The DeFi partnership aims to tokenize shares of pre-IPO companies


Decentralized Finance (DeFi) Protocol Portal has partnered with asset marketplace HighCircleX (HCX) to tokenize shares of pre-IPO companies, according to an announcement shared with Cointelegraph on Monday.

The collaboration aims to facilitate private equity investments by building on the Bitcoin (BTC) blockchain. With this, HighCircleX wants to solve problems such as a lack of liquidity and value uncertainty in traditional assets.

Per the announcement, HCX will incorporate and operate a limited liability company (LLC) to manage the investments. While the investors will not own the LLC’s shares, they will own tokens representing the LLC’s “ownership”. Such tokens can be traded on the HCX marketplace.

In addition, the funds raised by the LLC will be used to purchase a pre-IPO investment. Pre-IPO companies that can be tokenized and traded include SpaceX, Epic Games, Klarna, Automation Anywhere, and Cross River Bank.

Portal Executive Chairman Chandra Duggirala stated that the partnership aims to bring more value to BTC. He said this:

“Portal brings real-world use cases to Bitcoin. Eventually, we will see many more financial assets tokenized on the Bitcoin blockchain.”

Additionally, Duggirala stated that while the assets are different from BTC, simplifying the interface for traditional assets marks the “beginning of the Bitcoin ecosystem merging with mainstream finance.”

Related: Texas-based bitcoin mining operator is filing for a $60 million IPO

Last year, crypto platform Coinbase became the first company in the United States to go public. However, based on market trends, owning BTC is currently 20 percent better than owning Coinbase stock (COIN).

Meanwhile, crypto block explorer and exchange is exploring how the company may go public in 2022. If the company succeeds in conducting an IPO, the company will become the second exchange in the United States after Coinbase to do so.