Layer One: How Tassat and Lynq Are Rebuilding Financial Infrastructure

Welcome to Layer One: the newsletter and podcast on the intersection of crypto and the real world. Hosted by Kelvin Sparks and John Wu, President of Ava Labs, Layer One brings you inside the conversations driving blockchain forward.

This week on the podcast we were joined by Andre Frank, COO of Tassat, and Jerald David, CEO of Lynq, to discuss the growing institutional demand for real-time settlement, data privacy and compliant, risk-managed infrastructure solutions.

In this week’s newsletter, we’re taking a look at how Lynq was born in the wake of a major market crisis, and how it plans to expand the network’s real-world use cases far beyond the crypto industry.

Lynq launches its own L1 blockchain, bringing institutional settlement to the AVAX ecosystem

This week, institutional-grade, real-time settlement network Lynq completed its migration to a custom Avalanche L1 blockchain.

Launched in July 2025 — a collaborative effort by Tassat, Arca Labs and tZERO — the network offers a regulated venue for institutions to instantly process transfers, manage collateral and earn yield. Over $2.5 trillion of volume has already moved through Tassat’s onchain payments and settlement solutions to date.

On the podcast this week, executives from both Tassat and Lynq explained how the latter was born out of necessity, in the aftermath of one of the most significant crypto market crises of recent years.

Tassat’s first run at building a 24/7 institutional settlement layer was Signet: a network launched in 2019 in partnership with the crypto-friendly Signature Bank. This was a breakthrough proof-of-concept moment, showcasing how blockchain tech could virtually eliminate the fees and lengthy settlement times endemic to TradFi. It became the industry standard for blockchain-based banking settlement.

But by March 2023, a crisis was brewing for regional banks across America. San Francisco’s Silicon Valley Bank was hit the hardest, forced by rising interest rates to sell off assets at a loss. Panic spread among depositors, triggering a bank run that led to SVB's closure days later — the third-largest banking collapse in US history, at a value of $209 billion.

Contagion threatened to spread among other banks exposed to the tech and crypto industries. And so, New York regulators ended up seizing control of Signature Bank itself — a move that some industry figures, including board member Barney Frank, described as a deliberate attack: an attempt to tarnish, or even 'debank', an entire industry.

The collapse of Signature Bank took the Signet payment network along with it, cutting off a crucial fiat ramp and payments utility: “It was infrastructure that was needed and the moment it went away, the industry felt it,” Frank told the Layer One team.

Two years later, the Lynq network was rolled out to fill this void.

Launched in 2025, with US Bank as its banking partner and robust regulatory credentials, the network quickly developed into a new hub for crypto-industry institutional payments. Major firms like Crypto.com, Wintermute and FinchTrade were among its earliest adopters.

David describes Lynq as an “enhanced version of Signet." And one of the most significant enhancements is its proprietary Yield-in-Transit system. This utilizes a tokenized treasuries fund, managed by investment services firm Arca. Network participants can hold and transfer shares in the fund, receiving real-time yield for the duration that these are in their possession.

Now, the team is looking to expand the network's lineup of tokenized assets, while at the same time broadening its use cases across trade finance, corporate treasury management and beyond. Lynq’s migration to a custom Avalanche L1 chain is the latest step in this evolution.

Podcast Recap: How Tassat and Lynq Are Rebuilding Financial Infrastructure

In the Headlines: The stories driving the conversation this week

• Western Union is set to launch its own dollar-backed stablecoin in May. The cross-border payments giant informed investors its Solana-based USDPT coin is almost ready for launch. The stablecoin will at first only be used for settlement with Western Union’s network of partners. However, the firm eventually plans to issue a consumer-facing card allowing holders to spend stablecoins globally.
• Visa’s global stablecoin settlement pilot has expanded to nine supported blockchains. The pilot scheme — which recently hit a $7 billion annualized run rate — has seen Visa support stablecoin-backed cards around the world, as well as US bank settlement in stablecoins. Analysts at William Blair commended the company’s commitment to blockchain and AI-related commerce, predicting its stock will outperform expectations.
• The Avalanche Foundation is offering up to $50,000 for original research on the network’s economics. Academics and independent researchers are invited to share their proposals for research projects on native token and validator economics. Successful applicants will receive research grants paid out in three disbursements over a 12-month period.

Top of the Charts: Institutional adoption making progress, with some use cases standing out above others

Keep up with the latest in tokenization, DeFi, and institutional adoption by subscribing to Layer One's weekly market insights.

Layer One is brought to you in collaboration with Avalanche.