Intain backed by JAM FINTOP, Blizzard Avalanche Fund for Blockchain Securitization – Ledger Insights
Blockchain startup Intain announced a round of funding from Blizzard, a venture fund supporting the Avalanche public blockchain, and JAM FINTOP Blockchain, a fund linked to community banks.
Intain started by focusing on servicing conventional securitization of loans and in 2020 entered into a partnership with the fourth largest trustee in the asset-backed securities sector, WSFS Institutional Services. Almost $ 5 billion in assets are currently managed on the Intain ADMIN platform. It is now also planning to launch a tokenization service.
Solve a pain point
The blockchain solution solves a major pain point in operating these securities, which must be managed for between seven and 15 years. Despite the fact that it has been almost 15 years since the great financial crisis, there is no major centralized service for monitoring and reporting on how each loan in a pool performs. This means that the participants in securitization do not want to rely on a centralized unit.
As a result, reporting is usually at least six weeks in arrears and the service is costly in terms of human resources.
On top of this, most securitizations have many different classes of investors divided according to risk appetite, which makes reporting more complex.
Apart from the different types of investors, there are several participants, such as the lender, the lender of the loan, the trustee, the issuer and the rating agency. It is the classic need for a single ‘source of truth’.
The Intain ADMIN solution automates most of the service process. Therefore, instead of having a minimum securitization transaction size of $ 100 million, it is now viable to have a transaction one-tenth the size.
“The fact that some of the intermediaries in the industry are willing to share up to 50% of their fees with us means that at least 70-80% of the transaction must be automated,” said Siddhartha, founder and CEO of Intain during a Hyperledger presentation .
The Intain ADMIN solution is based on Hyperledger Fabric. But it has been cloned on Avalanche to launch a tokenization service, Intain MARKETS for asset backed securities (ABS).
“We are not creating a new asset class or offering a 15% APY risk-free return,” said Siddhartha, in a nod to the claims of some now bankrupt crypto borrowers. “We are building a transparent and efficient version of the existing financial system.”
Avalanche was chosen because of its DeFi focus and subnet architecture (subnet) that supports permitted areas that restrict access to financial institutions.
“Each subnet can be tailored to the exact needs of the application, including customizable gas charges, finance, validation kits, KYC requirements and more,” said Lydia Chiu, VP of Business Development at Ava Labs, on behalf of the Blizzard Fund.
Meanwhile, Intain is not the only one focusing on securitization. Figure Technologies has issued securities with securities using its Provenance blockchain with Intain client WSFS as trustee. Last week, Redwood Trusts CoreVest announced a $ 313 million loan securitization with loan payments tracked using blockchain technology from Liquid Mortgage. And Symbiont has developed an asset-backed securities platform developed with Vanguard.
