Lynq Lets Tokenized Treasuries Earn Interest as Collateral via ZeroBeta

Lynq, the Avalanche-based institutional settlement network, and risk-technology firm ZeroBeta announced a partnership on Oct. 27 that lets institutions pledge Lynq holdings as collateral for secured borrowing and margin trading while the asset keeps earning interest, according to Lynq's press release. The Avalanche Foundation's accounts amplified it the same day.

How the integration splits the work

The release says the partnership centers on Lynq's "newly released collateral lock functionality," which lets clients escrow funds as collateral while the underlying asset continues to accrue interest. ZeroBeta's risk and collateral platform, BlueShift, "recently certified connectivity" to Lynq, per the same release.

The release describes the roles this way: BlueShift "acts as the risk layer, setting terms and monitoring margin across the lifecycle," while Lynq "acts as the neutral rail, holding the collateral and executing pledges and releases on BlueShift's instruction." It adds that "Lynq keeps collateral on the same rail from pledge through release," and describes Avalanche as the blockchain platform powering Lynq's settlement network.

Two workflows run on the same threshold logic, according to the release:

• Secured borrowing and lending: BlueShift instructs Lynq to pledge the tokenized Treasury asset in favor of the lender, and to top up or release as collateral value moves through the agreed threshold.
• Margin for digital-asset trading: BlueShift calculates margin for open positions and new orders with the tokenized Treasury asset accepted as margin, and instructs Lynq to pledge or release against the same logic.

The release frames the problem as one of idle assets: pledging a tokenized holding against a loan or trade usually means it stops working for its owner while locked. Lynq CEO Jerald David said in the release that "eligible assets can remain on Lynq's settlement network while backing a loan or trading position." ZeroBeta CEO Varuna Wijesundera said the partnership "brings institutional-grade risk and collateral management directly onto a settlement network where assets earn interest."

Avalanche's framing

Lynq posted the integration on X at 14:59 UTC on Oct. 27, saying institutions can pledge tokenized funds for secured borrowing and trading margin while the asset continues to accrue interest. Five minutes later, Avalanche's main X account wrote: "On Avalanche, Tokenized U.S. Treasuries can now back institutional loans and trading positions while continuing to earn interest," adding that institutions can manage collateral and settle transactions "directly on Lynq's Avalanche L1, without moving assets off the network."

At 18:06 UTC the Avalanche Foundation's X account quote-posted it, calling it "the introduction of tokenized real-world assets as live collateral" and saying that "income that originates in traditional markets and flows to assets held on Avalanche is part of what our Gross Chain Income (GCI) framework sets out to measure."

The Foundation defined GCI in an Aug. 12 post. It starts from Gross Chain Product, the value added by on-chain activity, and adds "holder yield": income earned outside the on-chain economy that accrues directly to Avalanche-resident holders of tokenized funds and yield-bearing stablecoins. The Foundation put holder yield at $2.7M for June 2026, lifting nominal GCI to $5.8M for the month, and at $32.3M over the full measured history. Its tweet does not say whether or how Lynq collateral would be counted in that figure.

What the announcement does not say

The release does not name the tokenized Treasury asset eligible for pledging, a lender, any initial clients, or an amount pledged. It gives no date for when clients could first use the collateral lock beyond calling it "newly released."

For scale, the release says assets on Lynq "have surpassed $89 million," with more than 40 institutional digital asset firms onboarded, and describes the platform as operated by tZERO Securities, LLC, an SEC-registered broker-dealer, and developed by Arca Labs, Tassat Group and tZERO Group. Lynq separately said on Sept. 28 that it had added Goldman Sachs's Financial Square Treasury Instruments Fund (FTIXX), which that post describes as an institutional-grade traditional product, through a distribution partnership with Goldman Sachs Asset Management and tZERO Securities. The post names the Arca Institutional US Treasury Fund as the Treasury fund already available on the platform and cites collateral efficiency as a use case. The Oct. 27 release names neither fund as the pledgeable asset. Earlier Descout coverage looked at the Goldman fund listing and Avalanche's wider run of institutional announcements.