LatAm Bank Littio Ditches Ethereum for Avalanche as Demand for RWA Vaults Grows

As an analyst with extensive experience in the crypto and financial sectors, I find Littio’s move to Avalanche for their Yield Pots products quite intriguing. Having worked in Latin America myself, I can attest to the potential this region holds for digital assets and innovative financial solutions.

It’s getting easier for Latin Americans to gain exposure to U.S. Treasury bills.

The Colombian fintech company, Littio, is moving its operations from the Ethereum blockchain network to Avalanche for its financial products known as “Yield Pots,” which enable users to gain returns on their U.S. dollar savings.

Due to increasing interest in Yield Pots, our operations need to expand to meet this growing demand. Avalanche’s affordable transaction fees and dependable performance are among the key factors that led us to choose their blockchain.

The Avalanche Foundation launched a $50 million program last year to incentivize the development of real-world assets (RWAs) on its network and this news is a nice win for the platform.

Demand for U.S. Treasury bills

Through its collaboration with OpenTrade, a London-based company specializing in the creation of income-generating products via stablecoins and real-world assets such as U.S. Treasury bills, Littio provides access to Yield Pots.

Stablecoins are cryptocurrencies designed to stay at par with a government-issued currency, typically the U.S. dollar. Real-world assets is a term for assets that exist outside of the crypto ecosystem such as real estate, but are represented on-chain in the form of digital tokens.

At present, Littio is the sole Latin American neobank utilizing our vaults, but there are additional clients scheduled to go live this year, providing various USDC-centric fintech solutions, as stated by Jeff Handler, the chief commercial officer at OpenTrade, to CoinDesk.

Handler noted that the main groups expressing interest are neobanks, exchange platforms, and payment service providers, many of which are currently leveraging USDC to meet the increased demand for USD banking, transactions, and services throughout Latin America.

The company can be found operating in multiple Latin American nations such as Colombia, Argentina, El Salvador, Brazil, and Mexico.

In just a few short months since their debut in February, Littio’s Yield Pots have accumulated an impressive transaction volume of over $80 million. Moreover, these pots have returned approximately $250,000 to users within the last four months. According to Handler, Littio consistently invests between $11 million and $13 million each month in OpenTrade vaults.

Comparatively, since its launch in 2021, Franklin Templeton’s tokenized money market fund (similar to ours) that provides exposure to U.S. Treasuries, has garnered a total of $435 million in assets from registered users.

The yield from Littio’s vaults vary between 2% and 5%, according to the company’s website.

It’s logical that the product would generate interest: Over the last 10 years, the Colombian peso has dropped by over 54% compared to the U.S. dollar and has fallen by 88% since 1990. This trend isn’t unique to Colombia as other Latin American currencies are also struggling with high inflation rates. As a result, the U.S. dollar appears more appealing. Furthermore, depending on their location, Littio customers may encounter currency limitations or difficulties opening bank accounts through their country’s conventional financial systems – offering them another incentive to join Littio.

As a crypto investor, I can attest that platforms like Littio and OpenTrade showcase the potential of Avalanche’s technology in bridging the gap for underbanked populations. They offer intriguing products and services that are often inaccessible or costly through conventional financial routes, as stated by Morgan Krupetsky, the head of institutions and capital markets at Ava Labs, who oversees the development of the Avalanche blockchain.