Robert Leshner, a prominent figure in the crypto space, gained recognition for launching the successful DeFi protocol Compound, making strides in automated, decentralized trading. Now, with Superstate, Leshner aims to combine the best aspects of DeFi with mainstream finance.
Other backers in Superstate’s Series A round include Breyer Capital, Galaxy, Arrington Capital, Road Capital, CMT Digital, Folius Ventures, Nascent, Hack VC, Modular Capital, and the Department of XYZ.
Superstate will use the fresh capital infusion to expand its team and develop private funds that allow institutional investors to leverage the programmable features synonymous with the crypto world. This involves enabling investors to acquire tokenized versions of bonds or other common assets, tradable or lendable on platforms akin to Uniswap, utilizing smart contracts for interest-bearing transactions.
To bring this vision to reality, Superstate has recently submitted a preliminary prospectus to establish the Superstate Short-Term Government Bond Fund. This will be an open-ended mutual fund, and its ownership records will be tracked on the Ethereum blockchain.
“A draft prospectus has been filed to create the Superstate Short-Term Government Bond Fund, an open-ended mutual fund with a secondary record of ownership tracked on the Ethereum blockchain,” Superstate said on its website.
In an interview with Fortune, Leshner stated that it will take months or more before such products go live. Superstate is currently focused on building the necessary financial infrastructure and obtaining regulatory clearances to offer products in the U.S.
While the concept of applying blockchains and DeFi tools to traditional finance isn’t new, Superstate believes it can succeed where previous attempts faltered. Leshner is confident in this outlook, citing the changed landscape of crypto and investing over the past five years. He notes that today, more investors are familiar with the benefits of blockchain-based asset exchange and are eager to integrate them into mainstream trading.
Leshner emphasizes the increased number of developers and asserts that the world is now ready for tokenized funds. Recent developments in banking, with institutions like JPMorgan and HSBC exploring blockchain services for trading equities and commodities, support Leshner’s belief that professional investors are increasingly open to incorporating crypto-style tools into their operations.
Superstate aims to launch its first products by early next year, pending approval from the SEC. Leshner mentions that the initial suite of products will be built on Ethereum, but the company may explore other blockchains in the future.
CoinFund CEO Jake Brukhman expressed support for Superstate, stating that its approach to tokenization will bridge the gap between compliant financial products and the innovative potential that DeFi brings to traditional finance.
“Superstate’s approach to tokenization will bridge the gap between high-quality compliant financial products and the massive advantages and innovation DeFi is poised to offer to traditional finance,” CoinFund CEO Jake Brukhman said in a statement.
