Manage tokenized funds across blockchain networks
Sector: Tertiary sector · Industry: Asset management · Organisation: Deutsche Bank, Memento Blockchain, Interop Labs · Maturity level: Pilot
Deutsche Bank, Memento Blockchain, and Interop Labs deployed an interoperable infrastructure to manage tokenized funds across blockchain networks within the DAMA 2 project. The initiative expanded upon a previous feasibility study, delivering a permissioned public testnet architecture followed by a mainnet rollout in May 2025. This institutional framework streamlines the issuance, distribution, and servicing of digital fund shares while strictly preserving regulatory compliance.
Documentation status
- Project status: Pilot (as of 01 May 2025) — In May 2025, the system was deployed as an institutional pilot on the Mainnet.
- Evidence: Evidence medium
- Editorial review: pending
Description
Deutsche Bank, Memento Blockchain, and Interop Labs demonstrated an institutional procedure in the DAMA 2 project that enables tokenised funds to be managed across heterogeneous blockchain networks. Traditional fund structures are often tied to separate custody systems, which slows down and increases the cost of cross-border or cross-platform investments. By using interoperable Smart Contracts and zero-knowledge technology, secure, automated management is enabled while simultaneously meeting existing regulatory requirements of institutional financial markets.
The project built on the findings of the original feasibility study Project DAMA and developed a practical architecture for asset management. At its core is the Memento ZKchain, a permissioned Layer-2 infrastructure based on Ethereum that combines scalability with institutional data privacy. Interop Labs contributed essential components to securely transfer transactions and information flows between different network environments. After deploying a fully functional testnet architecture, the Mainnet deployment took place in May 2025, as documented in the official litepaper. The initiative demonstrates how the issuance, servicing, and transfer of tokenised fund shares can be technically standardised and operated compliantly, even though a full commercial mass operation is not yet active.
Perspectives
B2B — organisations perspective
For fund initiators, custodian banks, and institutional investors, the approach offers a modular bridge between legacy systems and multiple blockchain platforms. Transaction cycles and counterparty risks can be reduced while maintaining data privacy and regulatory obligations.
Employees perspective
Employees in fund administration benefit from automated reconciliation processes and standardised data formats. Instead of repetitive data matching, their work shifts to monitoring cross-network Smart Contract operations.
Benefits
General
- More efficient transaction processing through interoperable Smart Contracts
- Compliance with strict regulatory and data protection requirements using zero-knowledge proofs
- Reduced fragmentation of assets across different blockchain ecosystems
B2B — organisations
- Reduced reconciliation and administrative effort between custodians and fund managers
- Standardised interfaces for cross-network issuance of digital fund shares
Employees
- Relief from error-prone manual inventory reconciliations
- Focus on technology-supported control and compliance activities
Challenges
General
- High technical complexity in securing cross-network protocols
- Need for regulatory harmonisation across different jurisdictions
B2B — organisations
- Required integration into heterogeneous IT and core banking systems of the involved partners
- Different legal requirements for the custody of digital assets
Employees
- Requirement for specialised expertise in Layer-2 architectures and Smart Contract security
Technology foundation
The architecture is based on the Memento ZKchain, an Ethereum Layer-2 structure with zero-knowledge technology, combined with interoperability protocols for cross-chain transactions. This approach enables compliance with strict data protection requirements and regulatory obligations while ensuring efficient scaling.
Implementation examples
Project DAMA 2 – Cross-network fund servicing
The fragmentation of digital assets on isolated blockchains and manual processing in traditional fund servicing cause high costs and liquidity barriers.
Deutsche Bank developed a testnet and mainnet architecture for cross-network processing of tokenised funds together with Memento Blockchain and Interop Labs.
Building on the proof-of-concept Project DAMA, the project partners created DAMA 2, a public but permissioned Layer-2 architecture based on the Memento ZKchain. According to the official litepaper, the system was deployed on the mainnet in May 2025 to map core processes of fund issuance and management. The project demonstrates the feasibility of regulated digital fund structures incorporating cryptographic data protection methods.
Combination of institutional regulatory compliance, protection of confidential transaction data, and technical interoperability across network boundaries.
Tags
Tokenisation, Asset Management, Interoperability, Layer 2, Smart Contracts