Best Fund Tokenization Platforms

The asset management industry is getting closer and closer to the digital asset space. Both from a regulatory understanding and form the rise of fund tokenization platforms, which use blockchain technology to simplify and streamline various fund administration tasks. 

What does "tokenized fund" mean?

Honestly, it's a very broad term, but generally involving two elements: a collective investment scheme and blockchain. The actual use of the technology depends on what component the platform is optimizing. From the overall administration to the distribution. In this article, we will compare several leading platforms to help you understand their key features, target markets, and how they differentiate from one another.

TL;DR: 

Fume

Fume is designed to simplify and automate many of the key fund administration functions, including the transfer agent, NAV calculation, fee calculation, and fee extraction. It allows fund managers to handle subscriptions, redemptions, and other administrative tasks directly on-chain. Fume operates on public blockchains like Arbitrum and Ethereum, offering flexibility in supporting subscriptions in stablecoins or fiat. One of its key advantages is the ability to work with a wide range of underlying assets, including cryptocurrencies, real estate, equities, and stocks​​.
By removing intermediaries such as banks and brokers, Fume significantly reduces operational costs and the risks associated with human error​​. Its regulatory focus is also strong, ensuring compliance with top jurisdictions like Switzerland and Luxembourg, making it a secure and transparent platform for both fund managers and investors​.

FundsDLT

FundsDLT focuses specifically on improving fund distribution through blockchain technology. Acquired by Deutsche Boerse, FundsDLT automates parts of the distribution process, such as investor onboarding and transaction settlement. However, it does not offer broader fund administration functionalities.
While its platform helps traditional asset managers and distributors streamline distribution, FundsDLT relies on traditional custodians and intermediaries, unlike fully decentralized solutions. It is best suited for European fund managers who need efficient distribution rather than a complete on-chain administration​.

Tokeny

Tokeny is a leading platform for tokenizing securities, including fund units. It allows fund managers to create digital representations of fund shares on the blockchain, offering greater liquidity and transferability of fund units. However, while Tokeny handles the tokenization of the fund itself, it does not solve the deeper inefficiencies and complexities of the traditional fund administration system. Fund managers still face challenges related to the regulatory status of tokenized shares, especially regarding compliance in multiple jurisdictions​.
Tokeny excels for fund managers or companies looking for a way to tokenize their assets but does not offer on-chain fund management capabilities.

Enzyme

Enzyme is a decentralized protocol that streamlines the fund administration process, offering automated NAV calculations 24/7. Investors can manage assets in a non-custodial way, which eliminates the need to trust a manager with custody of the assets​. This makes Enzyme a highly attractive solution for crypto-native fund managers who prefer a decentralized model.
Enzyme’s main limitation lies in its support for investable assets. Due to its reliance on oracles to fetch prices, the platform supports a relatively narrow set of digital assets confined to specific blockchains. Moreover, all investor activities must occur on-chain, making it less flexible for fund managers looking to incorporate traditional assets​.
For those exploring relatively simple DeFi strategies, Enzyme provides an excellent infrastructure, but it may not be the best option for more complex investment portfolios.

Securitize

Securitize operates as a blockchain-based transfer agent and specializes in issuing tokenized securities, such as stocks, bonds, and real estate. However, unlike platforms like Fume or Enzyme, Securitize does not offer fund administration services​. Its main value lies in ensuring regulatory compliance during the process of issuing and trading digital securities, making it particularly suitable for companies looking to raise capital through tokenized assets.
Securitize’s strength lies in tokenization and compliance. Mainly for fund managers seeking a fund tokenization solution with interests in secondary trading.

Conclusion

Each platform in this comparison offers unique features and caters to different market needs:

• Fume stands out by offering a fully automated, decentralized fund administration system with flexibility in supporting both digital and traditional assets. It simplifies fund administration by removing intermediaries and lowering operational costs.
• FundsDLT focuses narrowly on fund distribution but lacks full administrative automation.
• Tokeny is a strong contender for tokenizing fund units but does not fully address the administrative complexities of managing those funds.
• Enzyme provides a fully decentralized fund administration protocol but is limited in its asset support, making it suitable for funds focused solely on crypto strategies.
• Securitize excels in regulatory compliance and token issuance but lacks broader fund management functionalities.

For fund managers seeking a comprehensive, blockchain-based solution that automates key administrative functions while supporting a wide range of assets, Fume offers a highly compelling option.