Tokenization: The Wild Ride of Hype, Hope, and a Dash of Confusion!

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Finance

What to know:

  • Securitize thinks issuing regulated securities on blockchains is a walk in the park – they do it hand-in-hand with regulators. How romantic!
  • Ondo has a quick-to-scale wrapper model that’s so popular, it’s like the trendy new diet everyone’s trying – stablecoins are basically just wrapped U.S. dollars! Who knew currency could be so fashionable?

If there’s a tech hype cycle for tokenization – you know, where every asset gets a virtual makeover on blockchains like Ethereum – we’re still in the “just getting warmed up” phase.

Min Lin, managing director of global expansion at Ondo (that’s a title that sounds way cooler than it probably is), points out that the U.S. Treasuries market alone is worth a staggering $29 trillion. Add in global equities, and we’re looking at a hefty $127 trillion. That’s a lot of zeros, folks! Lin shared this eye-popping info at CoinDesk’s Consensus Hong Kong conference-because where else would you share massive financial numbers but at a crypto conference?

But hold your horses! While the numbers are enough to make your head spin faster than a roller coaster, Graham Ferguson from Securitize reminds us that we need to bridge the gap between hype and actual utility before we all throw a party about our newfound digital assets.

“It’s on us to figure out how to distribute these,” Ferguson says, making it sound like a group project no one really wants to do. “We’ve got tons of assets to tokenize! Let’s unite the hype, people!”

And while it’s tempting to leap before we look on the regulatory front, Ferguson cautions against it. The SEC is waking up to the idea that tokenization could be the plumbing of future markets. So, let’s not end up with isolated compliance islands – unless you’re into that sort of thing.

“We’ve been around talking about the benefits of settlement with tokenization and compliance built right into the token standards,” Ferguson explains, which sounds impressive, but I’m still just waiting for someone to explain it all in cat memes. “We’re really excited for regulatory clarity. No pun intended,” he adds, which is a pun I didn’t see coming but now can’t unsee.

Ondo is all about efficiency-because who isn’t? They’ve been busy tokenizing stocks and ETFs, recently launching Ondo Perps. And no, that’s not a new workout trend; it means you can use tokenized equities as collateral margin directly. Goodbye stablecoins, hello smart collateral!

So, here’s the deal: Ondo’s approach is about wrapping assets in tokens faster than you can say “crypto,” while Securitize prefers to play nice with regulators by issuing securities natively on-chain. It’s like choosing between a quick snack or a fancy dinner date with compliance.

Ferguson admits that working with DeFi protocols comes with challenges because tracking the beneficial owner of an asset feels like trying to find Waldo in a sea of red-and-white striped shirts. “We’re used to massive pools of assets, so we’re trying to work with the protocols to implement the same tracking mechanisms required for trading and transferring securities,” he says. It’s not exactly a cozy fit, but hey, it’s DeFi!

For Lin, tokenization falls into two camps: permissioned and permissionless. Picture it like your high school clique; some are exclusive, while others are open to everyone. OUSG, the Ondo Short-Term US Treasuries Fund, is like the VIP section-only whitelisted addresses allowed. Meanwhile, Ondo Global Markets tokenizes publicly traded U.S. stocks, which is more of a free-for-all after a compliance period.

“What we’ve done at Ondo is create a wrapper model for our global markets products,” Lin explains. “This permissionless approach allows for peer-to-peer transfers within DeFi. So, you can leverage these products for lending and collateral margin.” Sounds like a fun night out with friends, right?

When it comes to tokenizing everything under the sun, Ondo is proving that their wrapping approach is like instant ramen-it gets results fast. They even tokenized BitGo stock 15 minutes after it started trading on public markets. Talk about speed dating!

“This wrapper model essentially allows us to scale quicker. We have over 200 tokenized stocks and ETFs now, and we’re aiming for thousands. The wrapper model has been widely adopted. Stablecoins are just wrapped U.S. dollars, and we’re on that train too!” Lin declares, probably while riding a virtual roller coaster of success.

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2026-02-11 13:58