Introduction to Avalanche Spruce Subnet
The Evergreen Subnet, “Spruce,” has been launched with an initial cohort of institutional partners that includes T. Rowe Price Associates, WisdomTree, Wellington Management, and Cumberland. Participating institutions will be using Spruce as a testnet for a variety of applications and assets to measure the benefits of on-chain trade execution and settlement.
Benefits of Avalanche Spruce Testnet
- Provides a low-risk environment for buy- and sell-side institutions to engage with public blockchain infrastructure.
- Allows participants to use valueless tokens to explore Avalanche’s Subnet architecture without capital risk.
- Enables experimentation with DeFi applications for executing foreign exchange (FX) and interest rate swaps.
- Facilitates research and development in tokenized equity, credit issuance, trading, and fund management.
Will Peck, Head of Digital Assets at WisdomTree, expressed enthusiasm: “Avalanche Spruce provides an opportunity to further explore the potential efficiencies and benefits of on-chain trading and settlement with other financial institutions.”
Onboarding and Security Measures
Upon onboarding, institutions’ wallets are issued non-transferable tokens (NTTs) and undergo KYC/KYB checks. Their wallet addresses are embedded in an allowlist to monitor chain-level access. Smart contract deployers also undergo onboarding for their activities on Spruce.
Potential Benefits of On-Chain Financial Transactions
A recent report highlighted potential benefits in FX and cross-border payments, such as payment vs payment transactions, atomic settlement, and reduced counterparty risk.
Mark Garabedian, Director of Digital Assets and Tokenization at Wellington Management, emphasized the potential operational efficiencies and reduced risks: “Avalanche Subnets provide a potential settlement solution that enables financial transactions with enhanced operational efficiencies, reduced risks, and regulatory compliance.”
Conclusion
John Wu, President of Ava Labs, sees Spruce as a significant step towards exploring the possibilities of digital finance: “This groundbreaking collaboration creates a secure, controlled, and exciting opportunity for the world’s financial institutions.”
Spruce and the Evergreen Subnets aim to address key challenges in permissioned DeFi, aiming for broader institutional adoption of public blockchain infrastructure.
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