Tokenization" stimulated Hedera tokens to rise over 106% at one point, but they have since retreated. Although BlackRock did not participate in the development of Hedera's MMF tokenization, its strong collaborative resources have always attracted market attention, and this year Hedera is also heavily investing in supporting its own ecosystem.Author: Nancy, PANews
On April 24, the UK FCA-regulated digital asset exchange Archax announced a partnership with the HBAR Foundation to provide tokenized shares of BlackRock's US Treasury Money Market Fund. The news of Hedera's involvement in the tokenization of BlackRock's MMF was interpreted by the market as a positive signal, causing the price of its token HBAR to surge over 106%, although it has since retraced.
Meanwhile, although BlackRock did not participate in the development of Hedera's MMF tokenization, its strong collaborative resources have always attracted market attention, and this year Hedera is heavily investing in its own ecosystem.
Collaborating to Tokenize BlackRock's MMF, First Multi-Million Dollar Transaction Completed
The announcement pointed out that in the current high-interest-rate environment, MMFs (money market funds) are a useful tool with the potential to provide institutional stability and yield for short-term debt product investments, while reducing counterparty risk from a single bank or stablecoin provider. Additionally, by creating a secondary market for tokenized instruments, investors can benefit from nearly instant transfer of MMF shares throughout the day, and these tokens can also be used for collateral transfers, not just traditional subscriptions/redemptions.
With the tokenization of BlackRock's ICS US Treasury Money Market Fund, users no longer need to go through cumbersome application processes to purchase; instead, they can trade BlackRock's MMF directly on the Archax platform or through on-chain networks. Currently, the first multi-million dollar transaction of tokenized shares of BlackRock's MMF has been completed on the Ownera Finp2P digital asset network, and this transaction has also been tokenized on Hedera.
This collaboration is based on the tokenization of Abrdn's MMF conducted by Archax on the Hedera and Ethereum blockchains in 2023. Abrdn is the largest asset management company in the UK, with assets exceeding $669.1 billion.
In response, Archax CEO and co-founder Graham Rodford stated that different asset managers' money market funds can follow different underlying investment themes, such as investing in short-term government debt issuances, thus necessitating a range of different products to meet client needs. Archax has expanded its offerings by adding more funds to its tokenized MMF portfolio, catering to a broader range of client demands.
HBAR Foundation CEO Shayne Higdon remarked that the addition of tokenized MMF shares on Hedera, supported by Archax, is a significant vote of confidence in Hedera. The speed, security, and low-cost infrastructure of Hedera have been validated, and it is hoped that more TradFi institutions will join Hedera to realize more RWA cases in the future.
The announcement also sparked misunderstandings, with Chris O'Connor, founder of the Cardano Ghost Fund DAO, pointing out that BlackRock "did not participate" in Hedera's development and criticized the way the HBAR Foundation framed the announcement. He stated, "What actually happened is the HBAR project, which tokenized BlackRock's fund shares through the secondary market. Just like I can buy a Rolex watch, take a picture of it, and post it on my X account, it doesn't mean Rolex is collaborating with me."
As a result, CoinGecko data shows that the price of the token HBAR fell sharply after peaking at $0.18, having dropped about 23.5% from its high as of the time of writing.
Council Members Mostly from Traditional Giants, Planning to Allocate Over $600 Million for Ecosystem Development
The on-chain trading of tokenized shares of BlackRock's MMF is also a significant reason for the buzz and speculation surrounding Hedera. It is worth noting that as one of the largest asset management groups in the world, BlackRock manages over $10 trillion in assets, and its positioning in RWA is a focal point for the market.
However, Hedera has been deepening its connections with giants. According to the latest disclosures from Hedera, its council members come from many well-known crypto-native institutions and traditional giants, including over 30 organizations such as BitGo, Chainlink, Google, Boeing, Deutsche Telekom, Nomura Securities, IBM, DELL, LG, Ubisoft, Mondelēz International, and more.
The addition of these members has brought strong collaborative resources to Hedera, such as Google Cloud partnering with Hedera Hashgraph to operate its network nodes, gaming giant Ubisoft joining the Hedera governance council to further explore the crypto space, LG Electronics collaborating with Hedera to launch an NFT platform, and food company Mondelēz International working on DLT-based solutions developed on Hedera.
In addition to these council members, Hedera has also formed partnerships with other institutions in various fields such as payments, technology development, and automotive. For example, the Federal Reserve's instant payment system FedNow has added support for Hedera's small payment platform Dropp as a service provider, Hedera signed a $250 million, five-year cooperation agreement with the Saudi Ministry of Investment to launch a "DeepTech Venture Studio" to develop technological solutions, Hyundai and Kia launched a carbon emissions monitoring system based on the Hedera network, and Hedera collaborated with the Algorand ecosystem to develop a new DeRec standard.
To date, Hedera has reported that its ecosystem projects exceed 80, covering sectors such as DeFi, wallets, stablecoins, NFTs, the metaverse, gaming, and exchanges. This year, Hedera has also begun to increase its support for ecosystem and technology implementation. As early as January this year, the Hedera council announced that it had voted to approve the allocation of an additional 4.86 billion HBAR (currently valued at $680 million) to further develop the Hedera ecosystem and achieve decentralized governance.
In summary, although Hedera's announcement regarding "BlackRock Fund Tokenization" contains some speculative elements, the rich resources of partners and substantial ecosystem support are attracting significant market attention.
