Avalanche tokenized Treasuries gain yield-bearing collateral use

Lynq and ZeroBeta have integrated their respective institutional settlement and risk management platforms to enable the use of tokenized U.S. Treasuries as collateral on the Avalanche blockchain. This collaboration allows institutional clients to pledge tokenized assets for borrowing and trading margin while simultaneously continuing to earn interest on the underlying holdings. The system utilizes a collateral lock function that keeps assets on the Lynq settlement network, with ZeroBeta’s BlueShift platform managing real-time risk calculations and margin requirements. By automating the pledge and release process based on threshold-based risk triggers, the integration aims to solve the capital efficiency problem where institutions previously had to choose between liquidity and yield. Lynq, which operates via SEC-registered broker-dealer tZERO Securities, currently reports over $89 million in platform assets and onboarding of more than 40 institutional firms. This development highlights the growing trend of utilizing blockchain-based settlement layers to optimize collateral management for traditional financial instruments. The ability to maintain interest accrual during the collateralization process represents a significant step toward making tokenized assets more competitive with traditional financial products.