Ethena Labs and Securitize have unveiled plans for Converge, a blockchain designed to serve as a settlement layer for institutional DeFi and tokenized assets. The project, set for a Q2 2025 launch, aims to bridge the gap between traditional finance and decentralized finance (DeFi), offering a regulatory-friendly infrastructure for institutional capital to enter the space.
With Ethena migrating $6 billion in DeFi assets to Converge and Securitize, committing to issuing tokenized assets on the new blockchain, this collaboration could reshape how institutions interact with blockchain technology.
According to the official announcement, Converge will function as a settlement hub for institutions looking to integrate DeFi into their financial strategies. The blockchain will be powered by Ethena’s USDe and Buidl’s USDtb stablecoins, emphasizing its focus on secure, high-liquidity financial transactions.
“We’re developing Converge to fill a clear gap in the market as the go-to settlement layer for institutional-grade DeFi and tokenized assets,” said Ethena founder Guy Young.
By supporting tokenized assets and stablecoins, Converge aims to provide a reliable infrastructure where institutions can execute DeFi transactions with greater regulatory clarity.
Ethereum Compatibility for Seamless Integration
One of Converge’s most significant features is its compatibility with the Ethereum Virtual Machine (EVM). This means:
- Ethereum-based decentralized applications (DApps) and smart contracts can run on Converge without modification.
- Interoperability with major DeFi protocols, allowing seamless transactions between Ethereum and Converge.
This approach ensures that existing DeFi players can integrate into the network without major changes, accelerating institutional adoption.
Strong Industry Support
Several leading DeFi protocols and custodians have already declared support for Converge, signaling strong industry confidence in the initiative.
Protocols Building on Converge:
- Horizon by Aave
- Ethereal
- MorphoLabs
- Pendle
- Maple Finance
Institutional Custodial Support:
- Anchorage
- Komainu
- Zodia
- Fireblocks
- Copper
Converge will integrate Wormhole and LayerZero to ensure cross-chain interoperability, allowing assets to flow between Converge and other blockchain ecosystems.
The Institutional Push for DeFi
Institutional demand for DeFi solutions has surged in recent months, with traditional financial firms actively exploring blockchain-based credit and asset management.
Recent moves in the space include:
- Bitwise’s partnership with Maple Finance to provide institutional access to on-chain credit markets.
- Growing interest in tokenized real-world assets (RWAs) as a way to modernize traditional finance using blockchain technology.
However, regulatory uncertainty has slowed adoption. Securitize CEO Carlos Domingo believes Converge will help overcome these barriers by providing a purpose-built blockchain that aligns with regulatory expectations.
“With Converge, we’re solving this problem by creating a purpose-built blockchain designed to seamlessly bridge traditional finance with the opportunity of DeFi,” Domingo stated.
By offering institutional-grade compliance and security features, Converge aims to lower the entry barriers that have kept many financial institutions hesitant about fully embracing blockchain technology.
Final Thoughts
The launch of Converge represents a significant step toward integrating DeFi with traditional finance, providing institutions with a secure, scalable, and regulatory-friendly blockchain settlement layer.
With strong industry backing, Ethereum compatibility, and a focus on tokenized assets, Converge is positioning itself as a key player in the next wave of institutional blockchain adoption.
The question is: Will regulatory clarity catch up in time for institutions to fully embrace DeFi, or will barriers still slow widespread adoption?
