J.P. Morgan & Apollo Deliver ‘Project Guardian’ With Help from Axelar & Others

Next-generation proof-of-concept uses cross-chain infrastructure to advance the $5.5T portfolio management industry

November 15, 2023
Galen Moore
November 15, 2023

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Axelar has collaborated with Onyx by J.P. Morgan and Apollo on a successful experiment showing how smart contracts could be used to manage client portfolios at scale. In the proof-of-concept, blockchain technology was used to execute trades and enable automated portfolio management of tokenized financial assets (aka real-world assets, or RWAs).

The proof-of-concept solution demonstrated a method for managers to compose portfolios using tokenized funds on the blockchain of their choosing, purchasing and rebalancing positions in tokenized assets across multiple, interconnected blockchains.

Axelar delivers interoperable cross-chain infrastructure connecting 50+ blockchains – and now is an emerging leader connecting the worlds of centralized finance and decentralized finance. Since mainnet in 2022, Axelar has transferred over +$6 billion in value cross-chain via a secure, programmable network. The AXL token supports decentralized, permissionless security and programmability across a dynamic set of 75 validators.

In one of the most innovative components of the proof-of-concept, a portfolio manager changed investment models by replacing one Apollo Private Equity Fund with another, using a Rebalancing Module to automatically rebalance a large number of portfolios that followed the strategy, including order placement and settlement activity. This unique-to-blockchain aspect adds market-wide composability and automation efficiency while dramatically reducing human error.

The proof-of-concept collaboration, part of ‘Project Guardian’ by the Monetary Authority of Singapore, is aimed at helping standardize processes to settle transactions on interoperable blockchains.

"We showed that using smart contracts, tokenized assets and programmatically linked models, rebalancing portfolios can happen automatically and quickly - regardless of whether those portfolios include traditional assets, alternative assets, or use multiple ledgers," said Tyrone Lobban, head of Onyx Digital Assets, in a tweet. "There is much talk today about how tokenizing “real world” assets across chains is creating fragmentation of liquidity and experiences. So we set out to explore how using interoperability solutions across EVM and non-EVM chains could solve for this."

J.P. Morgan’s Onyx leveraged Axelar cross-chain technology to enable interoperability with a private and permissioned blockchain provided by Provenance Blockchain Zone. Oasis Pro supported the tokenization of assets, including Apollo funds. Provenance has $9 billion in real-world financial asset value locked on-chain.

“Leveraging Axelar, Onyx by J.P. Morgan was able to introduce composability and programmability into portfolio management," said Sergey Gorbunov, CEO of Axelar Inc., "by automating modular rebalancing across a large number of portfolios. This is a powerful example of what's possible with blockchain interoperability."

The POC was described fully in a report published this week at the Singapore FinTech Festival – and the supporting roles of Axelar, Oasis Pro and Provenance were announced in a Business Wire press release, which was covered by CoinDesk and other leading blockchain-focused media outlets.

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