Evelyn Wilder

tZERO and Alphaledger Forge Strategic Relationship to Accelerate Tokenization Across Public and Private Markets

Initial projects include tokenized fund and other private products and shared mission to transform public markets through tokenization.

tZERO Group, Inc., a pioneer in blockchain-powered capital markets, today announced a strategic relationship with Alpha Ledger Technologies, Inc. (Alphaledger) that unites two leaders at the forefront of financial innovation.

By bringing together Alphaledger’s expertise in digital product development with tZERO’s leading end-to-end, regulated primary and secondary infrastructure and tokenization leadership, the collaboration aims to fast-track the tokenization, distribution, and secondary trading of assets on blockchain. The two organizations also intend to lead discussions regarding broader and faster public market adoption of blockchain technology.

Under the framework, tZERO and Alphaledger will:

  • Bring tokenized equities to market by developing and distributing securities created by Alphaledger and made available for trading on a regulated platform operated by tZERO’s broker-dealer subsidiaries, and tokenized using leading Layer 1 and Layer 2 protocols.
  • Launch the next generation of funds by working to tokenize Alphaledger’s forthcoming Government Money Market Fund, and to enable seamless distribution and trading through the regulated platform operated by tZERO’s broker-dealer subsidiaries.
  • Expand investor access to yield products by working to quote tokenized shares of the Alphaledger/Simplify Target 12% Distribution Fund to the regulated platform operated by tZERO’s broker-dealer subsidiaries.
  • Champion the future of tokenization through joint advocacy for public market adoption of blockchain technology and developing products and solutions for tokenization of public equities, while exploring integration and partnership opportunities with a range of blockchain ecosystems.

On-chain securities are critical to the next generation of internet capital markets – regulated, transparent, and always on. They enable continuous access, fractional ownership, and programmable settlement – capabilities that traditional infrastructure cannot efficiently support. With blockchain scalability, regulatory clarity, and institutional participation converging, Alphaledger – together with tZERO – is positioning itself at the forefront of this transformation.

“No one can do it alone in the tokenization space. Success demands best of breed partners. And that is the goal that we set for ourselves. This initiative is about combining Alphaledger’s proven product innovation with tZERO’s market-leading expertise in compliance and digital marketplaces to deliver the next wave of tokenized investment opportunities,” said Alan Konevsky, Chief Executive Officer of tZERO. “Together, we are building the bridge between traditional finance and blockchain-powered markets. tZERO’s genesis is grounded in using blockchain and smart contracts to evolve the public capital markets. That mission has been reignited. We look forward to partnering with Manish and his team on these product, infrastructure and advocacy initiatives.”

“The market is hungry for transparency, efficiency, and access to innovative products. By teaming up with Alphaledger, we’re fast-tracking the arrival of tokenized funds and equities across blockchain ecosystems, while ensuring they trade on a regulated, trusted marketplace. This is a pivotal step in making digital securities a mainstream reality,” said Al Swimmer, Chief Strategic Relationships Officer at tZERO.

Founded by former PIMCO executive, Manish Dutta, Alphaledger has a track record of pioneering blockchain-based regulated financial products, including tokenized municipal bonds and the recently launched private alternative income fund T12 with Simplify Asset Management. Its securities tokenization platform, Vulcan Forge, integrates SEC-registered transfer-agent recordkeeping, an SEC/FINRA/MSRB-registered broker-dealer, and an exempt investment advisor – providing issuers and investors with a unified path from origination to secondary trading. Together, Alphaledger’s deep product expertise and industry reach complement tZERO’s regulated infrastructure, compliance, and secondary market capabilities.

“The market needs industrial-grade rails for the next generation of on-chain investors,” said Manish Dutta, Co-Founder & CEO of Alphaledger. “tZERO demonstrated the promise of tokenization in equity markets, and we are now at the precipice of a new era – 24/7 tokenized securities markets that expand access, increase transparency, and lower costs. At Alphaledger, we are standardizing how regulated securities live on Solana, while tZERO provides the regulated infrastructure and investor access. Together, we’re making tokenization real: day-one production for issuers and day-one liquidity for investors.”

“Institutions don’t need hype; they need throughput, controls, and exits,” added Chris Wade, Co-Founder & CTO at Alphaledger. “With tZERO, we’re delivering all three: high-performance issuance on Solana, transfer-agent discipline, and a regulated venue for secondary liquidity.”

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Breaking Down the T12 Fund: High-Yielding Income for Accredited Investors

Founded in 2019, Alphaledger has assembled a core team of pioneers in technology and real-world assets to streamline debt financing and increase engagement with investors. The company provides comprehensive, end-to-end investment solutions that are seamless, secure, and fully compliant, maintaining the highest standards of regulatory oversight.

The Target 12% Distribution Fund (T12) is Alphaledger Investment Management’s flagship fund. A treasury alternative and private credit alternative designed to deliver high monthly yield while giving investors the transparency and efficiency of on-chain securities. It aligns perfectly with Alphaledger’s mission to make wealth creation accessible, liquid, and secure through blockchain-powered tokenization.

What Sets Alphaledger Apart From The Others?

Alphaledger is redefining how capital is raised and deployed. It was the first to bring municipal debt to the blockchain, tokenizing over $800 million in real-world assets and setting a new institutional-grade standard. Its vertically integrated model, including a SEC/FINRA-regulated broker-dealer and transfer agent, and an Exempt Reporting Advisor, ensures full compliance from onboarding to settlement.

According to CEO Manish Dutta, Alphaledger is creating infrastructure that can reinvent capital flow between issuers and investors.

“At Alphaledger, we’re building a securities tokenization infrastructure to modernize the capital markets – from origination through distribution – and bringing greater efficiency and liquidity to private credit and alternative income.”

How T12 Works

T12 is a tokenized private investment fund managed by Alphaledger Investment Management, with Simplify Asset Management acting as the sub-advisor. Paisley Nardini, Head of Multi-Asset Solutions at Simplify, says about the partnership:

“The partnership combines Alphaledger Investment Management’s technology-driven market expertise with Simplify’s investment strategies.“

Together, they seek to deliver high monthly income by investing in a diversified portfolio of alternative income-generating strategies. This allows investors to diversify, access high returns, and benefit from blockchain-enabled efficiency and transparency.

How Can Investors Use The T12 Fund?

Investors have two options when investing in the T12 Fund. Investments can be made in US Dollars or stablecoins, making it accessible to both traditional and digital asset investors. The fund is offered on a continuous basis, allowing accredited US-based investors to subscribe at any time, and requires a minimum investment of $50,000 and charges a 1% fee to cover management, administration, and operational costs. Investors will also receive a Schedule K-1 for tax purposes.

The fund recently completed its first USDC-funded subscription. The transaction moved capital directly into a professionally managed, income-focused strategy and issued on-chain units for ownership records.

What Benefits Does The T12 Fund Offer

The T12 fund uses a dynamic and diversified income approach. Benefits include:

  • Portfolio Diversification: The T12 fund gives investors exposure to actively managed, alternative income-generating strategies.
  • Income Generation: The T12 fund has a target distribution of 12% annualized, making it an excellent option for investors wanting a high-yielding income stream to supplement retirement or ongoing cash flow needs. The fund’s daily liquidity allows investors to adjust their investment positions to align with their financial goals and adapt to evolving market conditions.
  • Institutional Allocation: The fund appeals to institutional investors, thanks to its distinctive strategy balancing a blend of high-yield, low-duration, fixed income, hedged credit, and options strategies, which could generate income while managing risk.
  • Risk Management: The fund uses active management and dynamically adjusts asset allocation to target attractive distributions and limit drawdowns through a risk-aware approach.
In Closing

The T12 Fund seeks to deliver high-yield income with daily liquidity, combining institutional-grade strategies with the transparency of on-chain securities. A true Treasury and Private Credit Alternative, it offers diversification, competitive yield, and fully compliant, blockchain-powered access to opportunity.

Get in touch with the Alphaledger Investment Management team to explore subscription opportunities. Demand more from your portfolio!

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Compliance-by-Design: The Foundation for Trust in Digital Assets

In today’s volatile, highly scrutinized market, trust is the most valuable currency. But for digital assets to earn long-term credibility with institutional investors who demand accountability, compliance can’t be an afterthought. It must be engineered into the system from the start. This is the principle of compliance-by-design, and the standard Alphaledger is built on.

What is Compliance-by-Design?

Compliance-by-design enables the embedding of regulatory logic, auditability, and reporting mechanisms directly into smart contracts governing digital assets.

Instead of launching a product and retrofitting compliance after regulatory feedback or worse, compliance-by-design ensures that every transaction, ownership change, and cash flow adheres to predefined rules.

Using this approach, smart contracts can and should handle:

  • Automated KYC/AML and sanctions screening at the wallet level
  • Jurisdiction-based transaction permissions
  • Real-time disclosures of holdings, coupon flows, and cap table updates
  • Immutable audit trails for regulators and counterparties

By hardwiring compliance into the fabric of the asset, Alphaledger eliminates manual intervention, reduces bottlenecks, and counterparty risks.

How Has The Lack Of Compliance Hindered Web3?

Regulatory challenges and compliance have become significant hurdles for Web3, creating uncertainty and preventing its growth and adoption.

  • Compliance can be expensive and time-consuming. Companies must divert resources from innovation and invest heavily in compliance measures.
  • Strict regulations often stifle innovation, creating significant barriers for new projects. This discourages companies from investing in and developing new technologies.
  • Regulations vary from one country to another. Web3 companies must navigate a maze of different regulatory and legal standards to operate globally.
  • Most countries lack clear regulations for Web3 technologies, making it challenging for platforms to operate within these jurisdictions.
Automating Risk Controls at the Wallet Level

Legacy systems perform compliance checks off-chain through manual reviews, third-party checks, and cumbersome reconciliation processes. This leads to friction, delays transactions, and introduces operational risks.

Alphaledger’s infrastructure allows KYC, AML, and sanctions checks to be automated at the wallet level. Transactions are permissioned by smart contracts that verify eligibility before execution, eliminating human error and mitigating exposure to bad actors in real time, tightening counterparty risk without adding overhead.

On-Chain Disclosure Beats Paper Trails

Quarterly reports and manual disclosures are relics from a bygone era. Compliance-by-design allows investors to access real-time, on-chain records of:

  • Asset holdings
  • Coupon payments
  • Ownership transfers
  • Cap table changes

Such a high degree of transparency builds confidence. Investors no longer have to trust opaque statements or wait for scheduled reporting cycles. Instead, they see the data as it happens verifiable on-chain and available 24/7.

Reducing Operational Costs Through Automation

Compliance is often viewed as a necessary yet costly drag on efficiency. Compliance-by-design flips this narrative. Alphaledger automates filings, digital signatures, cap table updates, and audit trails, reducing the administrative burden on issuers and investors alike.

Smart contracts don’t need human compliance officers to verify each step. They execute according to code, creating a scalable compliance layer that lowers both risk and cost.

Multi-Jurisdiction Readiness Without Rebuilding

Traditional financial products require bespoke compliance builds for each jurisdiction, a costly and cumbersome process.

Alphaledger uses parameterized rule sets within smart contracts to handle jurisdictional compliance dynamically. Whether an asset is sold under U.S. Rule 144A or within the EU under MiFID II, the same contract can apply different permissions and reporting standards.

This flexibility allows issuers to expand across markets without fragmenting product lines or rebuilding compliance logic

Investor Protection Built into the Protocol

True investor protection isn’t a disclaimer, it’s a design choice. Alphaledger embeds safeguards directly into its architecture. This includes:

  • Protected cash accounts
  • Bankruptcy-remote structures
  • Segregation of client assets enforced by smart contracts

These safeguards give institutions the confidence to hold tokenized assets with the same assurance they expect from traditional CUSIP securities.

The Liquidity Unlock

Institutions will not adopt tokenized assets at scale unless they meet the same compliance standards as legacy financial instruments. Compliance-by-design bridges that gap making tokenized assets holdable by funds, custodians, and other regulated entities.

Where ad-hoc compliance wrappers create friction and fragmentation, native compliance scales with asset classes, enabling broader adoption without sacrificing trust.

Future-Proofing with Transparent Governance

Regulations will evolve. Markets will change. Contracts that are locked or inflexible will become obsolete.

Alphaledger’s contracts are built with upgradeability and transparent governance in mind. This allows our infrastructure to adapt ensuring assets remain trusted and compliant not just for today’s regulations but for the decades ahead.

Conclusion

Trust isn’t earned by promises, it’s built into the system. Alphaledger’s compliance-by-design approach provides a durable, scalable foundation for tokenized finance, giving issuers, investors, and regulators a common language of trust on-chain. This isn’t about ticking boxes. It’s about reengineering capital markets for transparency, efficiency, and resilience by design.

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Alphaledger and Moody’s Complete Proof of Concept on Solana

Alphaledger and Moody’s Ratings Successfully Complete Proof of Concept for Municipal Security Rating on Solana Blockchain

Alphaledger, a pioneer in tokenized real-world assets, and Moody’s Ratings, a global leader in credit ratings, are excited to announce the successful completion of a groundbreaking proof of concept (PoC) that disseminates a municipal bond rating on-chain by integrating the credit rating information into a security token on the Solana blockchain. This innovative collaboration marks a significant milestone in bridging traditional finance with decentralized systems, showcasing the potential for standardized credit ratings dissemination mechanisms for tokenized real-world assets (RWAs).

The PoC, conducted in a simulation environment, demonstrated the technological feasibility of the API integration of data between on-chain and off-chain environments through the automated submission of municipal security data to Moody’s Ratings, and the dissemination of the assigned credit rating on the blockchain. Moody’s credit rating information was seamlessly incorporated into Alphaledger’s municipal security tokenization engine resulting in a security token minted on Solana during the PoC.

The successful execution of this PoC highlights several key achievements:

  • Incorporation of Credit Ratings into Blockchain technology: Incorporating a Moody’s Ratings credit rating into a Solana-based security token validates the technological feasibility of combining established financial services with decentralized infrastructure.
  • Scalability for Tokenized RWAs: The PoC paves the way for scalable on-chain ratings dissemination mechanisms applicable to a wide range of tokenized assets, from municipal bonds to corporate bonds, enhancing investor confidence and market adoption.
  • Leveraging Solana’s Capabilities: Utilizing Solana’s layer 1 capabilities, the PoC provides promising evidence for the Solana blockchain platform’s suitability for institutional-grade financial applications, supporting secure and efficient tokenization.

“This collaboration with Moody’s Ratings is a transformative step toward modernizing financial markets,” said Manish Dutta, CEO of Alphaledger. “By incorporating trusted credit rating information into a tokenized municipal security on Solana, we’ve demonstrated a potential scalable model that can unlock liquidity to real-world assets by providing investors access to a trusted brand like Moody’s Ratings”

“This PoC with Alphaledger showcases how our ratings can be disseminated on chain to enhance transparency and trust in tokenized assets to meet the evolving needs of digital finance,” said Rajeev Bamra, Associate Managing Director and Head of Strategy for Digital Economy at Moody’s Ratings. “We continue to embrace innovation in finance and actively explore new avenues for digital finance ecosystem to access our credit assessments.

The PoC sets a precedent for future collaborations, offering a blueprint for how tokenized RWAs can integrate with traditional financial systems to meet institutional standards. By combining Moody’s Ratings trusted credit analysis with Alphaledger’s cutting-edge blockchain solutions, this initiative signals a new era of accessibility and efficiency in asset management.

For details on Moody’s Ratings, visit www.moodys.com.

About Alphaledger
Founded in 2019, Alphaledger is a leader in tokenizing real-world assets, providing end-to-end solutions through its regulated blockchain infrastructure. Headquartered in Poulsbo, Washington, Alphaledger is transforming traditional markets by delivering transparency, efficiency, and accessibility to investors worldwide.

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Whitepaper: The Arc of Regulated Asset Tokenization

Introduction

The tokenization of regulated assets — stocks, bonds, ETFs, alternative investments and other securities — marks a fundamental transformation in how capital markets operate. At Alphaledger, we believe this transformation follows a clear, five‑phase journey — the “Arc of Regulated Asset Tokenization” — that guides traditional assets onto blockchain networks while respecting the guardrails of securities law. In this paper, we weave those phases into a single narrative that shows how tokenization evolves from bold experimentation to true, on‑chain ownership.

From Frontier Experiments to Institutional Adoption

PHASE 1: THE WILD FRONTIER

Tokenization was born in the crucible of decentralized finance, when pioneers, driven by little more than curiosity and ambition, deployed smart contracts on permissionless blockchains. They minted tokens, engineered nascent lending protocols, and launched decentralized exchanges. Public chains like Ethereum demonstrated a powerful compounding effect: every new dApp, project, or token built on the network amplified the value of the original token, creating a virtuous cycle of innovation.

But this frontier also attracted excess. Meme coins, speculative “grifts”, and extreme volatility recalled the panics of early stock markets — 1907’s bank runs and the 1929 crash. In the spirit of Winston Churchill who famously stated, “never let a good crisis go to waste”, the ecosystem evolved. Just as those TradFi crises ultimately spawned modern clearinghouses, deposit insurance, and robust regulation, the chaos in Phase 1 sparked a wave of technological hardening and the first serious conversations with regulators.

PHASE 2: BUILDING STABILITY

In Phase 2, the industry shifted from wild experimentation toward stability and institutional rigor. Building on the lessons of Phase 1, developers and early adopters hardened smart‑contract protocols, established clear governance frameworks, and integrated on‑chain products with traditional custody and compliance systems. Stablecoins evolved into reliable cash‑management instruments, liquidity pools adopted risk‑controls familiar to money‑market funds, and regulators began pilot programs to validate blockchain’s record‑keeping integrity. This maturation laid the groundwork for a robust financial ecosystem, one in which on‑chain assets could be valued, audited, and trusted just as off‑chain securities are today.

Despite the stabilization, legacy institutions in Phase 2 continued to dismiss the on-chain revolution unfolding around them — just as bond houses once hesitated while Bill Gross rewrote the rules of fixed income trading.

The Turning Point: Real‑World Assets On-Chain

PHASE 3: UNLOCKING TOKENIZED ASSETS

We stand at a critical inflection point, moving beyond experimentation to unlock the true utility of tokenized assets. In this third phase of financial evolution, stocks, bonds, and funds are seamlessly tokenized on public blockchains, marrying the stability of traditional finance (TradFi) with the transformative innovation of the crypto era. This convergence delivers unprecedented value to investors, offering a compelling blend of attractive yields, flexible custodial models, and accelerating regulatory clarity — thus setting the stage for a new era of on-chain investing.

Tokenized assets bridge the gap between the low returns of ultra-safe investments and the high volatility of crypto markets, addressing what we call the “missing middle.” Unlike tokenized money-market funds that mimic treasuries or speculative crypto plays that court excessive risk, this next generation of assets — exemplified by Alphaledger’s T12 Fund — aims to deliver a balanced risk-return profile previously unavailable on-chain. By targeting yields that outpace treasuries while approaching the upside of crypto investments, these assets offer investors a compelling alternative, combining stability with the potential for enhanced returns in a single, accessible package.

To ensure investor choice without compromising security or compliance, tokenized assets support multiple custodial models. Self-hosted multi-party computation (MPC) wallets empower users with direct control, while custodial wallets and traditional custodian models provide familiar options. This flexibility caters to diverse investor preferences — whether crypto-native or TradFi-focused — while upholding the rigorous standards required for on-chain assets. By integrating these models, platforms like Alphaledger ensure that security and compliance remain paramount, fostering trust in the tokenized ecosystem.

Fueling this transformation is a rapidly evolving regulatory landscape. Over the past 12 months, both the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have signaled a progressive shift, expressing support for tokenization projects. This momentum has paved the way for no-action letters and pilot programs that embed investor protection directly into blockchain protocols. As regulatory clarity accelerates, the conditions are set for tokenized assets to scale, offering a compliant, transparent framework that aligns with the needs of investors and regulators alike. Together, these advancements herald a future where tokenized assets redefine wealth creation, delivering both accessibility and stability on public blockchains.

The New Settlement Standard

PHASE 4: ATOMIC SETTLEMENTS

Traditional markets settle on a T+1 or T+2 cadence, relying on intermediaries and netting systems to exchange securities for cash. Blockchain’s promise is “T‑Now™” — instant, atomic settlement with absolute finality. By embedding Delivery‑Versus‑Payment directly into smart contracts, tokenization eliminates counterparty risk and unlocks novel use cases — like practical, intra‑day repo markets that optimize liquidity in real time.

Even as fiat off‑ramps persist, emerging bank‑issued and sovereign stablecoins will blur the line between on‑chain and traditional capital flows. The result: a settlement layer that is faster, safer and more adaptable than anything before it.

The Endgame: Dominium – True On‑Chain Ownership

PHASE 5: DOMINIUM

The ultimate vision of the Arc is a world we call Dominium — where “the street has no name.” Instead of holding securities in a broker’s “street‑name” omnibus account, investors register tokens directly in their own wallets. Self‑custody and MPC/TSS‑enabled wallets become the new bank and brokerage accounts. Assets — from equities to real estate to intellectual property — are universally accessible, programmable, and capable of serving as on‑chain collateral.

In Dominium, financial power shifts from centralized institutions to individuals. No paper, no omnibus accounts, no legacy ledgers — just direct, cryptographic proof of ownership.

Conclusion

Innovation rarely follows a straight line. The Arc of Regulated Asset Tokenization charts a deliberate path: Phase 1’s experimentation, Phase 2’s stabilization, Phase 3’s real‑world bridging, Phase 4’s atomic finality and Phase 5’s true on‑chain ownership. Each phase reduces reliance on traditional intermediaries while layering fresh capabilities that reshape markets. Regulators and legislators are already rewriting the rulebook. Institutions that embrace this journey will define the next era of finance; those that wait risk obsolescence.

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Special Districts Insurance Services (SDIS) of Oregon Joins Alphaledger

Special Districts Insurance Services (SDIS) of Oregon has joined Alphaledger’s network, creating a new source of liquidity for Oregon’s special purpose districts. SDIS, which provides insurance coverage to members of the Special Districts Association of Oregon (SDOA), will now offer financing options through Alphaledger’s technology-driven solution. 

The collaboration has already demonstrated success with the recent placement of a Tax and Revenue Anticipation Note for the Gaston Fire District, where SDIS served as the purchaser. This transaction showcases how special districts can efficiently access capital for operational and infrastructure needs through the platform. 

By joining Alphaledger’s network, SDIS strengthens its mission of supporting local districts while leveraging real-time transaction capabilities and transparency to deliver reliable funding solutions across Oregon communities. 

About Alphaledger

Alphaledger is a leading provider of blockchain infrastructure for fixed income assets, focused on origination and the development of autonomous settlement. The company’s platform is designed to streamline the entire lifecycle of financial assets, from origination to settlement, by leveraging the power of blockchain technology. Notably, Alphaledger pioneered the recording of municipal loans and securities on its platform. The company is committed to driving innovation and efficiency in the financial services industry.

Securities transactions will be conducted through Alphaledger Markets, Inc., a broker-dealer, registered with SEC,FINRA, the MSRB, and SIPC, and  wholly owned by Alpha Ledger Technologies (“Alphaledger”). SIPC. Check the background of ALM on FINRA’s BrokerCheck.

Alphaledger is a technology company focused on providing technology to its subsidiaries and prospective clients. It does not lend itself to the solicitation of securities activities, as it can only be done by prospectus and via a registered broker dealer such as Alphaledger Markets.

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Port of Morrow Secures $277 Million in Financing

Boardman, OR—The Port of Morrow (the “Port”), through its advisor SDAO Advisory Services (SDAOAS), has secured $277 million in short-term financing to fund the expansion of its industrial wastewater treatment facilities. The financing was underwritten by Northland Securities, Inc. and Celadon Financial Group and facilitated by Alphaledger’s innovative blockchain platform, which provided a streamlined and secure solution for this significant transaction.

This crucial funding will enable the Port to enhance its wastewater treatment infrastructure, bringing it into compliance with state environmental regulations. The project includes increasing wastewater storage capacity, adding new anaerobic digesters for primary treatment, and upgrading secondary systems to reduce nitrogen levels. This expansion is key to ensuring that the Port continues to meet the region’s growing industrial wastewater needs.

“The Port of Morrow is dedicated to promoting economic development in Morrow County, and this financing is a critical step in ensuring that we have the infrastructure to support that mission,” said a representative from the Port.

The Port is awaiting additional long-term funding through the federal Water Infrastructure Finance and Innovation Act (WIFIA), which is expected to cover a significant portion of the total $432 million project cost. In the meantime, this short-term financing ensures that the project can move forward, allowing the Port to maintain momentum on development efforts.

David Ulbricht of SDAO Advisory Services praised the role of technology in securing the financing: “Alphaledger’s blockchain platform was instrumental in connecting the Port with a broad network of liquidity providers, and Celadon Financial Group’s underwriting ensured the deal was structured effectively to meet the Port’s immediate needs. This collaboration highlights the power of innovative financial solutions in advancing public infrastructure projects.”

“With over 30 years in public finance, it’s evident that the municipal market can significantly benefit from purpose-built technology,” said Tom Weyl of Celadon. “The Alphaledger platform enhances access to funding while providing a critical tool for underwriters and advisors to ensure transparent, auditable records. I’m proud to have worked with the Port, SDAOAS, and Alphaledger on this project, helping advance this technology.”

Manish Dutta, CEO of Alphaledger, expressed his enthusiasm about the transaction. “This financing demonstrates how our platform can deliver value by providing an efficient, secure pathway to capital. We are pleased to support the Port of Morrow and SDAOAS on this project.”

“The Alphaledger platform facilitates seamless connections between issuers, their advisors, and market participants, providing a secure and efficient way to structure deals and finalize pricing,” said Jim Tinker, VP of Product Development at Alphaledger and a former municipal banker. “Giving issuers access to a wide network of liquidity providers ensures critical infrastructure projects, such as the Port of Morrow, get funded.”

As construction moves forward, the Port is working closely with its industrial and agricultural partners to responsibly manage wastewater discharge. The expanded facilities will support the region’s growing industrial base while safeguarding the natural environment.

The successful partnership between the Port, SDAOAS, Alphaledger, and Celadon Financial Group marks a significant milestone in utilizing blockchain technology to advance public infrastructure, securing both immediate and long-term benefits for Morrow County’s economy.

About Port of Morrow

The Port of Morrow is Oregon’s second-largest port and a vital economic hub for the region, supporting industries ranging from food processing and energy production to transportation and logistics. Its mission is to promote economic development and job creation in Morrow County while prioritizing sustainable practices and responsible resource management.

About SDAO Advisory Services

SDAO Advisory Services is a public advisory organization that provides expert financial and operational guidance to special districts and municipal entities across Oregon, helping them navigate complex financial transactions and infrastructure projects.

About Celadon Financial Group

Celadon Financial Group is a full-service investment bank and broker-dealer specializing in underwriting, structuring, and advising on capital market transactions. With a focus on innovative financial solutions, Celadon supports clients across public, private, and non-profit sectors.

About Alphaledger

Alphaledger is a leading provider of blockchain infrastructure for fixed income assets, focused on origination and the development of autonomous settlement. The company’s platform is designed to streamline the entire lifecycle of financial assets, from origination to settlement, by leveraging the power of blockchain technology. Notably, Alphaledger pioneered the recording of municipal loans and securities on its platform. The company is committed to driving innovation and efficiency in the financial services industry.

Alphaledger is a technology company focused on providing technology to its subsidiaries and prospective clients. It does not lend itself to the solicitation of securities activities, as it can only be done by prospectus and via a registered broker dealer such as Alphaledger Markets, Inc., “ALM”. ALM is wholly owned by Alphaledger and is registered with SEC, FINRA, the MSRB and SIPC. Check the background of ALM on FINRA’s BrokerCheck.

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Whitepaper: Atomic Transactions

A New Era for Financial Market Efficiency, Beginning with On-Chain Origination

Introduction

In a world of ever-expanding complexity, the need for efficiency, security, and transparency is increasingly pressing. One of the most important areas in need of innovation is the infrastructure that underpins our financial systems. Blockchain technology has the potential to offer transformative advancements for the financial system in general, and the fixed income market specifically. However, for the benefits of blockchain technology to be fully realized in the fixed income market, it is essential that we begin the transition at the point of origination – not in the middle when the trade economics and records are already set.

Origination is the foundation of any financial instrument, and in the case of fixed income securities, it sets the stage for the entire lifecycle of the asset. By originating debt directly on blockchain, we establish a base to conduct all subsequent transactions within a secure, immutable, and transparent environment. This shift is crucial for facilitating the seamless transfer of value, reducing reconciliation friction, and enhancing the overall security of financial data.

At the heart of this process lies the concept of atomic transactions. An atomic transaction is a type of transaction that is indivisible and irreversible. In the context of blockchain, it means that a transaction either happens in its entirety or not at all, with no intermediate states. This ensures that all parties involved in a transaction can trust that once a transaction is executed, it is final and cannot be altered. This level of security and certainty is paramount in the financial markets, where the cost of errors can be substantial.

An atomic transaction is indivisible and irreversible.

In contrast, a non-atomic transaction is prone to fragmentation, heightening the risk of incomplete execution. Fragmentation arises due to multiple handoffs during the transaction process. In the traditional financial system and on permissioned blockchains, this means that transactions can occur in segments, creating intermediate states. These intermediate states, representing partial completion, introduce potential errors and failures, leading to inefficiencies such as the need for “batching” to achieve netting and reconciliation. This fragmentation significantly increases the risks associated with transaction execution.

Today’s fixed income infrastructure is a non-atomic batching system where trades are accumulated at set intervals, typically daily, and during these intervals various risks accumulate. The most significant of these is counterparty risk or the risk of failed trades. To address counterparty/fail risk, two mitigation processes are used – a central counterparty (CCP) and multilateral netting.

The current batch-based system for trade settlement was developed fifty years ago and reflects the technological constraints at the time. Current settlement is dominated by the Depository Trust & Clearing Corporation (DTCC) – a single central choke point – designated as a Systemically Important Financial Market Utility (SIFMU) by federal financial regulators because its failure could threaten the stability of the US financial system.

With increasing regulatory requirements, the shortening of settlement cycles, and evolving market demands, we need to look ahead to anticipate market needs. Rather than piecemeal automation solutions, Alphaledger is harnessing the power of purpose-built technology to implement atomic transactions.

By originating debt on the blockchain through atomic transactions, we can create a robust foundation that supports the entire lifecycle of an asset, from issuance to trading, settlement, and beyond. This approach not only streamlines operations but also lays the groundwork for a more secure and efficient financial ecosystem.

Alphaledger has positioned itself at the forefront of this transformation by utilizing blockchain network infrastructure for the origination and settlement of primary originations in fixed income markets. This infrastructure is designed to support the most efficient transfer of value possible, leveraging blockchain technology to streamline and secure transactions.

This paper compares the efficiency of blockchain atomic transactions with the non-atomic / batched functions of DTCC, highlighting the strengths and weaknesses of each approach.

Blockchain Atomic Transactions: The New Standard in Efficiency

The concept of “state” is crucial in understanding the difference between atomic and non-atomic transactions. Atomic transactions ensure that the state remains consistent by either completing all steps or none at all, thus preserving data integrity. In contrast, non-atomic transactions can result in multiple state changes, which may lead to inconsistencies if not carefully managed. This distinction is vital for maintaining the reliability and accuracy of operations in distributed systems and blockchain networks.

The future of fixed income is atomic!

Varied states in a non-atomic transaction can introduce risks, due to the potential for inconsistency or failures when transitioning states. The various forms of risk include settlement, counterparty, inefficient use of capital, legal and compliance, and reconciliation, which can lead to financial losses, regulatory issues, and operational challenges. Understanding and managing these risks is critical for ensuring the reliability and integrity of financial transactions.

Permissioned Networks and Data Resiliency

Permissioned blockchain network infrastructure – a “walled garden” – offers a highly trusted environment. In this type of network, multiple copies of reconciled data are provided to all approved participants, ensuring data consistency and reducing potential errors. The key advantage of this system is that it allows only the parties involved in a transaction to access the same network, thereby eliminating the need for time-consuming reconciliations that plague traditional systems.

However, due to the inherent limitations of a permissioned network, it is not possible to execute a single atomic transaction that spans multiple payment networks simultaneously. This constraint necessitates separate transactions for each payment network, potentially impacting overall transaction efficiency and synchronization. Additional critical drawbacks include:

  1. Adoption – Market participants must adopt each other’s infrastructure, much like creating a trusted network.
  2. Fragmentation – No standard for infrastructure development and deployment.
  3. Inconsistency – No standard for atomic transactions.
  4. Expensive – High cost of maintenance and deployment.

For these reasons, only a network built on a public blockchain is capable of delivering the full benefits of atomic transactions.

Public Blockchain: Resiliency in Record Keeping and Cybersecurity

Public blockchains, by design, offer unparalleled resiliency in record keeping. The distributed nature of these networks ensures that multiple identical copies of every transaction and record are stored across numerous nodes globally. This decentralization makes the blockchain inherently resistant to data loss, tampering, or single points of failure, creating a robust and reliable system for maintaining financial records.

In a world where the integrity and availability of financial data are crucial, public blockchains provide a level of redundancy that is difficult to match with traditional centralized systems. This resiliency is particularly valuable in the context of disaster recovery, where the ability to quickly restore access to accurate and up-to-date records can make the difference between continuity and disruption.

Cybersecurity Strengths

Public blockchains are fortified by advanced cryptographic techniques that ensure the security of transactions and data. Each transaction on the blockchain is secured through encryption and linked to the previous one, forming an immutable chain of records. This immutability makes it virtually impossible for malicious actors to alter past records without detection, providing a high level of cybersecurity that surpasses traditional financial systems.

Moreover, the decentralized nature of public blockchains means there is no central point of attack, making them less vulnerable to hacks or breaches. In contrast, centralized systems like those operated by the DTCC remain susceptible to targeted cyberattacks, which could compromise the security of vast amounts of sensitive financial data.

Misunderstanding of Privacy Concerns

One common misconception about public blockchains is the perceived lack of privacy. While it is true that transactions on a public blockchain are transparent and can be viewed by anyone, this does not equate to a lack of privacy for the participants.

Transparency does not equate to lack of privacy.

Public blockchains use pseudonymous addresses instead of real-world identities, meaning that while the transaction details are visible, the identities of the parties involved are not readily apparent.

Furthermore, advanced privacy-enhancing technologies, such as zero-knowledge proofs and confidential transactions, are being developed and implemented on public blockchains to further enhance user privacy. These technologies allow transactions to be verified without revealing sensitive information, ensuring that privacy concerns are addressed while maintaining the transparency and security that make blockchain technology so powerful.

Foundation for High-Performance Delivery Versus Payment (DVP)

The Alphaledger blockchain platform is purpose-built for the origination and high-performance settlement of regulated fixed income assets, and is designed for speed, reliability, and maximum efficiency. By leveraging a public blockchain with built-in liquidity through multiple stablecoins, Alphaledger seeks to ensure secure and efficient transaction processing. A key differentiator is Alphaledger’s focus on the Delivery Versus Payment (DVP) process, which enables simultaneous gross settlement of securities and funds transfer. This eliminates the need for netting or end-of-day reconciliation, significantly reducing settlement time and risk. The ability to settle at the time of trade execution offers near-instantaneous finality, ensuring the most efficient transfer of value.

The Inefficiencies of Batched (Non-Atomic) Delivery Versus Payment (DVP)

The DTCC plays a central role in the U.S. securities industry, providing clearing, settlement, and information services for a wide range of securities. This centralized approach has inherent inefficiencies, which are directly related to the batching structure of trade settlement. To mitigate counterparty / fail risk associated with batching, two processes are utilized – central counterparty (i.e. street name) and multilateral netting.

Cede & Co., acting as the legal owner of securities on behalf of the DTCC’s subsidiary, the Depository Trust Company (DTC), holds securities in its name for the benefit of the actual owners. This intermediary role, while established as an industry standard, is not without its drawbacks. The centralized custody and clearing function results in monopoly conditions, creates a systemically risky single point of failure, and creates substantial limitations on innovation.

Limitations of DTCC’s Blockchain Adoption

While the DTCC has taken steps to optimize its operations by acquiring a blockchain firm, this effort falls short of the full potential of blockchain technology. The DTCC’s approach focuses on optimizing existing clearing and settlement functions rather than fully embracing distributed trade execution and settlement. Consequently, the benefits of blockchain—such as reduced settlement times, lower costs, and enhanced security—are not fully realized within the DTCC’s current framework.

Non-atomic settlement processes also introduce several inefficiencies that can impact broker-dealer activities. Delayed settlement periods, operational complexity, higher costs, settlement risks, inefficient use of capital, regulatory compliance challenges, and limited flexibility all contribute to a less efficient trading environment. These inefficiencies underscore the potential benefits of adopting atomic settlement processes enabled by blockchain technology, which can provide faster, more secure, and cost-effective solutions for broker-dealers.

Comparative Analysis: Atomic vs Batched Settlement

Efficiency of Realtime Blockchain Atomic Transactions

  • Speed: Blockchain atomic transactions enable near-instantaneous settlement, drastically reducing the T+X (1-10 days) timeframe during origination to T+0 or T-Now™. This eliminates cash drag at the point of origination, where settlement processing is the longest.
  • Security: With all participants accessing a single, immutable ledger, the potential for errors is minimized, and the risk of fraud is significantly lower.
  • Cost: By removing intermediaries and reducing the need for reconciliation, atomic blockchain transactions lower the overall cost of trade settlement.

Inefficiency of Non-Atomic Batched Settlement

  • Delay: The T+X settlement process introduces unnecessary delays, creating settlement risks and increasing the cost of capital for market participants.
  • Concentration: The centralized nature of the DTCC, coupled with its reliance on intermediaries like Cede & Co., results in monopoly conditions and creates a systemically risky single point of failure.
  • Limited Innovation: While the DTCC has made some strides in adopting blockchain technology, its efforts are constrained by its traditional operating model, preventing the full realization of blockchain’s benefits.

Conclusion

Alphaledger’s blockchain-based atomic transaction model offers a compelling alternative to the traditional DTCC settlement process. By leveraging blockchain, Alphaledger seeks to provide a faster, more secure, and cost-effective solution for trade origination and settlement. In contrast, the DTCC’s centralized, non-atomic approach remains burdened by inefficiencies and unnecessary risks. As the financial markets continue to evolve, the shift towards blockchain and atomic transactions will take root, offering significant benefits to all market participants and the overall US financial system.

Whitepaper: Atomic Transactions Read More »

Podcast: Moody’s Talks – Focus on Finance

Muni loans and bonds at the cutting edge of financial technology.

We talk to Alphaledger co-founder and CEO Manish Dutta about his firm’s quest to rebuild the fixed income market’s financial infrastructure, using blockchain.

Speakers: Manish Dutta, co-founder and CEO, Alphaledger; Gregory Sobel, AVP-Analyst, Moody’s Ratings
Host: Danielle Reed, VP – Senior Research Writer, Moody’s Ratings

Listen on Moody’s

 

Podcast: Moody’s Talks – Focus on Finance Read More »

Alphaledger Secures Series A Funding Led by EJF Ventures

Alphaledger, a leading provider of blockchain infrastructure for fixed income assets, focused on the origination and development of autonomous clearing, announced the first closing of its Series A funding round led by EJF Ventures, the investment arm of EJF Capital, with participation from KDX and strategic investors.

The funding will accelerate product development, expand footprint and support the continued adoption of Alphaledger’s innovative blockchain platform focused on asset origination and the development of autonomous clearing.

Alphaledger also announced a new commercial agreement with Tradeweb Markets to jointly develop new products leveraging its blockchain technology, continuing its collective efforts to deliver cutting-edge technology that strengthens the market infrastructure.

Manish Dutta, CEO of Alphaledger, said, “We are thrilled to have the backing of such esteemed investors as EJF Capital and KDX, and to partner with Tradeweb as we continue to nurture the evolution of our markets. Their combined expertise in financial services, technology, and global markets will be invaluable as we scale our platform and unlock the full potential of blockchain technology for capital markets participants.”

Alphaledger’s platform is designed to streamline the asset origination and clearing process with a focus on increasing transparency, lowering costs, and reducing settlement time for financial institutions.

Jonathan Bresler, Managing Partner of EJF Ventures, commented, “Modernizing legacy financial infrastructure is essential as market participants grapple with the challenges of an increasingly real-time world. Alphaledger’s innovative approach from asset origination through the life of the bonds is designed to reduce cash drag and execution risk for the market participants (issuers, banks, underwriters, investment managers) and improve operational efficiency. We believe Alphaledger has applicability across many lines of financial services, and we are excited to support the exemplary team at Alphaledger.”

“Alphaledger’s platform will revolutionize the fixed income markets,” said Ashby Monk, who invested in Alphaledger through KDX and is the Executive Director of Stanford’s Initiative on Long-Term Investing. “As early investors, we’re thrilled to witness Alphaledger’s ongoing expansion and its potential to revolutionize market dynamics. Their commitment to asset origination on blockchain, within the confines of the US regulatory landscape, is inspiring broad-based market adoption. We’re proud to stand behind the exceptional team driving Alphaledger forward.”

Michael Piwowar, Strategic Advisor to Alphaledger and former Acting Chairman of the SEC, stated, “The integration of blockchain technology into the regulated securities market is most valuable if it improves the quality of the market within the safeguards of the regulated framework. That is what Alphaledger is doing.”

About Alphaledger

Alphaledger is a leading provider of blockchain infrastructure for fixed income assets, focused on origination and the development of autonomous clearing. The company’s platform is designed to streamline the entire lifecycle of financial assets, from origination to settlement, by leveraging the power of blockchain technology. Notably, Alphaledger pioneered the recording of municipal loans and securities on its platform. Alphaledger was founded in 2019 by former PIMCO executives Manish Dutta, Tammie Arnold, and Chris Wade (consultant to PIMCO). The company is committed to driving innovation and efficiency in the financial services industry.

About EJF Capital

EJF Capital LLC is a global alternative asset management firm headquartered outside of Washington, D.C. with offices in London, England and Shanghai, China. As of March 31, 2024, EJF manages approximately $5.9 billion* across a diverse group of alternative asset strategies. The firm was founded in 2005 by Manny Friedman and Neal Wilson. To learn more, please visit http://ejfcap.com and please read additional Risks and Limitations located here.

*Firm AUM includes $3.0 billion in CDO assets through affiliates and $165.3 million of uncalled capital.

About KDX

KDX focuses on investing in promising startups with disruptive technologies that have the potential to transform the financial services industry.

About Tradeweb

Tradeweb Markets Inc. (Nasdaq: TW) is a leading, global operator of electronic marketplaces for rates, credit, equities and money markets. Founded in 1996, Tradeweb provides access to markets, data and analytics, electronic trading, straight-through-processing and reporting for more than 50 products to clients in the institutional, wholesale and retail markets. Advanced technologies developed by Tradeweb enhance price discovery, order execution and trade workflows while allowing for greater scale and helping to reduce risks in client trading operations. Tradeweb serves more than 2,500 clients in more than 70 countries. On average, Tradeweb facilitated more than $1.5 trillion in notional value traded per day over the past four quarters. For more information, please go to www.tradeweb.com.

Alphaledger Disclosures

The information provided herein is not directed at any investor or category of investors and is provided solely as general information about our products and services and to otherwise provide general education. It is not intended as an offer or solicitation for the purchase or sale of any financial instrument or as an official confirmation of any transaction. Furthermore, no information contained herein should be regarded as a suggestion to engage in or refrain from any investment-related course of action as none of Alphaledger nor any of its affiliates is undertaking to provide investment advice, act as an adviser, or give advice in a fiduciary capacity with respect to the materials presented herein. If you are an investor, contact your financial advisor or other fiduciary unrelated to Alphaledger about whether any given investment idea, strategy, product or service described herein may be appropriate for your circumstances.

Securities transactions will be conducted through Alphaledger Markets, Inc, “ALM” a broker dealer, registered with SEC, FINRA, the MSRB and SIPC, and wholly owned by Alphaledger Technologies, Inc. “Alphaledger”. Check the background of ALM on FINRA’s BrokerCheck.

Alphaledger is a technology company focused on providing technology to its subsidiaries and prospective clients. It does not lend itself to the solicitation of securities activities, as it can only be done by prospectus and via a registered broker dealer such as ALM.

Transfer agent services in the U.S. are provided by Alphaledger TA, LLC. Alphaledger TA, LLC is registered with the SEC as a Registered Transfer Agent.

Contacts

media@alphaledger.com

Read the press release on Business Wire

 

Alphaledger Secures Series A Funding Led by EJF Ventures Read More »

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