Compound Labs founders developing regulated financial products for the blockchain

Superstate’s first product will be an on-chain government bond that you can hold in your crypto wallet


BigTunaOnline/Shutterstock modified by Blockworks


Superstate, a company built by the founders of Compound Labs, has just secured $4 million in equity funding to bring regulated financial products to blockchain networks.

Investors participating in the round include ParaFi Capital, 1kx, Cumberland Ventures, Coinfund and Distributed Global.

One of the first products that Superstate plans to bring is a short-term government bond fund that can be held in a cryptocurrency wallet or by a crypto custodian.

Superstate filed a draft prospectus with the US Securities and Exchange Commission for the product on Monday. 

The fund will enable shareholders to record that they own a government bond fund on the Ethereum blockchain. 

“We are creating a new fund that has its own prospectus, which then shares of that fund can be held in blockchain wallets,” Robert Leshner, the founder of Compound Labs, told Blockworks.

Holding bond funds on a crypto wallet will primarily benefit crypto-native hedge funds and venture funds, he said.

“If you’re set up to trade crypto assets, you’re probably not set up with traditional brokerage accounts,” Leshner said. 

With yields in DeFi now often lower than in traditional finance markets, holding government bonds in your crypto wallet enables you to use all existing systems that these investors already have in place.

“This is an opportunity to hold a TradFi fund in your crypto custody process,” he said. “So you as a firm can hold a record of your ownership of this mutual fund alongside stablecoins or other crypto assets in the same place in the same platform.”

Government bond funds in crypto wallets will only be available to US customers and not available to any offshore investors, Lensher notes. 

Although Superstate will not be the first company to bring institutional-grade products onto the blockchain, Jake Brukhman, the founder and CEO of CoinFund, told Blockworks blockchain technology will have to converge with traditional technologies and regulators and governments to “sensibly come to market.”

“The founder, the strategy and the approach are just world-class, so we’re just very excited about it,” Brukhman said.

Don’t miss the next big story – join our free daily newsletter.


Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

MON - WED, MARCH 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience:  Attend expert-led panel discussions and fireside chats  Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts   Grow your network […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Frax report cover.jpg


Frax saw continued development in its frxETH liquid staking derivative and Fraxlend money market throughout 2023. Frax V3 introduces an RWA strategy to drive utility to the protocol's cornerstone product, the FRAX stablecoin.


MicroStrategy discloses the purchase of 16,000 bitcoin throughout November


Digital asset firms face potential new regulatory landscape under Treasury’s proposed authority expansion


Uniswap Labs will be providing trading APIs to Talos investors through Fireblocks


DYDX supply will climb by up to 80% after the Friday unlock, but a couple factors make a massive sell-off appear unlikely


Switzerland-based Pando Asset, which has crypto products trading on the SIX Swiss Exchange, now looks to the US


Binance does not hold the required licenses to advertise and serve customers in the Philippines, the country’s securities regulator said