Institutional Grade DeFi & RWAs
Institutional Grade refers to Traditional Finance and Institutional Asset Management responsible for trillions in pension fund A/L matching, retirement accounts, corporate treasuries, and more
Market Opportunity:
The institutional DeFi market on Bitcoin is poised for significant growth.
Torram’s entry into this space is timely, as it meets the increasing demand for secure, compliant, and efficient financial blockchain solutions.
The timing is ripe as the tools necessary are being built in this build on bitcoin (bob) movement, including Arch Network, Stacks, Rootstock, Rune Protocol, and more, allowing for the bitcoin blockchain ecosystem to further natively develop.
DeFi Growth on Bitcoin: As Bitcoin’s ecosystem expands, so does the potential for DeFi applications requiring robust data handling and security features, data indexing, and abstraction.
Institutional Adoption: Designed to meet institutional needs with high reliability and compliance standards. Torram will become vital infrastructure to power institutional DeFi on bitcoin blockchain natively.
Those currently building without a background or experience in institutional asset management are building without considering power data players like Bloomberg, MarketAxes, Factset, and others.
Our solution recognizes these sources as institutional grade standards, given these are the backbone of pricing feed providers and highly trusted entities in institutional trading and asset management.
We aim to work in partnership with these groups for the possible development of Airnodes as 1st party oracles or decentralized API developments to bring their vast pricing feeds on-chain, and calculate things like TWAP, VWAP, SMAs, EMAs, all on chain if permissable, feasible, and scalable (otherwise off-chain computation will be critical).
Money Markets
Blockchain-based money markets are crucial financial infrastructure that connect lenders, who wish to earn yield on their assets, with borrowers, who wish to gain access to working capital. They allow users to increase the utility of their crypto holdings and participate in both the supply side and the demand side. However, to ensure the solvency of the platform, price feeds are required to track the valuation of assets used on the platform as a means of ensuring loans are issued at fair market prices and liquidations automatically occur on undercollateralized loans.
Stablecoins
While centralized stablecoins are backed by fiat in an off-chain bank account, decentralized stablecoins are commonly overcollateralized by on-chain cryptocurrencies and require price data to maintain full collateralization (e.g. a user’s collateral is worth over 150% the value of their loan). There are a range if open opportunities to build Bitcoin based stablecoins.
Futures Markets
Futures are financial instruments that “obligate” traders to buy or sell an asset at a predetermined price at a specified time in the future. Commonly used for hedging and leveraged exposure, futures require users to collateralize their long or short position. Price feeds are used to determine whether or not liquidations should occur, ensuring each position is fully collateralized at all times.
Complex Derivative Markets
Options are a type of financial derivative that grant traders the “option” to buy or sell a certain amount of a particular asset by a future date if they so choose. In the off-chain world, centralized entities most frequently underwrite the contracts, but on the blockchain, decentralized peer-to-peer options are possible. With the most secure settelement layer being bitcoin,
Bond Markets
Bonds are a financial agreement that enables the raising of short-term capital by issuing debt to be paid back at a later date. Oracles provide the data required for settlement such as interest rates, debt scores, fiat payments, and more.
Synthetic Assets
Synthetic assets are a category of financial instruments that provide traders price exposure to specific assets, such as indices or commodities, without requiring ownership of the physical asset itself. Bitcoin based defi platforms can allow traders to create advanced non-custodial trading strategies and gain exposure to traditional assets that do not exist on the blockchain.
Alternative & Illiquid Assets
Top Illiquid and Alternative Assets where tokenization on the most secure blockchain, bitcoin, could be used an institutional grade settlement layer, with our price oracles and indexer natively on bitcoin. You could bring liquidity to illiquid assets with tokenization in the form of Runes and Ordinals.
Private Equity:
Description: Investments in private companies not listed on public exchanges. These can include venture capital and buyouts.
Illiquidity: High, as it typically involves long-term commitments and exit strategies like IPOs or acquisitions.
Real Estate:
Description: Investment properties, commercial real estate, residential properties, and land.
Illiquidity: Moderate to high, depending on the market and property type.
Hedge Funds:
Description: Pooled investment funds that employ various strategies to earn active returns for their investors.
Illiquidity: High, with lock-up periods and limited redemption opportunities.
Venture Capital:
Description: Investment in early-stage startups with high growth potential.
Illiquidity: Very high, often requiring a long investment horizon before seeing returns. Tokenization could provide liquidity easily for secondary markets.
Collectibles:
Description: Items like art, antiques, rare coins, stamps, and vintage cars.
Illiquidity: High, with value depending on rarity, demand, and market conditions.
Infrastructure:
Description: Investments in physical assets like bridges, roads, and utilities.
Illiquidity: High, as these assets are typically long-term and require significant capital.
Timberland:
Description: Investment in forested land for the purpose of timber production.
Illiquidity: High, as timber investments often have long growth cycles and limited market liquidity.
Farmland:
Description: Agricultural land investments for crop production or livestock grazing.
Illiquidity: High, due to the nature of agricultural cycles and market demand.
Private Debt:
Description: Non-publicly traded debt securities, including direct lending to companies.
Illiquidity: High, as these debt instruments are not easily traded.
Commodities:
Description: Physical assets like gold, silver, oil, and agricultural products.
Illiquidity: Varies, but some commodities like physical gold can be relatively illiquid compared to financial assets.
Wine:
Description: Investment in rare and fine wines.
Illiquidity: High, with value dependent on vintage, rarity, and market demand.
Music Royalties:
Description: Investments in the rights to earn income from music tracks.
Illiquidity: High, as the market for buying and selling royalties is limited.
Mineral Rights:
Description: Ownership interests in the minerals beneath a piece of land.
Illiquidity: High, due to the long-term nature and market demand for mineral extraction.
Insurance-linked Securities:
Description: Financial instruments whose value is tied to insurance loss events, like catastrophe bonds.
Illiquidity: High, with limited secondary markets.
Interest rate-linked Securities:
Description: Financial instruments whose value is tied to government and corporate interest rates globally allowing for complex lending markets and OTC trading.
Illiquidity: High, customizable, large in value,
Peer-to-Peer Lending:
Description: Direct lending to individuals or businesses through online platforms.
Illiquidity: Moderate to high, depending on the structure of the lending agreements.
Art:
Description: Investment in visual art pieces such as paintings, sculptures, and photographs.
Illiquidity: High, as selling high-value art can take time and depend on market interest.
Intellectual Property:
Description: Ownership of patents, trademarks, copyrights, and trade secrets.
Illiquidity: High, as the value is tied to the commercial success and legal protection of the intellectual property.
Diamonds and Gemstones:
Description: Investment in precious stones like diamonds, rubies, and sapphires.
Illiquidity: High, with value dependent on quality, rarity, and market demand.
As a generalized framework for building decentralized oracle networks, dAPIs, and indexer/query systems, Torram provides developers the tools they need to connect their bitcoin native smart contract applications, under developed by Arch Network , and soon possibly by Torram Foundation, or other L2 mechanisms to any real-world data or events required for their use case.
While the use cases listed above are not an exhaustive list, as there is an infinite number of smart contract use cases made possible by Torram, we believe they provide a starting point for developers who are interested in building new innovative decentralized applications.
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