Introduction
Intain Inc., a leading structured finance platform, has launched IntainMARKETS, a marketplace for tokenized asset-backed securities built as an Avalanche Subnet. By launching as a Subnet, IntainMARKETS aims to meet regulatory and other application-specific requirements as it aims to solve core challenges for a market which created $2T of new mortgage-backed and asset-backed securities in 2022, according to SIFMA.
IntainADMIN Success
Intain’s first platform, IntainADMIN, now facilitates the administration of more than $5.5B in assets across more than 25 deals. In October 2022, Asset-Backed Alert reported that Wilmington Trust, a leading provider of wealth and institutional services for M&T Bank Group, would partner with Intain to apply blockchain technology to mortgage-bond transactions. Leading trust banks involved in the U.S. securitizations market, WSFS Bank and UMB Bank, already work with Intain to provide Paying Agent services.
Benefits of IntainMARKETS
IntainMARKETS’ digital marketplace automates and integrates functions of key stakeholders in structured finance, including:
- Issuer
- Verification agent
- Underwriter
- Rating agency
- Servicer
- Trustee
- Investor
Rather than replacing trust intermediaries, it integrates them onto a single platform and process to enable digital issuance and investment with a complete on-chain workflow. Intain calls this ‘efficient intermediation’, which it prefers over ‘disintermediation.’
Where traditional off-chain processes have made some sub-$100 million transactions prohibitively expensive, efficiencies achieved through the on-chain platform may allow IntainMARKETS to make $8–10 million transactions more economically viable.
Improved Investor Experience
Today, someone’s mortgage may be financed by someone else’s pension fund investment linked through a complex process called securitization, which has become a multi-trillion dollar industry. This process–including issuance, secondary market trading, and fund administration–is facilitated currently through disparate systems and across multiple institutions, resulting in siloed truth, high costs, and illiquidity.
With IntainMARKETS, the investor experience can be dramatically improved, delivering real-time transparency into every single loan backing an investment, as well as the ability to collect returns on a more timely basis. On the other side, 50–100bps in reduced costs for asset issuers may allow them to tap into a wider investor pool through smaller transaction sizes.
Industry Insights
“Attempts by the blockchain industry thus far have focused on tokenization, but for a financial instrument based on a complex structure, tokenization itself neither addresses the need of transparency nor efficiency,” said Siddhartha, Founder and CEO of Intain.
In July, Wells Fargo piloted the IntainMARKETS platform after selecting Intain as the only decentralized finance (DeFi) platform among eight finalists for its Innovation Challenge 2022.
“We’re grateful for the support from financial institutions who are our current partners and encouraged by the response from notable issuers and investors in the industry. The commitment of Ava Labs and the wider Avalanche ecosystem who share our vision of fully compliant blockchain-enabled systems for financial services, has been critical to the launch of IntainMARKETS,” added Siddhartha.
Why Avalanche
Intain chose Avalanche to build MARKETS on because of the blockchain’s Subnet architecture, which allows institutionally-focused firms to create permissioned networks that comply with particular regulatory frameworks and other considerations.
The IntainMARKETS Subnet has U.S-hosted infrastructure, which allows data to reside domestically, while validators chosen by network participants must also be verified U.S. entities and individuals. The Subnet economics are not dependent on any public token, and transaction costs are independent from those of the Avalanche C-Chain and other Subnets.
Future Prospects
“Intain MARKETS is one of the first structured finance marketplace we have seen that combines tokenized issuance and investment with end-to-end administration on-chain,” said John Wu, President at Ava Labs. “The sheer scale of the opportunity with IntainMARKETS is impressive. We want Avalanche to be the blockchain protocol of choice for traditional financial assets to come on-chain and this platform addresses a $2 trillion issuance market opportunity.”
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