Bermudian-based investment professional Lawrence Newhook has been tabbed as a director of a new tokenised fund set up by a New York-based global venture capital firm in partnership with the Swiss staking provider Luganodes.

Arcanum Capital, which is focused on early and growth-stage investments in the Web3 sector, announced the arrival of its second fund, the Arcanum Luganodes Fund.

While Arcanum’s Fund I was primarily focused on seed-stage investments in decentralised applications, Fund II will have a key focus on investing in and adding value to promising and upcoming Layer 1 and Layer 2 blockchain networks, which provide the technical and economic infrastructure for decentralised applications to run on.

Mr Newhook, who has a 30-year-plus track record investing globally across all asset classes, will serve as a director of both Arcanum Emerging Technologies Fund I and Fund II, in addition to his main role as president of DigitalArray ISAC Ltd, a Bermudian-domiciled platform of regulated investment funds that facilitates the launch of institutional funds for best-in-class investment managers.

Arcanum will employ the digital securitisation solution offered by DigitalArray’s sister company, Laureate Digital Markets, to tokenise Fund II, providing investors the ability to easily sell their fund interests prior to the end of the fund’s term on a regulated secondary platform or peer-to-peer (subject to any required restrictions on transfer).

Mr Newhook said: “Being able to frictionlessly trade illiquid real-world assets, such as investment funds, is a game-changer for investors.

“Most of the few funds that have tokenised so far have issued tokens that are merely representative of something, like a share of an SPV [special-purpose vehicle]/feeder.

“What we are providing for our closed-ended funds is the issuance of securities natively on-chain. Rather than a token that represents economic interests, the actual fund LP [limited partner] interests themselves are on-chain, allowing for instant settlement of funds.

“All the restrictions on transfer [eg, regulatory, AML/ATF, investor whitelisting, contractual, etc] can be built into the smart contract and, when all conditions are satisfied, the transfer happens with no off-chain settlement.

“For a closed-end fund like Arcanum’s Fund II, an investor can buy today and sell tomorrow, either peer-to-peer or on the secondary market. It gives LPs the potential for liquidity where it otherwise would not have been available to them.”

Luganodes is a Swiss-operated, institutional-grade, non-custodial staking provider born out of the Lugano Plan B Programme, an initiative driven by Tether, the blockchain-enabled platform designed to facilitate the use of fiat currencies in a digital manner, and the city of Lugano.

The companies said Luganodes is the world's fastest-growing staking provider with more than $1 billion of staked assets under management across 30-plus networks.