It's been an interesting last day to say the least and I've seen a lot of back and forth about what the tokenisation of Blackrock funds actually means - does this mean that Blackrock is using Hedera? This post is my interpretation while trying to take as balanced of a view as I can.The CEO and co-owner of Archax tweeted a thread that many of us on the subreddit may have read already which I think paints a picture of the relationship:Archax is in the business of being a digital securities exchange, custodian and brokerage.They have clients who want to buy various digital securities, including tokenised funds.To cater to their clients Archax then invests in said funds.4.While maintaining legal ownership of their investment into these funds, they represent these holdings as tokens in a blockchain/DLT. It is also part of their process (but not mandatory!) to inform the investment manager they are doing this.They sell these tokens to their client while recording ownership of those tokens using a blockchain/DLT (this is what they refer to as beneficial ownership tokens or BoTs)With these BoTs they can offer easier access to functionality than if they were just regular securities such as using them as collateral (my understanding is you can already do this but tokenisation make this process easier).So how does Hedera fit into this? How does Blackrock?Essentially Hedera is one of the blockchain/DLTs that Archax can use to tokenised said funds. In this case where Archax's clients wanted access to tokenised versions of Blackrock's funds, Archax decided to tokenise these funds using Hedera.Blackrock's role in this is minimal - Archax let Blackrock (the investment manager) know that they were going to do this and they didn't say no.As put by the CEO/owner of Archax in his tweets:"If we decide to tokenise, arguably we do not need to approach the investment manager, but we always do as we want long term relationships. The investment manager’s level of involvement can vary but both abrdn and Blackrock were aware that we were tokenising on Hedera. Neither objected, hopefully due to our integrity and regulatory permissions."My interpretation of this is that realistically they can tokenise whatever they want without asking for permission of said fund. The fund would probably see them buying their fund anyway and hazard a guess that they'll be tokenising it, but as long as what they are doing is legal and not a bad look for them they can't or won't do anything about it. However as a matter of good business practice Archax opts to involve the fund/investment manager likely just as some kind of reassurance that they won't cease and desist them (no legal background, not sure if that's what they would do but you get the point) and also to keep the door open and reiterate "Hey we exist!" which hopefully down the road will increase the chances of a closer business relationship as essentially right now the fund just sees Archax as another client. Blackrock didn't object, this could be for a variety of reasons - note the tweet says "Neither objected, hopefully due to our integrity and regulatory permissions."He himself is just speculating why they didn't say no, and he wants to think it's a reflection of Archax's sound business model. Nobody (except Blackrock themselves) knows - maybe they love what Archax is doing and are secretly rooting for them, maybe (and I think more likely) they don't see what Archax is doing as illegal or dangerous (which I guess is a somewhat of a positive reflection on the business model) so they're not going to intervene.So in summary my interpretation is, well, Blackrock isn't directly involved they just were okay with it happening. This announcement is being conflated as Blackrock literally making a conscious choice to use Hedera which is not really an accurate representation. It's not entirely wrong as you can use Hedera to buy Blackrock funds through Archax, but it's not some kind of direct relationship (remember these are just tokenised representations of Archax's investment where they retain ownership of the underlying fund). The positives to take away from this whole situation is that Archax, who are the ones making the decision, who seem to really care about being regulatory compliant and becoming a big player in the RWA tokenisation space, obviously think it's a good idea to continue use Hedera. Note that previously with tokenisation of abrdn's fund they used Ethereum and Hedera. But as far as we know they only opted for Hedera this time which I think can be interpreted cautiously as optimistic, and reflects well on Hedera being a better choice than Ethereum for this usecase. (https://ift.tt/w0VGoD6 the same time funds like Blackrock and abrdn don't think Archax's use of Hedera is a terrible idea, which I guess is good (i.e. it's okay).Other points to keep in mind:-Archax's tokenisation of abrdn's fund has not translated to any noticeable TPS increase, likely this will be the same with Blackrock (I don't have a source for this but I haven't heard anything to the contrary)- Blackrock is actually interested in RWA tokenisation, but keep in mind they literally chose to use Ethereum to tokenise their own fund. Now you can say that that was fraught with issues due to how Ethereum works and maybe they'll now consider Hedera instead as it's been put on their radar by Archax, but that's also extremely speculative (fingers crossed hey). Keep in mind this is a closer relationship then this Archax/Hedera one.- Larry Fink's Twitter account retweeted a post about the Archax tokenisation of Blackrock assets on Hedera. Maybe this means they are considering it, maybe it's just a PR move, maybe it's just relevant to his and Blackrock's views on RWA so he retweeted it. - On a similar note the HBAR Foundation said they had to wait for Blackrock to sign off on the release, my interpretation of this is they reached out to whoever their contact is at Blackrock to say "We're going to publish this article which you're mentioned in are you okay with it?" and whoever is responsible for that at Blackrock said "Doesn't misrepresent us or paint us in a bad light, go ahead." I personally don't think it means they all communicated as equal business partners to make this announcement.- Realistically I think the price action is a sell the news kind of event (easy to say now) as the masses misinterpreted how involved Blackrock was as well. I personally think it's a bit silly that we're all hyping this up, but also hey gotta pump your bags - I know mine are heavy.Not trying to FUD or anything, just my take as a random guy with no financial or legal background trying not to let hype and greed take over my perception of reality, feel free to tell me why I'm wrong! via /r/Hedera https://ift.tt/edaOv6p
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