Will Tokenized Stocks Actually Work? | Ian De Bode

Ian De Bode is the Chief Strategy Officer at Ondo Finance. In this conversation we talk about why we need tokenization, advantage of being on-chain, stablecoins vs cash, how people will make money, regulation, biggest risks, and should equities be trading 24/7?===================== Independent Investor ConferenceMarkets are at all-time highs. Public equities are outperforming. And individual investors are driving it all. It’s officially the rise of the retail investor. On September 12th in NYC, I’m hosting the Independent Investor Summit — a one-day event built exclusively for self-directed investors. We’re bringing together some of the smartest public market investors I know for a full day of macro insights, market predictions, one-on-one fireside chats, and actionable investment ideas from each investor. This is going to be an absolute banger event. Join us if you like markets and think retail is two steps ahead of Wall Street.👉 TICKETS: ⁠⁠https://www.independentinvestor.co/⁠⁠ (use promo code POMPYT25)======================From The Desk of Anthony PomplianoCheck out my NEW show for daily bite-sized breakdowns of the biggest stories in finance, technology, and politics: ⁠⁠http://pompdesk.com/⁠⁠======================Core is the leading Bitcoin scaling solution, enabling you to lock in yield by locking up your Bitcoin. Simply lock it on the Bitcoin blockchain to secure the Core network, and get rewards. No bridging. No lending. Just holding. Still your keys. Still your coins. Now your yield. Start at https://stake.coredao.org/pomp======================Xapo Bank, the world’s first fully licensed Bitcoin-enabled bank, offers military-grade security with an unmatched blend of physical and digital security, as well as pioneering regulatory oversight, so your funds are always protected. Beyond secure storage, they enable you to grow and use your Bitcoin. Earn daily interest in Bitcoin, spend with zero FX fees using a global card, and make instant payments via the Lightning Network for unrivalled access and convenience. Visit https://www.xapobank.com/pomp to join.======================Simple Mining makes Bitcoin mining simple and accessible for everyone. We offer a premium white glove hosting service, helping you maximize the profitability of Bitcoin mining. For more information on Simple Mining or to get started mining Bitcoin, visit https://www.simplemining.io/======================TimeStamps:0:00 - Intro1:56 - Why do we need tokenization?12:34 - How people will make money 15:52 - Lessons from tokenizing a government bond fund 19:13 - Stablecoins that generate yield 24:28 - Behind the scenes of belief in tokenization26:15 - What's the biggest risk?27:59 - Do people really want to trade stocks on weekends? 29:05 - What Ondo Finance is building

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• 1:00Speaker 03

  Why the heck do we need tokenization? Doesn't the stock market work perfectly well? What is the purpose of doing this?

• 1:06Speaker 04

  So putting something on Chang just enables programmability 24/7 movement of the thing. It becomes a better version of the asset than it can be in traditional rails.

• 1:15Speaker 03

  If 10 years from now, tokenization doesn't happen, what's the most likely reason it didn't happen?

• 1:20Speaker 04

  No, but if it doesn't, I think the key thing that the space wasn't able to figure out is...

• 1:29Speaker 03

  What's going on guys? Today we got a great episode with Ian DeBoe. He's the Chief Strategy Officer at Ondo Finance. Now, one of the biggest questions I keep getting is what is tokenization? Is it real? Does the tech work? Are people actually going to do this? And guess what? I don't know yet. It's interesting. Maybe it works, maybe it doesn't. So what I did is I went and I found someone who's actually building the technology and they've got views. They've got some stuff that's already on the track record and they're building a lot of new things. So we get into it with Ian talking all about what is going on with tokenization and I play devil's advocate. I want the cold, hard truth. Tell me, is this going to work or not? Here's my conversation with Ian DeBoe. All right, Ian, here's what I want to do today in our conversation. I'm going to play devil's advocate. A lot of people who like tokenization, don't like tokenization. Some people think it's going to be valuable.

• 2:12Speaker 03

  Some people think it's absolute nonsense and hyperware, all that stuff. What I want to do is I want to ask you all the questions I hear people that are constantly debating this, starting off with, "Why the heck do we need tokenization? Doesn't the stock market work perfectly well?" What is the purpose of doing this?

• 2:29Speaker 04

  I love it. Appreciate you asking the question because it's the number one question I get. We believe tokenization is helpful for two things. Number one is enabling global access to an asset that people want, but historically have struggled to get access to. The second reason is tokenization enables you to put something on chain. Why do people want their asset on chain? Because they can also use it in DeFi primarily as collateral. So putting something on chain just enables programmability 24/7 movement of the thing. It becomes a better version of the asset than it can be in traditional rails.

• 3:02Speaker 03

  All right, let's go back to, let's go back to global access first. That's nonsense. Come on. Everyone's got access to the US stock market, doesn't it? Like, who does? All right, explain.

• 3:12Speaker 04

  Right. So people in the US kind of look at it and be like, why? I mean, I can open up my brokerage account. No problem whatsoever. I want to come back to that because I think even for US investors, tokenized stocks are a much better mousetrap. But I don't think people in the US appreciate just how bad the system is the moment you leave the US. Access to a brokerage account really is not easy whatsoever. Globally, there's a bunch of, you know, minimum asset balances that they require. The fees that they charge, even if you qualify for a brokerage account, the fees that you get charged even to go from local currency to dollars, from dollars into the stocks, you're literally looking at 5 to 10% just making the investment, right?

• 3:59Speaker 04

  So I think people don't really appreciate how difficult it is to get access to US capital markets. It's very similar to what a stablecoin did for access to the US dollar, quite frankly. Like, we've seen that stablecoins clearly have product market fit. Why? Because they enable global access to the US dollar and they facilitate, you know, the liquidity into digital asset economy. But the global access to the US dollar is a big deal because a lot of people don't want to get stuck with their local currency and would much rather hold their assets in the US dollar. Same thing. A lot of people do not want to invest in their local stock market. The capital controls are real. The investor disclosures are very different.

• 4:41Speaker 04

  When you look at the returns on US capital markets, they are far exceeding most other, almost any other capital market out there. So giving access to US capital markets to a global audience is a, we believe, real driver of global wealth creation in the future.

• 4:59Speaker 03

  All right. Now let's go to this on-chain idea. I'm in the United States. I got access to the stock market. So global access is nice for the people who don't have access, but I got access. So my value proposition would be this on-chain component. What exactly does this mean? Like, give me a specific example of what could I do with a tokenized stock that maybe I can't do otherwise?

• 5:18Speaker 04

  Yeah. Most people in the US have multiple brokerage accounts, right? I have the player of having multiple brokerage accounts, so I can compare them. Even in the US, your brokerage account differs, right? In one brokerage account, I've got 24/5 trading, the other one I don't. The margin I can get in one brokerage account, I can actually take off the platform, and the other one, I can't. You can just use it to invest more. And in fact, I've got two brokerage accounts, so all the time my assets are split in two, because depending on the fees, I may select one versus the other. And then my crypto assets are in another different account, right? So now I have three different investment accounts. So even in the US, the landscape is very fragmented.

• 6:01Speaker 04

  Brokerage looks different depending on the account that you have. But once you tokenize these things in a similar form like you can do with stablecoins, all of a sudden, you can transfer them between your various platforms. If I want to take out a margin loan, I can actually shop around in the various DeFi ecosystems, depending on what I want. I can do that 24/7, God forbid, like normal Trifly rails. They're often, you know, during normal market hours, if you're lucky, 24/5. So there's, even in the US context.

• 6:32Speaker 04

  Tokenizing your stocks really opens up the landscape of what a brokerage account can be, what you can do with it. It's kind of also again, similar to what a stablecoin did for a bank account. I'd say most people in the US, at least the crypto natives and on-chain natives appreciate that a stablecoin is much better than the cash you can have in your bank account for a wide variety of reasons. But even with a, you know, with a bank account, at least I could transfer my cash very easily from one bank account to the next. In a brokerage account with stocks, you can, but it's pretty, pretty difficult. So the, the leap that we can take by tokenizing stocks, even for US investors to just enable interoperability between brokerage accounts, you're being able to shop around margin, it's pretty meaningful.

• 7:18Speaker 03

  All right. So let's say that all that is true, which I think generally people are starting to kind of wake up to because they see stablecoins. They see, you know, kind of the promise of this technology. But talking of technology, okay, none of the technology works. Everyone wants to do this. There's this big promise, but I hear tons of people saying the tech doesn't work. How do you think through maybe what's working? What is being worked on? Where it's going to be and where we are today?

• 7:40Speaker 04

  Yeah. I mean, particularly for tokenized stocks, it's been an interesting narrative for the past couple of months. You had some big announcements from Robinhood, Coinbase is getting involved, Kraken launched their X stocks product. So it's clearly that people are waking up to the fact that tokenized stocks could be interesting. But when you look at the adoption today, it's not super meaningful. And I think in part it's because, to your point, the tech right now, or the way that people have done this, doesn't really work. A lot of these tokenized stocks are de-pegging left and right. When you buy a tokenized stock, you just want to buy the stock at the normal price as is available in a brokerage account. You don't want to have to worry about, you know, you buying Tesla and it being 10% de-pegged.

• 8:24Speaker 04

  It's kind of like buying a stablecoin. When you buy a stablecoin, you want to make sure that you can buy it at $1. And even more importantly, you want to be able to redeem it at $1 anytime you want, right? That is the most important thing.

• 8:35Speaker 03

  Explain that real quick. When you say that a stock is being de-pegged, let's say that Tesla is trading at $420, which seems to be a price a lot of people like with Tesla. What is de-pegging? Does it mean that it's trading at 450, 400 or explain how that works? Today's episode is brought to you by Zappo Bank, where eligible members can unlock the power of Bitcoin without selling it. Need cash fast? With Zappo Bank's Bitcoin-backed loans, you can access 40% of your Bitcoin's value, borrowing as much as $1 million for a full year with low interest rates, zero fees, and no early repayment fees either. Now, here's the best part. You keep your Bitcoin, meaning you get to watch your holdings grow as the price of Bitcoin increases. Whether you're looking to buy a house, fund your child's education, or seize an exciting investment opportunity,

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• 10:10Speaker 04

  That's right. So when you tokenize stocks and you want to buy stocks on-chain, the most important thing is when you go to your Robinhood account and you see Tesla trading at 420. When you buy it on-chain, you want to be able to buy it at 420. But in some of these implementations, instead of being at 420, it may be sometimes it's at 400, which would be great for you, but sometimes it's at 450, which is less great for you. And even if you then want to easily swap these back into stablecoins, that liquidity may not really be there. And the reason that this is happening is because there's a disconnect between the trading and the trap buy on the NASDAQ and New York Stock Exchange and the like, where all of the liquidity for these assets is. The 420 price really is set

• 10:54Speaker 04

  on these centralized exchanges like NASDAQ and the like, because that's where the trading happens. But then you've got these on-chain assets that in some models out there rely on different liquidity pools, like think of DEX pools that people have deposited these things in that people can trade in and out of. There's no connection between the two. And so as a result, the price that happens on chain that is available in these Dex pools and the like can drift up. If there's no connection to easily arbit down, that's when you get the de-pegging. It's kind of the same thing that we saw with stable coins. You need 24/5, 24/7 ideally minting and burning, like connectivity between the Trappi rails and the on-chain rails to make sure that these prices stay in equilibrium.

• 11:36Speaker 03

  Okay. And so how do you think people will solve that problem? Like, that seems like a theoretical, easy thing to solve, but obviously technically it's probably hard to implement. So how do you do it?

• 11:46Speaker 04

  Yeah, it's the number one challenge you have when you tokenize an asset. Because tokenization in and of itself is pretty easy. Almost anyone can tokenize an asset, but figuring out that liquidity and how you bridge that is the key thing. When we go live with our on-the-global-markets platform, this has been the number one challenge that we aim to solve. I can't disclose necessarily all of the secret sauce, but needless to say is that we have found a way to, via a wide variety of integrations, capital, all these sorts of partnerships that we have with the Trappis and the like, we have a way to instantly execute whatever happens on-chain, off-chain, and vice versa, to make sure that when a user wants to buy or sell these assets on-chain, we can immediately execute off-chain for the same amount and

• 12:31Speaker 04

  mint the asset, so that there's clear connectivity between Trappi liquidity pools and on-chain liquidity pools, and our assets will not be pegged.

• 12:41Speaker 03

  As you build the technology, where are people going to make money? Just long and short stocks like they normally would? Or do you think that there's going to be people who kind of more aggressively try to find the de-peggs and like, you know, kind of event-driven type events? Like, how do you see this market forming?

• 12:56Speaker 04

  Yeah. I love that question, because I think it's the number one thing that's not clear, at least in my mind. Like, we speak a lot about the global access piece, and I think it is very, very clear that people globally want access to US capital markets. Does that mean that they want to be conservative investors and invest in the S and P 500 or Russell 3000 and just buy and hold? Or are they going to be buying MicroStrategy leveraged and try to figure out the deep pegs or do perps on equities? I don't know. Given the on-chain crowd and their risk appetite, maybe it looks a little bit more like the Microstrategies, but a little bit TBD. I do think you hit on an important point of like how people are going to make money.

• 13:41Speaker 04

  It's going to be initially very interesting to see which use cases truly take off. There's going to be, you know, some arbitrage that happens between on-chain, off-chain. I'm sure some sophisticated actors are going to be very interested in that. Some people are going to find ways to arb margin rates between off-chain and on-chain. But I do think the number one thing that I'm interested in is what assets and what product structure really is going to take off? Is it going to be perps on MicroStrategy with 10x leverage? Or is it going to be an S and P 500 buy and hold? I don't know. But the good thing is our platform is going to make all of that possible.

• 14:17Speaker 03

  What about regulators? Like, they're not going to let you guys do this, right? That sounds like crazy that they're going to lean in and say, okay, fine, you guys can be innovative.

• 14:26Speaker 04

  Under the previous admin, I would have said, yes, you are correct. Luckily, this admin has taken a different approach. And it's clearly taken the view that the US should lead in on-chain innovation and really solidify the position of the US dollar in the on-chain economy. And that that's the main reason why we now have the stablecoin legislation, because they see this as a way to establish the dominance of the US dollar globally with new rails. And a similar argument can absolutely be made that says the tokenization of stocks, ETFs, equities, and the like is a way to establish the dominance of US capital markets globally on the same rails that stablecoins run on.

• 15:10Speaker 04

  So I think what the the US, obviously, and the SEC and the various regulators, they're very concerned with investor protections, as are we. So the way that you roll this out has to take into account investor protections in the best possible way. People, you know, these assets need to be bankruptcy remote, designed in a bankruptcy remote way. You want to make sure that people can redeem. There's a lot of things you need to take into account, but I I don't think what the US wants and what the regulators want at this point is for an ecosystem to flourish outside the US of tokenized stocks and ETFs with a lot of innovation, but no ability to do that onshore in the US. And so far, the conversations we've had with the US administration and the various regulators

• 15:54Speaker 04

  is they very much understand that and want to make sure that the US can lead.

• 15:58Speaker 03

  Now, you guys previously, before you've gone to equities, tokenized a government bond fund. I think it's called OUSG. Great name, Ondo USG. I got it. Very clever on your marketing team. What did you guys learn from that? Right? I think part of what I always find interesting is like, there's like this theoretical exercises going on. And, you know, in sports, I don't know if you ever watched the old like Jerry Maguire movie, and he's like, you know, show me the money. Here, it's like, show me the results, right? Like, what is the thing that you guys learned in doing that that now gives you the confidence to go do equities?

• 16:32Speaker 04

  Yeah, I honestly think we would not have been able to pull off equities if we hadn't started with treasuries first. We started doing it with OUSG, that one, because it was the first, OUSG was pretty innovative. It was launched in 2020, early 2023. It was the first time that a tokenized treasury fund could actually be transferred between two addresses on chain, peer to peer, 24/7. It's still a permissioned asset. You have to onboard with us to hold it. But once you held it, you could actually freely transfer it with other investors that had been onboarded with us. With the previous iterations of tokenized treasury funds, that was not possible. So people looked at that and said, oh, that's pretty interesting. In fact, when BlackRock launched their Biddle fund, they, a year

• 17:15Speaker 04

  later or so, they basically copied the OUSG structure. So we saw that as a sign of it. Flattery, obviously, if BlackRock copies you. But the reason why it was impactful is because not only could you transfer it between different people, you could also whitelist the smart contract. So then you could start doing, you know, the OUSG into USDC transfers. You could enable it as permission collateral on certain DeFi protocols. So we liked that product structure quite a bit. It showed us the limitations of how you can integrate a permissioned asset into broader DeFi. There's a few limitations on it, but it was a meaningful innovation and it taught us

• 17:57Speaker 04

  how to think about tokenizing these funds, figuring out the liquidity, the redemption liquidity in particular. Like people want to be able to invest in a tokenized treasury asset, park their cash, but then immediately be able to transfer back into stablecoins. Those stablecoins need to come from somewhere, right? So how do you figure out the liquidity mechanics to make sure that you can always do redemptions into stablecoins inside 24/7? That was the key learning for us, quite frankly, with OUSG and why we integrated into the infrastructure that Biddle deployed and a lot of the other asset managers. But it had limitations. The next iteration of our product is called USDY. That one is a little bit more like a stablecoin in that it transfers permissionlessly in secondary markets.

• 18:41Speaker 04

  So we took the learnings of OUSG. We figured out how to do the redemption liquidity and the like. But we wanted to structure USDY in a way that it had the best bankruptcy investor protections and bankruptcy remoteness. And we wanted it to be easier integrated into DeFi by making it permissionlessly in secondary markets. That product structure worked really well. It's on 10 different blockchains, 100 different DeFi protocols. Both assets have about 700 million or so in AUM, which makes us the second largest tokenized treasury provider behind BlackRock. That USDY product structure, we're now replicating to stocks and ETFs.

• 19:19Speaker 03

  Let's talk about these stable coins that bear yield, right? They basically are able to do this. I've always thought that is fascinating. Then in the United States, we all complain and whine that, oh, they're only paying me 0.3%, 0.4%. Yeah, it's like nothing in your bank account, your checking account. Savings account have a little bit higher and a high-yield savings account is, you know, groundbreaking at like 3% or whatever it is.

• 19:41Speaker 03

  A lot of people around the world don't have access to yield. That's not a concept that they're used to. And so it makes sense to me if we can export the idea of yield to kind of everyday citizens, like that could be pretty powerful. Stable coins historically have not paid it. Obviously, you know, Tether being the king of stable coins for a long time. They make a lot of money. Well, how do they make money? They're making it off of the treasuries that they're holding, right? These yield-bearing stable coins seem to be a stable coin that shares the yield with the holder of the stable coin. You correct me if I'm wrong on that. And do you think that that's going to end up being bigger than the non-yield-bearing stable coin? Today's episode is brought to you by Simple Mining. Have you ever been interested in mining Bitcoin? As a miner myself, I've been using Simple Mining for the past few months and the experience

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  Get off zero and start earning yield on even just 1% of your Bitcoin by going to stake.coredao.org/pomp. Again, that's stake.coredao.org/pomp, or go click the link in the description. These yield-bearing stablecoins seem to be a stablecoin that shares the yield with the holder of the stablecoin, you correct me if I'm wrong on that. And do you think that that's going to end up being bigger than the non-yield-bearing stablecoin?

• 23:02Speaker 04

  Yeah, I mean, the mousetrap of the yield-bearing stablecoin is pretty good because to your point, like USD Y, that's a second product that I was just mentioning, we paid 4.29% out on a daily basis to everyone who holds it. So in that sense, I would say it is a superior product to a stablecoin in the sense that it still has better investor protection and it pays out yield on a daily basis. Now, is it fully wholesale going to replace a stablecoin? You know, probably not because a stablecoin right now has very entrenched liquidity in trading pairs and the like. But it's kind of similar to what we've seen, I think, in the US with, you know, checking accounts that are very good for payments and liquidity purposes.

• 23:45Speaker 04

  Money market funds that are very good investment vehicles to park your idle cash and not necessarily make payments with, although you could. Money market funds in the US have been on an absolute tear since they were introduced, and they're increasing their share of, you know, overall checking deposits in the banking system. Regulators are quite fearful of that for good reason, but you start to see the same thing happen in traditional banking from checkings to money market funds. I think the same thing is going to play out with stable coins, where over time, you're going to see some migration from stable coins into these yield coins. Is that going to happen tomorrow? Probably not, but we do believe fundamentally that a yield coin probably is a better form of money ultimately, because it has the best investor protections that you can think

• 24:29Speaker 04

  of, and all the yield that is being generated on these treasury assets is being paid out to its users.

• 24:35Speaker 03

  You previously were running the digital assets team at McKinsey. You are friends with people who are inside all these institutions. What's behind the curtain? What's the conversation behind closed doors? Are they like, do they really believe in this stuff? Or are they just, you know, blowing smoke and people don't care? Like, give us some inside information here on what's going on inside these firms.

• 24:55Speaker 04

  Yeah, that's a great question. Do they really believe it or not? I mean, at this point, most of them have to believe it because, you know, digital assets are not slowing down. I first started my career at McKinsey doing digital asset work back in 2016, and I was talking with some French banks, and all of them were interested in blockchain, not crypto, right? Since then, obviously, a lot of them have changed their tune, although not all. You can still find the skeptics very easily, and the higher up you go in the banks, the more easy you find the skeptics.

• 25:26Speaker 03

  The older they are usually, the farther away they are from the technology. Yeah, yeah, yeah, makes sense.

• 25:30Speaker 04

  The general divide, the generational divide is real. And to be fair to some of these executives too, like 555. Close to retirement, do I really want to go big on a technology that I know nothing about? Probably not. So there's just incentive misalignment with some of these institutions to not really pursue this new thing. But I do think increasingly within TradFi, you have very smart people who understand exactly where the puck is headed. They have been waiting, but quietly developing their capabilities to move at an accelerated pace the moment regulation would allow. Regulation now allows them to move on to public blockchains in a much bigger way.

• 26:10Speaker 04

  So the amount of movement that I'm seeing right now within TradFi is unlike anything I have seen in the almost 10 years that I have looked at it, and it's not even close.

• 26:22Speaker 03

  When you think about if 10 years from now, tokenization doesn't happen, what's the most likely reason it didn't happen? What's the biggest risk or the biggest obstacle or the pothole in the road?

• 26:34Speaker 04

  The fact that, well, I should say, I don't believe that will happen, but if it does.

• 26:38Speaker 03

  Of course, of course. You're not allowed to believe it. You're building it. You can't believe that.

• 26:43Speaker 04

  My career on it, right? No, but if it doesn't, I think the key thing that the space wasn't able to figure out is just the UI UX, the holding of the assets in non-custodial accounts and the like, that just an inability to provide for a better experience ultimately than the traditional version. That is still the main issue that I, like, the vast majority of people right now who do investing in the like, they're all web two brokerage platforms, right? It's the Robin Hoods of the world, the Interactive Broker and the like.

• 27:23Speaker 04

  If we can't figure out a way to have a better mousetrap of these tokenized assets, but in a secure way, and that a user ultimately almost doesn't care that it's on a blockchain, then I think we may fail. But there's a lot of innovation happening in the space right now to kind of abstract away that layer. So I do think it's actually a lot closer than what we think. But fundamentally, I don't think a user should care at all what the underlying rails are. They should just care about what is the asset that I'm buying? Is it the real thing or as close to the real thing as possible? And what are the different things that I can do with it? When can I do them? And on all of those metrics, I think tokenization can either solve it or provide a better matchup.

• 28:05Speaker 03

  You think people really want to trade stocks at night and weekends? Like, if people talk about it, I talk about it. You think people really want to do that?

• 28:12Speaker 04

  I think it's so interesting because right now, no one does it. And so would I be in the weekend behind my laptop, trading stocks? Probably not because it's not an established behavior. But the moment it becomes possible, you know, certain global events happen over the weekend. And at this point, crypto markets react, but equities don't, which is rather absurd if you think about it, just because the rails don't support it. I don't think that divide is going to hold. And I also think increasingly, people who grew up investing in crypto, particularly outside the US, are going to expect the same asset mobility and opening of markets as they've seen in crypto.

• 28:57Speaker 04

  So I do think it is an inevitability. Will it happen tomorrow? Or will that user behavior change tomorrow? Maybe not, but there is a real appetite right now to crack 24/7 on equities via tokenization.

• 29:11Speaker 03

  And then what's like the 30 second pitch on what you guys are doing better or different than these other ones? Because I think people now, just talking with, you know, some people in Bitcoin and crypto, but a lot of people are frankly, outside the industry, they keep hearing tokenization, and now they're getting an onslaught. There's all these people who are going to do it, and they're like, what's the difference? You know, it's like all these bullets flying at them.

• 29:32Speaker 04

  Yeah, yeah, yeah. Well, I mean, when most people talk about tokenization still, they think about like real estate and private equity and a bunch of these liquid assets. We don't focus on that at all. We don't think, I mean, I hope someone cracks the use case for the tokenization of a liquid assets, but tokenization doesn't magically create liquidity once you put it on crypto rails. So I think, you know, 80% of what you see out there on tokenization, quite frankly, can be discounted, mostly because tokenization doesn't magically create liquidity. In fact, the real trick about tokenization is cracking how you take the liquidity that exists on stocks, ETFs, treasuries and cash, like with the stablecoin, and bring that on chain in such a way that your asset always stays pegged to the underlying, you can execute

• 30:14Speaker 04

  and redeem in size whenever you want, and because it now runs on crypto rails, you can make it available to a global audience. And I think particularly on all of those metrics, our solution is significantly better. Because we do issue these assets, not in a permissioned version, like what you're seeing. For example, with Robinhood, it's just a permissioned vault garden. We will issue our assets as freely transferable 24/7 to a global audience. We have figured out a way to bridge the liquidity that exists in TradFi into DeFi in doing that just in time, so that these assets that you're holding on-chain can actually remain pegged to the underlying, and you can still freely move them 24/7, use them for more urgent purposes and the like.

• 30:57Speaker 04

  So I do think our solution is significantly better than what exists out there. Once we launch, people are going to be able to see that. And I look very much forward to seeing the adoption that it finally gets. Because when people think of tokenization of stocks right now, they're kind of a little bit like, meh. You know, look at the current metrics, it hasn't really taken off. But we would argue in part that's because the underlying product structure and market structure is not very good.

• 31:23Speaker 03

  Yeah, I think that makes sense. Where can we send people to find you on the internet or find out more about Ondo and your tokenization efforts?

• 31:29Speaker 04

  Uh, you know, ondo.finance, go there, check us out. A lot of the content will be geogated because a lot of our activities happen outside the US. For now, I would recommend them to check out our Twitter account and the like. We post a lot of blogs. We really focus on user education on, you know, why liquidity matters in tokenization, why our model is, you know, different than others. So it does, you know, we are working on the user education for all this stuff, but we're pretty confident that, you know, in hindsight, people are going to look at this stuff and say, oh, my God, it was so obvious, right? If a stablecoin can really enable distribution of the US dollar to a global audience, then tokenized stocks and ETFs can do the same thing for US capital markets.

• 32:15Speaker 03

  Makes sense to me. Let's see if you guys can get it done. Good luck. We're super excited and we'll do this again in the future.

• 32:21Speaker 04

  Awesome. Really appreciate it.