Currently available in the testnet, Spruce is live for several financial institutions to explore its implementation possibilities and the benefits they can avail of. Per the announcement blog post published by Avalanche, select institutions have already come on board. This includes the likes of Wellington Management, WisdomTree, and Cumberland, among many others.
The testnet of Spruce would essentially check the benefits of executing trades on-chain, followed by exploring the settlement process. To reiterate, the usage will be on the testnet for applications and assets.
Spruce Testnet comes with the functionality to lower risk along with the barrier to entry for players. It mostly applies to institutions that buy and sell assets and want to engage with public blockchain infrastructure. What makes this interesting is the application of valueless tokens not to put any capital at risk.
The utility of Spruce to the institutional partners currently appears to be on the side of interest rate swaps and foreign exchange, or FX. Avalanche plans on activating other areas, followed by the positive output generated during research and development.
Talking a bit more about the future of the Spruce testnet, there is a possibility that Avalanche will onboard third-party applications, processes, and assets.
Institutions participating are additionally tasked with sharing their experience and feedback with the Avalanche team. This will lay the groundwork for future Spruce developments. Feedback could be related to the mechanism’s capabilities, integration, and architecture. Confirming this aspect, it has to be noted that feedback can relate to any aspect based on how participating financial institutions leverage the Avalanche Evergreen Subnet. This will help the team ensure the mainnet implementation is scalable and successful when launched.
Representatives of the participating financial institutions have issued a statement, mostly calling this a valuable opportunity. Blue Macellari from T. Rowe Price Associates said this would help them better understand and analyze smart contract technology. The Head of Digital Assets Strategy at the said firm has added that it will also help them check the potential applications of public and permissioned blockchains in the financial market.
Will Peck, the Head of Digital Assets at WisdomTree, has echoed a similar tone, saying that tokenization and blockchain are believed to play a very important role in financial services. Will has added that they are now looking forward to experimenting in the testing environment.
Mark Garabedian, the Director of Digital Assets & Tokenization at Willington Management, has expressed that they will experiment with Spruce to determine if it best fits institutional workflows while lowering the costs to add value for clients.
John Wu, the president of Ava Labs, has called their collaboration with financial institutions groundbreaking, adding that Avalanche Evergreen Subnets is a meaningful step in exploring the possibilities of digital finance. The ultimate goal of Avalanche Labs is to boost the institutional adoption of Spruce.
