R3 chooses Solana to deliver institutional returns on-chain

R3’s Strategic Shift Toward Onchain Asset Movement

After spending over ten years developing infrastructure for exchanges, financial institutions, and central banks, R3 recognized a significant shift in the market landscape. Roughly a year ago, the company embarked on a strategic transformation, posing a crucial question: how can clients seamlessly transition assets entirely onto blockchain networks?

Evaluating the Blockchain Ecosystem

Todd MacDonald, one of R3’s founders, explained that this transition involved a comprehensive assessment of the blockchain sector. “We engaged with nearly every major layer 1 and layer 2 network,” he told CoinDesk, as R3 sought to determine where institutional capital markets would likely migrate. This research led to a major partnership with the Solana Foundation, announced last May at Solana’s Accelerate conference.

Understanding Layer 1 and Layer 2 Networks

Layer 1 refers to the foundational blockchain infrastructure, while layer 2 solutions are additional systems or blockchains built atop these base layers to enhance scalability and functionality.

Solana: The Future of Onchain Markets

According to MacDonald, R3’s decision was rooted in a belief that all financial markets will eventually operate onchain. He highlighted Solana’s architecture, speed, and trading-centric design as key reasons for choosing it, likening Solana to “the Nasdaq of blockchains”—a platform engineered for high-performance capital markets rather than general experimentation.

R3’s Corda Platform and Industry Partnerships

Through its Corda blockchain, R3 manages over $10 billion in assets and collaborates with major players such as HSBC, Bank of America, the Bank of Italy, the Monetary Authority of Singapore, the Swiss National Bank, Euroclear, SDX, and SBI.

The Rise of Tokenization

Tokenization—the conversion of tangible assets like stocks and bonds into digital tokens tradable on blockchain networks—has become a primary area of interest and investment for traditional financial institutions.

DeFi Growth and Solana’s Rapid Expansion

Most decentralized finance (DeFi) activity remains concentrated on a few blockchains, with Ethereum leading in total value locked (TVL) due to its deep liquidity and robust developer community. However, Solana has quickly risen as a top DeFi platform, offering high throughput, minimal fees, and increasing user participation.

Recent figures indicate that Solana’s DeFi ecosystem now holds over $9 billion in TVL, positioning it among the leading networks outside of Ethereum and its layer 2s, and at times matching the combined activity of major Ethereum L2s.

Solana’s approach has resulted in greater onchain transaction volumes and more active wallets, particularly in trading and high-frequency use cases, even as Ethereum maintains the largest share of institutional assets and overall TVL.

R3’s Focus on Tokenizing the Next Trillion in Assets

Since its strategic pivot last May, R3 has dedicated the past eight to nine months to a singular challenge: how to bring the next trillion dollars’ worth of assets onchain in a way that genuinely benefits investors. This involves not only issuing tokens but also creating products that appeal to both current onchain participants and traditional investors over time.

Shifting Priorities on Solana

MacDonald noted a noticeable transition on Solana, with increasing attention on capital formation and allocation rather than speculative trading.

Addressing the Liquidity Challenge

He identified liquidity as the primary obstacle for tokenized real-world assets. “The core of DeFi is lending and borrowing,” MacDonald stated. The breakthrough will occur when tokenized real-world assets are accepted as reliable collateral, on par with native crypto assets. Currently, limited liquidity and strict permissions deter DeFi investors from fully engaging with these products.

Meeting Existing Onchain Demand

Instead of manufacturing demand, R3 is focusing on areas where onchain interest already exists. MacDonald observed that many sophisticated investors are seeking more stable, less crypto-correlated yields, especially after experiencing market cycles.

“Our aim is to bring these assets onchain and structure them in a way that fits DeFi,” he said, emphasizing collaboration with current allocators to enhance access.

Targeting High-Yield Products and Private Credit

R3’s asset strategy centers on higher-yield offerings, with private credit as a foundational element. “Headline yields are essential to capture attention,” MacDonald remarked, noting that returns near 10% are particularly attractive to onchain investors. However, balancing yield, liquidity, and composability remains challenging, especially since private credit liquidity is typically infrequent in traditional markets.

Opportunities in Trade Finance

Beyond private credit, R3 sees vast potential in trade finance, a sector characterized by flexible supply and demand. MacDonald highlighted that if DeFi allocators embrace trade finance, the traditional market’s scale could provide substantial, sustainable returns.

Trade finance is known for its complexity, involving fragmented jurisdictions, customized contracts, and inconsistent data standards, making risk assessment, asset standardization, and liquidity scaling difficult despite the market’s size.

Redesigning Assets for Onchain Markets

On the issuer side, R3 is collaborating with well-known investment managers and a diverse range of asset owners, from manufacturers to shipping companies, who view tokenization as a new way to distribute assets and raise capital. The goal is to reimagine these products so they are investable, tradable, and composable within onchain environments.

Expanding Onchain Risk Capital

Enhancing liquidity will also require more risk capital to be deployed directly onchain. While there are significant DeFi-native participants today, the pool remains limited. “We need a broader range of balance sheets willing to allocate capital,” MacDonald said, along with more adaptable redemption options for investors.

Introducing the Corda Protocol on Solana

This vision is embodied in R3’s recently launched Corda Protocol. Built directly on Solana, the protocol offers professionally managed, real-world-asset-backed yield vaults that issue liquid, redeemable tokens. Set to launch in the first half of 2026, these vaults will provide stablecoin holders with access to tokenized debt, funds, and reinsurance-linked securities, while maintaining DeFi’s hallmark liquidity and composability.

“Assets available through Corda will benefit from a protocol-native liquidity layer, enabling instant swaps for assets that are otherwise illiquid,” MacDonald explained. This feature allows these assets to be widely used as collateral. The protocol will integrate with leading curators and lending platforms to support borrowing and leveraged positions.

Early interest has been strong, with over 30,000 pre-registrations for Corda so far.

Bridging the Yield Gap for DeFi

MacDonald described this initiative as a direct response to a growing market need. As DeFi investors seek more stable and diversified returns unlinked to crypto market volatility, demand for institutional-grade yield onchain is rising. Despite the tokenization of hundreds of billions in real-world assets, most high-quality yield opportunities still require capital to exit the blockchain.

“Our mission is to bridge that divide,” MacDonald concluded. “We want to deliver Wall Street-caliber assets to DeFi in a way that finally works for onchain markets, and to attract off chain capital into the blockchain ecosystem at scale.”