Dinari, a US-based provider of tokenized public securities, is planning to launch its own blockchain, joining the latest wave of companies and building its own infrastructure.
The chain, known as the Dinari Financial Network, aims to serve as a coordination and settlement layer for securities issued on other networks such as Arbitrum.
“This will be the fundamental infrastructure of the settlement and clearing systems that occurred primarily off-chain,” Gabe Otte, CEO and co-founder of Dinali, said in an interview.
The testnet is currently being released with plans to make it public in the coming weeks, Otte added.
Dinari is one of the leading companies in tokenizing stocks, a red-hot trend to make stocks and trading available on Blockchain Rail. Proponents say tokenization could potentially reduce costs by 24-hour trading, faster settlements.
Recently, digital trading platform Robinhood introduced stock tokens to Ethereum Layer-2 Arbitrum
For EU users with future plans for Crypto Exchange, including Kraken, to build their own chain, Bybit has begun offering US stocks and ETF tokens.
In June, Dinari received approval to tokenize National Market System (NMS) securities, obtained broker-dealer registration by FINRA, and provided a compliant solution for issuing token versions of US public stocks. Gemini, a exchange founded by Cameron and Tyler Winclevos, launched stock tokens in the EU, with Dinari providing tokenization infrastructure for the backend.
Why another L1?
Dinari’s decision to build a chain of its own follows a recent pattern seen in fintechs and crypto companies. USDC Stablecoin Issuer Circle and Payments Company Stripe revealed this week to pursue its own blockchain. Rival tokenization companies such as Ondo Finance and Securitize (team up with Ethena) are also working on their own networks.
With this approach, they aim to further strengthen regulatory compliance, uptime and integration with traditional financial systems compared to existing public blockchain deployments.
For Dinari, having a chain of its own was “inevitably,” Ott said.
“Many public chains don’t actually allow the appropriate level of compliance needed to address securities,” he explained. Another important reason was to promote and coordinate the transaction of dinari-issued tokens across multiple blockchains without fragmenting liquidity.
“If some of the (stock tokens) live in Solana, some of them live in arbitrum, some of them at base, you’re getting this $100 trillion market and fragmenting it,” he said. “How do you prevent that? Use a chain built with the purpose of being able to essentially draw fluidity into all these different chains.”
By unifying settlements and liquidity, the company aims to bring US stocks to continuous and compliant transactions in the global market, and to acquire similar roles in stock market deposit trusts and Clearing Corporation (DTCC). DTCC is the world’s largest securities clearing and payment system.
To choose an avalanche, Otte emphasized the need for flexibility and the ability to control transaction fees (gasoline prices). This is difficult with rollup and layer 2 solutions. AvaChain Labs said at Ava Cloud, Avalanche’s blockchain service, Ava Cloud allows businesses to spin up and customize their blockchain to suit their needs.
Neutral Clearing House
Dinali wants to make the Dinali financial network a “neutral clearing house” for the industry, Ott said.
Initially, governance comes from a consortium of institutions such as Gemini, Custodian Bitgo and Asset Manager Vanek.
The plan is to completely decentralize the chain in the future, Ott said. This could potentially launch the chain’s own governance token, he added.
Read more: Tokenized Stocks Need an ADR Structure to Protect Investors
