January 12, 2024

Polygon's CDK Empowers First Traditional Finance-Focused Ethereum Layer 2

The Polygon CDK takes center stage as major financial institutions collaborate to launch the inaugural Traditional Finance (TradFi)-focused Layer 2 chain on Ethereum.

The vision of "Institutions are coming" in the crypto industry, advocating for the democratization of traditional financial markets on the blockchain, is becoming a reality with Polygon's persistent efforts. Despite skepticism, the Polygon network is defying expectations, achieving milestones such as bringing Franklin Templeton and Hamilton Lane funds on-chain last year. Now, the Polygon ecosystem is gearing up to welcome the first Ethereum Layer 2 chain focused on traditional finance and backed by prominent financial institutions.

Polygon Labs introduced the Libre Chain in a post on January 10, powered by the Polygon CDK and supported by influential players in institutional blockchain adoption. This move signals the entrance of institutions into the Polygon ecosystem, as the blog post boldly declares, "the Institutions have arrived on Polygon".

Backing Libre Chain are notable entities like Laser Digital, a subsidiary of Japan's largest investment bank Nomura Group, WebN Group (an incubation hub supported by Brevan Howard's founder Alan Howard), Brevan Howard, Hamilton Lane, and Avtar Sehra, a visionary recognized for pioneering tokenization through his work with Nivaura.

Libre Chain, according to Polygon Labs, aims to empower regulated institutions to compliantly tokenize and issue alternative investments on the blockchain. The goal is to facilitate broader distribution for asset managers by streamlining legal, regulatory, and operational workflows securely.

Scheduled for launch in Q1 2024, the Ethereum Layer 2 chain will initially see adoption from Hamilton Lane and Brevan Howard. Beyond tokenized asset issuance, plans include introducing features like collateralized lending and automated rebalancing of separately managed accounts (SMAs).

Polygon co-founder Sandeep Nailwal expressed enthusiasm about Libre's potential to unlock new investment opportunities, citing the scalability and security of Polygon CDK.

Colin Butler, Head of Institutional Capital at Polygon Labs, had teased the Libre Chain launch earlier, creating anticipation within the Polygon community. Following the announcement, Polygon Labs CEO Marc Boiron asserted that the Polygon CDK is the ideal platform for bringing institutional assets on-chain, emphasizing its zero knowledge technology and modularity for maintaining a controlled environment while tapping into the DeFi ecosystem.

Libre joins Polygon's expanding multichain ecosystem powered by the CDK, alongside projects such as Palm Network, Flipkart, and OKX. The Polygon 2.0 roadmap envisions creating the ultimate value layer on Ethereum, allowing users to navigate the ecosystem seamlessly.

While the Libre Chain is yet to launch, its potential to attract more financial institutions represents a significant stride in achieving institutional adoption, a long-standing aspiration within the crypto industry.

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