Deutsche Bank Singapore and Memento Blockchain have successfully completed the proof-of-concept phase of the DAMA (Digital Asset Management Access) project, which aims to facilitate the management of digital funds investing in tokenized securities, according to a Feb. 21 report. According to the report, the asset manager was able to create a digital asset fund with its own soulbound token and launch a direct fiat-to-digital on-ramp for users. Institutional investors can then subscribe to the fund by directly minting tokens through decentralized exchange aggregators or the built-in marketplace.
As a first step, Deutsche Bank and Memento Blockchain created a decentralized finance (DeFi) platform and a unique, non-transferable soul-bound token (SBT) on Ethereum. Using SBT, platform developers can then verify the identity of wallet owners and grant them access to investment opportunities without having to ask them for personal information each time. Meanwhile, trust anchors keep know-your-customer (KYC) checks and accompanying documents off-chain. SBT can also be used to restrict access to services or products that do not match a potential user's risk tolerance or experience.
To invest in the fund, institutional investors holding SBT will provide collateral in order to mint and receive tokenized shares of the chosen underlying digital investment fund. The tokenized shares can then be exchanged for digital assets, such as stablecoins, through the built-in digital marketplace. As for asset managers, they can use a window on the Ethereum testnet to create tokenized funds involving various strategies such as DeFi staking.
For asset security, Deutsche Bank and Memento Blockchain use MetaMask for the DAMA project. MetaMask is built into the platform as a digital wallet of choice for partners to facilitate the transfer of digital assets. Institutional investors will need to hold SBT in their MetaMask wallets and KYC in order to access the platform’s decentralized applications. As for next steps, Deutsche Bank said it was exploring the use of Project DAMA in Singapore, where there are currently 1,100 registered fund managers with $3.36 trillion in assets under management.
