The Wolf Of All Streets - Tokenizing Trillions: Here's Why Massive Institutions Are Secretly Betting On Crypto | Nathan Allman

Episode Date: May 4, 2025

In this episode of The Wolf Of All Streets, I dive deep into the future of crypto with Nathan Allman, Founder & CEO of Ondo Finance. We explore how Ondo is partnering with giants like BlackRock and Goldman Sachs to bring real-world assets onto the blockchain. Join us to discover how tokenization might change finance forever. Nathan Allman: https://x.com/nathanlallman ►► JOIN THE FREE WOLF DEN NEWSLETTER, DELIVERED EVERY WEEKDAY! 👉https://thewolfden.substack.com/ ►► Arch Public Unleash algorithmic trading. Discover how algorithms used by hedge-funds are now accessible to traders looking for unparalleled insights and opportunities! 👉https://archpublic.com/ ►►TRADING ALPHA READY TO TRADE LIKE THE PROS? THE BEST TRADERS IN CRYPTO ARE RELYING ON THESE INDICATORS TO MAKE TRADES. Use code '10OFF' for a 10% discount. 👉https://tradingalpha.io/?via=scottmelker Follow Scott Melker: Twitter: https://x.com/scottmelker Web: https://www.thewolfofallstreets.io Spotify: https://spoti.fi/30N5FDe Apple podcast: https://apple.co/3FASB2c #Bitcoin #Crypto #Ondo Timecodes: 0:00 Intro 2:00 What Is Tokenization? 5:11 NFTs vs Real Assets 7:29 Ondo's Unique Approach 11:22 Why Use Ondo Chain? 14:08 Institutions as Validators 17:30 Regulatory Landscape Shifts 20:07 Benefits for Institutions 23:03 Yield-Bearing Stablecoins Explained 27:56 Are Yield Stablecoins Risky? 32:11 Future of Asset Settlement 37:34 Legacy Markets Pressure 39:22 Circle's Stablecoin Challenge 43:09 Stablecoin Issuers as Banks 46:50 SEC and New Regulations 51:31 Ethereum's Future Challenges The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. This video was created for entertainment. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this video constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.

The biggest benefits from tokenization don't come from creating liquidity per se. To some degree, you know what's coming. Yeah, it's a really sticky point. I'm going to go out on a limb and say, I'm not sure that's going to go well. Yeah. Have all of your financial assets just on your wallet. And in a single click, you can move from platform to platform. There's no lock-in.

Are these competitors or are they future partners? Fernanda. Both. Right. There's always an element to both, I think. The tokenization of real-world assets is arguably the best use case for crypto moving forward. It's certainly one of the ones that's getting the most attention. And one of the companies that's at the forefront of tokenizing real-world assets is Ondo Finance with partnerships like BlackRock, Goldman Sachs and Franklin Templeton. They are driving institutional adoption of this technology so nobody understands what's coming for the industry better than Nathan Allman, their CEO

and founder. There's an incredible conversation on the future of crypto with an incredible, incredible mind. Tokenization of real world assets has been one of the biggest narratives in the crypto world over the past few months and even years. You're at the forefront of it. Let's just start from the very beginning. What does that actually mean? How does that actually work? Yeah, thanks, Scott. It's great to be here. So tokenization is the representation of off-chain assets on a blockchain. Bitcoin was really the first digitally scarce asset

that could be held by anyone, anywhere at any time and transacted on a peer-to-peer basis without any intermediaries and allowed for very low friction storage and transfer of wealth. That concept has been replicated many times in crypto. There's hundreds of thousands or millions of different tokens that are out there. And what we're trying to do is take a lot of the benefits of that technology, the low friction transferability, the global access, and apply it to so-called

real world assets. So stocks, bonds, ETFs, traditional financial assets, tokenization broadly could refer to art collectibles, really anything that is not natively generated on a blockchain. I think we saw the first iteration of this with the NFT craze, although that went in a wildly different direction than maybe the tokenization maximalists would have expected with board apes and cartoons and 10,000 PFP collections. But at the core, an NFT was effectively what we're talking about, correct? Well, I guess there's fungible and non-fungible asset tokenization. NFTs, of course, by their name, were non-fungible assets. And everything that we do at Ondo is tokenizing fungible assets.

So certainly a core distinction there. I guess NFTs were, in most cases, also generated specifically for distribution on a blockchain. They weren't assets, like financial assets that are also sold in markets off of a blockchain. So I guess they're a little bit of a hybrid there. I would agree that that's probably a type of tokenization, but wouldn't fall under the category of so-called real world asset tokenization, which is the space that Anno plays in. Right. The initial days of NFTs, though, the things that people got excited about were not the cartoons. It was about my car title could be an NFT and I could transfer it from myself to another

person or my mortgage, given we never really saw that play out or, you know, tokenizing a house. We saw that happen, right? With an NFT and I transferred the NFT and therefore the ownership of the house novel, but it didn't really get there. Yeah. And really, this is an example of a much broader thesis that many folks in the industry had for quite many years, which is that because tokens can be transferred so cheaply, quickly, securely, that by tokenizing assets that traditionally settle or transfer on slow cadence with high cost, that we can make those assets more liquid and more easily transferable. And it's a fairly naive thesis because it fails to look at all of the reasons why these assets, like real estate, are illiquid. Technology might be one of the factors, but there's also

challenges around how do you price these bespoke assets. There's regulatory challenges. Often issuers or asset owners don't want these assets to become liquid. So there's a lot of barriers other than tech, which it turns out is not really the limiting factor. The tokenizing individual homes and making them super liquid was always particularly destined to fail. And securitization, bundling these assets of similar types, slicing them out into tranches with different risk levels. That's the trad-fi way of creating fungibility amongst non-fungible assets so that more liquid markets can form. non-fungible assets so that more liquid markets can form. I think that works really well and we're going to see more of that on-chain.

We think the biggest benefits from tokenization don't come from creating liquidity per se, which tokenization really doesn't do, but rather to expanding access to already very liquid tokens and to enabling on-chain programmability. So all the benefits of DeFi, again, for already liquid tokens. Okay. So explain then, Ondo's unique approach to all of this, because obviously we've seen a competition for the tokenization of real world assets. We see major institutions doing it with you and with others. We see it happening on popular L1 blockchains, but we also have built for purpose

layer one blockchains like Ando. So what are you doing that's different? Yeah. So we started out by tokenizing one of the most liquid assets, you know, U.S. treasuries yield-bearing alternatives to conventional stablecoins. We call them yield coins. We have two products there. We have OUSG, which is our permissioned US accessible Treasuries fund, accessible to qualified purchasers and accredited investors to qualified purchasers and accredited investors that can be transferred between white listed holders. And then we also have USDY, which is our effectively permissionless yield coin. Like stable coins, you have to be KYC to mint and redeem, but you can transfer more freely

in secondary markets. Both of these products, of course, pay their holders a yield, unlike conventional stablecoins. So we started doing that in January 2023. So a little over two years ago was when we launched the first of those products, OUSG. There's been an explosion of tokenized treasuries and other yield coins since, you know, usually, you know, 50 plus today. And as that's been happening, we've been working on, you know, the next big step that you know, we think the industry is going to see, which is tokenized public equities and ETFs. So we announced a few months ago at the end of summit in New York, on the global Global Markets, which

is our platform for tokenizing public securities. So anything that you can buy today at an interactive brokers or a Robinhood, you'll be able to buy on chain from us. And you'll be able to do so very importantly, with access to the same liquidity that you would have at a conventional broker dealer. We think that's really key for making sure that the tokenized representations of these securities are not any worse than the traditional representation. Then I think that's table stakes to making it possible to tap into the accessibility

and programmability benefits that come from tokenization. And then as part of enabling on global markets, we've found a number of infrastructure challenges with conventional public chains, particularly when it comes to getting institutions, broker dealers especially to participate in issuance and validation on the network. And so we are developing OndoChain to support Ondo Global Markets and similar tokenization activities. It's a hybrid public permission chain. So validators are permissioned. But just about everything else about the chain is permissionless. So anyone can view transactions on the chain, deploy code, have a wallet, etc. It's really purpose-built as a hub for tokenization to then distribute these tokens to the broader public blockchain ecosystem.

Our assets, USDI and OUSJ are already on eight different public blockchains and growing. And we're very much going to continue to focus on distribution and its multi-chain matter. And we think the world is going to be increasingly multi-chain, but on their chain will play a key role in coordinating a lot of that activity when it comes to tokenized assets. What makes on the chain or any other chain that's somewhat purpose built for a specific, you know, for a specific use case, what makes it different than using an Ethereum or Solana or an Avalanche, something that's already been built? And why make that jump? One important consideration, particularly for regulated securities markets is not having front running and other forms of

malicious MEV. These are particularly problematic from a regulatory perspective. Broker dealers have a responsibility to not front run their clients' transactions and provide so-called best execution. So by permissioning the validator set, that's something that we can pretty easily, effectively guarantee. While we think not really giving up that much commercially given that everything else is still permissionless. And then also just from a regulatory perspective, not paying transaction fees to unknown validators, which can cause AML and other issues there.

But we're building a Cosmos chain, which is very flexible in what it lets you do. So just as an example of something that we're pretty excited about is coordination of cross chain governance. So we will have contracts on Ethereum and a whole bunch of other public blockchains that support instant minting and redemption of our global markets tokens. But there are risk parameters, mint limits, etc. that have to be governed on all these different blockchains. And the way that we're going to coordinate that governance is through Ondochain. So the institutions who are participating as validators in the on-chain network will actually

be responsible for upgrading via a governance mechanism that we're working on with them, the parameters of the global markets infrastructure on all of these other public blockchains. on all of these other public blockchains. So part of bringing AutoChain into existence is a response to some of these challenges that public blockchains have for our use space. And then part of it is just, you know, wanting a new hub for coordinating the activities for the infrastructure that we are building

on all these chains. I mean, when you look at your site, you have BlackRock and Goldman Sachs, obviously scrolling across the bottom, Franklin Templeton. These are the biggest financial institutions on the planet that you're working with in some capacity already. Are you saying that those kinds of institutions will actually be the validators on the chain?

Yeah, that's right. I mean, they're, I can't say specifically who yet, but many of the world's largest asset managers, some of which have already issued tokenized treasuries funds. I mean, you can look at Franklin Templeton as an example, like they're already a validator on quite a lot of public blockchains. I think they've really been at the forefront of that particular activity. And a lot of the other of the world's largest asset managers are going to be pretty quick to follow suit there. So yeah, it's been really exciting to see the very sudden interest, particularly from

asset managers and now increasingly from broker dealers and banks, post know, post some of the changes in the new admin, uh, and tokenization. To some degree, you know, what's coming or you get a glimpse into the future because you're talking to these institutions, you're building things that are obviously for the future and not for just the needs. Now we have tokenized treasuries across the board, as you've said, right. And we, a lot of protocols are doing that. I would say that that's a proof of concept as our stablecoins as a use case.

What are the sort of next things you think that could break this open to a much wider audience? What assets, because we have, it feels like infinite assets that could theoretically be tokenized doesn't mean it's all a good idea. Right? So what is coming next? Would you say that you're excited about? Honestly, the conversation with asset managers in particular is still pretty dominated around treasury funds where they might yield just barely scratch the surface. And you know, the prevalence of stable coins in traditional financial discussions and the stablecoin legislation

that's coming and debates around whether they're there can and can't be yield there. I think that that's really created a lot of focus around how do institutions make cash funds more usable in an institutional context? Because they're still really only used by crypto natives, particularly, and network individuals, startups, foundations for treasury management purposes, by crypto traders as collateral. But the use case is still very, very narrow. So there's a lot of discussions around how do we use these sorts of

products for international settlement, for collateral in more institutional trading contexts. Like the CFTC is recommending approving it for use in certain derivatives, transactions. That's the overwhelming focus right now. Like we are guiding a lot of the conversations towards public equities, particularly in the context of participating, you know, as service providers in global markets and on the chain. And I will say it has been infinitely easier, truly, to get broker dealers and banks to work with us as service providers for global markets than it was when we were trying to launch OUSG in the first place.

That's interesting. Is that just a matter of the evolution of the regulatory outlook and just it not being viewed as only for criminals and criminal activity now, the maturing of the asset class to some degree. Yeah. I mean, two years or I guess it was two and a half years ago, just so many of these broker dealers and banks, blanket policies to not work with folks in digital assets. And it's just a total 180.

Not only are they able to work with folks in digital assets, but it's like a strategic priority and they're throwing tons of resources at us and competing to want to be a part of it. So yeah, it's very exciting to see. I mean, even that's a big shift from a year ago. There was interest from a lot of asset managers then, particularly FOMO and after the BlackRock Treasuries Fund and tons of them put in and still have their own treasury funds in the works. But the interest in the banks and broker dealers is much more recent. I think the repeal of SAD121 is certainly part of that. But obviously...

Yeah. I was going to float the not- tin foil hat at this point theory that maybe they were still interested a year or two ago. The Fed and the FDIC at OCC were just telling them they couldn't. The Operation Chokepoint 2.0 is not a myth. We've now seen it pretty handily proven across the board. And you even have the Fed Chairman Jerome Powell speaking on it and saying that banks should participate in crypto activities.

I'm looking into all the ways that we were blocking that in the past. There's no mystery that they just couldn't. I would say that in my opinion, that's largely administrative change or just policy shift with a new administration. That's opening the floodgates to a lot of people who probably wanted to do it and literally just couldn't. Yeah, absolutely. You know, and I think the the attitude the new SEC has been taking has been, you know, very constructive as well, you know, towards encouraging these institutions to support things like tokenization.

support things like tokenization. So for an institution who can easily access United States treasuries from the United States treasury, right, and can take short duration bonds or, you know, and easily get in and out of them, what's the advantage for them of tokenizing that exact same asset for a comparable yield? Distribution, really, right? I mean, for now, institutions are after distribution to a global, somewhat more retail leaning, certainly for now, crypto native audience. I mean, capital markets are still extremely fragmented. Just about every country has its own securities

depository system. Cross-border security settlement is extremely slow. Access to US financial markets is very cumbersome. I mean, accessing margin outside the US for retail at remotely reasonable rates is very challenging. Through things like on global markets, we can provide global retail investors with a much better way to access US financial markets. And ultimately, that's more distribution, that's more fees at the end of the day for broker dealers, custody banks, asset managers. I mean, they're still playing all their conventional roles. Yeah. It's not because they want to hold the treasury. It's because this is a way for them to expand their customer base and utilize those in more novel manners. And so even participating in DeFi or, as you said, opening

to customers all around the world. I don't think people realize that if you're not in the United States, it's really difficult to even buy stock. I mean, it's not that easy to buy Tesla stock if you live in most places in the world. Yeah, that's right. I mean, I think there's like a couple of phases here, right? I mean, phase one is the institutions, I mean, banks, broker dealers, custodians, at least, they do just want to hold the assets and earn fees from doing so and, you know, broker the buying and selling from an audience that itself is using DeFi. And they're not using DeFi yet. But then, they're also looking at DeFi. And we're still in the pilot phase of what some call institutional DeFi, using smart

contracts for more traditional regulated financial activities. And I'd say we're still in like relatively early days of that. And, you know, that's that's going to take a good bit more time. They can make money on customers outside the United States. They probably couldn't make money on before for now. And that is an exceptional use case for them. It's interesting that you have USDY, which is obviously a yield bearing stablecoin that can be used in DeFi, right? As you described it, like any other stablecoin, of course, not available in the US still. And we now have this push and pull with stablecoin regulation on yield bearing stablecoins.

Actually, it seems like there's consensus that stablecoins need to be regulated, that we need sensible regulation, that people should be allowed to use them. But the one sticking point that the industry actually really wants, Brian Armstrong, notably maybe the loudest voice, is that these should be yield bearing instruments and largely the legislators are pushing back

and saying they should not. Yeah, it's a really sticky point. We created USCY in part, given the regulatory uncertainty around stable coins. USDY is very clearly able to pay yield because at least from a US securities law perspective, it is structured as a security. It's a tokenized note that is secured back by US treasuries with an interest rate that is set by the issuer on a monthly basis.

So we think from the perspective of USDY, whatever happens within reason, on the stablecoin legislation, we think doesn't really impact our ability to pay a yield. But it certainly will be interesting to see where things shake out there. I think there's reasonable arguments to make to say that stablecoins potentially ought not to be paying yield or at least that ought not to be where we start from while we can have equivalent products that are under the remit of securities laws that can pay yield. Just like money market finds and all sorts of equivalent securities, I, you know, compete with, you know, low yielding deposit at a bank account, but, you know,

pay yield and are fully backed by treasuries. I mean, I guess it does make sense that a stable coin right now, nobody wants it to be deemed a security in the minute that you add yield, it likely is. So I think it certainly looks a lot more like a money market fund. And part of that is because, you know, banking regulators have not approved narrow banks historically, right? So this idea of an institution that's like, only holding treasuries or only parking cash and like a Fed master account and issuing liabilities, like if it's regulated as a bank, you bank, it's a so-called narrow bank. And

there's been all of these historical applications pre-blockchain to get them approved. One literally called the narrow bank, which the Fed denied its application, I think, for a Fed master account in part on the grounds that it was viewed as being too risky or too potentially disruptive to conventional commercial banks, which the economy relies on increasingly less, but still to some degree for commercial lending activities. And I think part of the argument is that, well, if you really want this exposure, you can just go get it in a treasury money market fund. And it's maybe not quite the convenience of narrow bank, which has, you know, sort of unlimited intraday wires in and out, etc. But it's very, very close.

It's interesting though, in the context of tokenization, there isn't really any convenience difference between a yield bearing stablecoin that is presumably regulated as a banking-like instrument and something like USDY, which is, I'll call it a yield coin, that is more regulated under the securities law umbrella. When you're transferring a token, it doesn't really matter how it's regulated because settlement is all happening on the same rails. Right. I guess what's interesting, and this is the question with everything in crypto where there's yield, is that there's fear that the yield is somewhat being

orchestrated in the background in a way that people don't understand like we saw in all the CIFI collapses of the past. You would think that a yield bearing stable coin that's simply taking the model that the company issuing that stablecoin is already using to make money and just passing on some of that yield to the customers and taking less profit themselves would be a no-brainer. If we all know that Tether is making billions of dollars, for example, by simply buying short dated treasuries and collecting that four to five percent yield and that amounts

to billions of dollars because of how much they have under AUM. If they were to say, hey, we'll give two percent to our customers and we keep two percent, that shouldn't be controversial to me. But I guess the yield would have to come within some very specific guard rails to not be clearly a security. If all of a sudden they become a fractally reserved bank and start lending that money to earn a larger yield to pass on to their customers, I see where that becomes problematic.

Well, sort of ironically, in some ways that makes it easier for that sort of instrument to fall within banking. Because it's fractional reserve banking. Regulation, you know, if they're fulfilling this banking function of lending. Look, I certainly think the product of a stablecoin-like instrument that pays yield should exist. Of course I do. We built that. A great one.

But I do think there is a lot of nuance in what is the right regulatory regime, you know, securities law, banking law, you know, etc. to allow that type of product to exist. And I do think there are complicated arguments around like the sequencing. I mean, the disruption to banking, I do think is a real concern. I mean, I'm very like anti-commercial banking in the long term. But there is, you know, I will give some credit to that argument for now. There's also complicated tax issues when you deal with distribution of these products in the US, right? I mean, how do you... You need sort of reasonable systems in place to, you know, to deal with tax compliance in the context of a yield bearing permissionless

instrument that's distributed in the United States. The notion that narrow banks or fully backed banks should not exist is one of the biggest head scratchers I've ever seen in this country. Obviously, I'm friendly with Yeah. Caitlin Long from Custodia Bank. Is very frustrating for sure. Yeah, from Custodia Bank and we've had countless conversations about this but being rejected because you're not willing to take risk and basically support the

financial system by loaning out money and wanting to be fully backed simply by treasuries, I don't get it. I just don't understand. Yeah. So I mean, maybe one day we'll see those with this new regulatory regime. Maybe it's going to change now, but I have my doubts. I just don't think that they want those. But stablecoins do still seem to be the killer use case right now for crypto. And as far as regulation, by far the lowest hanging fruit, right? I mean, we're going to get some sort of stablecoin regulation, I would bet, in the next four to six months. Hopefully, it'll be sensible. Will that affect your business meaningfully? I think that having more legitimacy in the stablecoin market will be helpful for trying to get institutions to actually use tokenized treasuries because a big part

of the benefit of tokenized treasuries, at least as they exist today, is 24-7 liquidity in and out of stablecoins, which themselves are already very liquid for folks who are able to touch them. But institutions generally aren't able to touch stablecoin so they don't care about that benefit. So yeah, I think if and when institutions are able to touch stablecoins, then all of a sudden they're going to start caring about that. Yeah, it seems like these institutions that have trouble settling on weekends or doing business would love stable coins even for that simple purpose. I think Stripe has to some degree integrated USDC to do those basically transactions on

the weekends when the banks are closed and this is very obvious. 24-7-365 for settlement should appeal to every institution. Yeah, absolutely. So as you continue to build out these new products and look at new markets, I kind of asked you what comes next that you think will be popular. Do you think that we actually see these tokenized products start to replace the traditional rails that we have?

Like a lot of people, for example, point at T plus one, T plus two, T plus zero, you know, settlement in the stock market and the clearing houses and say, hey, if I tokenize that same Tesla stock, you buy it from me, I send it to you, you send me a stable coin, we're done here, what's going on? Do we ever get to the point where that is the standard or is there not that much demand for tokenized individual securities? Is that not how people are going to trade? It seems like a no-brainer that the world would at least move in that direction. Yeah, I think so. I mean,

look, we're racing to get global markets out. We're in deep partnership conversations with a bunch of crypto exchanges and wallets, and it seems like they're all extremely eager to offer equities to their users. So we've been very B2B2C focused, working with these sorts of partners to get the product out there. We'll learn a lot over the next six months once that goes live and we get some data about what the demand is. And I'm certainly excited to get that data. I think that the early users are not ones that have great access today. So I don't think that we're competing with traditional settlement infrastructure right now.

You actually can think of a lot of what we're doing as like building a almost a layer two settlement network for these sorts of public securities that is on top of and compatible with the existing security settlement infrastructure. Public securities in the US are all ultimately held, well, public equities at the DTC, the Depository Trust Company, which is a subsidiary of the DTCC. And that's still the case for all the securities that are going to be backing the tokens that we'll be issuing. It's just that holders of our tokens can settle between each other 24-7, 365, as you said, on a real-time gross settlement basis. They don't have to wait T plus zero, T plus one,

T plus two. All of crypto, for the most part, has been done on a real-time growth settlement basis. And I do think there is a little bit too much disdain that a lot of the crypto industry has towards this idea of delayed settlement. I think that we're heading in a direction in all of finance towards shorter and shorter settlement windows. But there is a certain amount of grease to the system that having short settlement delays allows. And we feel these pains even in crypto. Particularly when you start thinking about distributing assets in a multi-chain

environment, when it takes seconds to minutes to move assets between different chains, if you're having to pre-fund everything, now you need like, liquidity pools, like giant liquidity pools and stablecoins sitting on all these chains that you're not running interest on just so that you can enable certain transactions where if you had effectively a cross-chain clearinghouse that extended even 5-10 minutes, an hour of credit to participants, a lot of these things would be much more capital efficient. I'm using this example because it's something we were addressing recently in the context of cross-chain instant minting and redemption for our tokens.

But delayed settlement also allows for netting. There's something like 99.9% reduction in the amount of trades that actually take place to what's settled because you trade with me and then I trade with someone else and they sort of net out and you just settle to that someone else. I think finance will be done on very close to a real-time gross settlement basis, but with a little bit of an asterisk. I mean, we're already seeing now, I believe it was NASDAQ that said that they were considering 24-7.

I don't know if it was 24-7, but seven-day or six-day trading. Clearly crypto has put a bit of pressure on legacy markets to at least increase the time that they're open to allow more people to participate more hours of the day and more days of the week. So that's already an interesting nuance there. I don't think they'll get to 24-7, 365, but we're certainly pushing them closer. Totally. Yeah. I mean, 24-5 to start, which we're seeing in more and more platforms, that goes hand in glove with offering global accessibility for markets that might be sleeping

during US market hours. Interestingly, something just hit the tape as we're talking, which is that Circle to debut new global payments platform and NYC launch event. I guess this is announced today, but Circle's unveiling a new cross border payments platform aimed at challenging legacy giants like Visa and MasterCard. So this obviously very much speaks

to what we're talking about. And this is really interesting. I don't know if you saw this, but Circle also introduced a refund protocol for stablecoin transactions offering built-in on-chain dispute resolution. Okay. That's interesting. Yeah, they're going right after the card networks. So this is a direct attack on Visa and MasterCard in America. Yeah, sounds like it. And Visa and MasterCard are responding, right? I mean, they've been leaning very heavily into tokenization. On-chain dispute resolution is really interesting because I think a lot of crypto natives would say, once it's done, it's done, right?

And see a lot of problems with rolling things back. But if you want to participate in the big pool, then scams or even just wrong transactions, incorrect charges, chargebacks, which happen all the time with the MasterCard and Visa, they have to be a part of it. Yeah, absolutely. And that's another thing that delayed settlement in general allows for, some window of time before things are totally final. What's the 10-year vision? Maybe I asked 20 or 30, I don't know, but I'm pretty optimistic that between AI and robots that 10 years are going to look very different. So I think we do have a pretty accelerated timeline in the world. What does 10 years look like for Ando, for tokenization in general? I think that DeFi gives us a great glimpse into the future.

For those of us who were big power users of DeFi and DeFi Summer 2020. Were you farming tacos and yams? Oh yeah, 4% an hour for yam. It's a great one. But I always felt it was a very magical experience to have all of your financial assets just on your wallet. And in a single click, you can move from platform to platform. There's no lock-in whatsoever. Everything's interoperable and composable. I think that's the future that we're going to see, obviously, with some guardrails and growing up a bit for all investable assets.

Today, we have a total Frankenstein of different settlement systems by asset class and by region. When I was at Goldman, I worked at Goldman for a couple of years on the digital assets team before founding Ondo. And I would spend time just interviewing ops, another back office folks about why things are the way they are for settlement of different assets. And it's always just like... Because that was the simple fix for whatever the problem at the time was. There hasn't been a lot of very forward-looking, particularly global design in a lot of these systems. And I think that blockchains and tokenization represent a pretty disruptive and fundamental

upgrade to that system. One where all financial assets, whether it's money or a derivative or a security are interoperable and really accessible on a relatively level playing field to institutions and to retail. There are so many services right now that retail would love to have access to, like Prime Brokerage, where you can cross-collateralize, buy securities and crypto, and have best execution on a whole bunch of different venues that are just relatively expensive to provision in part because of that Frankenstein nature of our existing clearing settlement systems.

And I think that in a world that looks more like what we have in DeFi, but for traditional assets, the marginal cost of provisioning these sorts of services is just next to nothing. And so retail can have access to the same types of financial products and services as the largest US-sized funds. That's one of the most exciting parts really, is that there's no longer the have and have nots, at least with access, when you really democratize this and open it up and decentralize it. Absolutely.

That's where tokenization really, really becomes exciting, especially for the average person, especially for the average person that's not in the United States. It's funny, as we're talking, I always have kind of just a newsfeed spinning stuff. We obviously just had the story that I shared, another one.

Circle BitGo about to apply for bank charters. Others may follow. This is the Wall Street Journal today saying also that Coinbase and Paxos are exploring bank charters amid evolving US stable coin regulations. It's just amazing how fast this is moving, but that would allow them, at least in some restricted manner, to do lending and borrowing that we just described. Maybe it would look like what Anchorage somewhat has, because I think they have some sort of banking charter. But this is interesting. I wonder if this is because they want to provide those services or because they have some inside

baseball on the stablecoin laws that are coming that may state that stablecoin issuers are required to have a banking charter or a relationship with a bank. Yeah, totally possible. It also just reduces their reliance on third party banks, which they, it's true, of course, need for minting interdemption purposes. But yeah, I think there's a huge uptick in the sort of convergence in competition between these kind of crypto native and more traditional players. I mean, earlier you're talking about Circle and Visa and MasterCard, you know, Kraken offering equity and all the crypto exchanges offering equities, you know, now competing

against Robinhood, you know, just getting more and more into crypto and into tokenization. So I think that's just a sign of our industry growing up. Are these competitors or are they future partners, Fernando? Both. There's always an element to both, I think. That's interesting. Yeah, I mean, you're building similar products, but there's a lot of things that you'll probably be able to do for them that they can't necessarily do for themselves with the infrastructure that you're building. Yeah. I think we're less competitive with a lot of those players because we are pretty B2B to C focus.

Like just about all those players you mentioned have like their own and retail user bases. Um, but to what degree are like Kraken and Robinhood competitors? Like, I don't know. I would think relatively high, but I'm not sure exactly. For sure. Is there anything that's happening at that legislative or regulatory level that concerns you right now? Obviously, we're all very excited that the massive sea change and how the industry is being approached. But I mean, listen, we're inherently distrustful of government as people who have been in Bitcoin and crypto for a long time. And I have to imagine that even though we're getting legislation and regulation, that there could be some pitfalls or even unintended future consequences that they don't anticipate because it's so complicated.

Yeah, look, I mean, what we pay most attention to is what's happening with the SEC. And I think everything's been great there so far. And we're engaging on what we would like to see in terms of sandboxes or other guidance in the tokenized security space. On the stablecoin, yeah, and I think in general, for what we are trying to do at Ondo, we just don't think that we need a whole lot of new legislation, really just new regulatory guidance or further guidance. I'm not as concerned as I think a lot of folks in the industry are around stablecoins maybe not being able to pay a yield because as we talked about earlier, I think that can be addressed in a securities law umbrella. I don't know the status of the

market structure stuff. I think that's coming a little bit later this year, but obviously, that'll be important and probably an even bigger unlock for us to get some clarity on what is in a security. How big do you think this market will become for the Black Rocks of the world and the Franklin Templetons and the Goldman's? I mean, do you think that this becomes a really meaningful part of their earnings on any given year? It seems like they're definitely dipping their toes. I'm just wondering when they jump in.

Pure crypto or tokenized assets? Yeah, tokenized assets, pure crypto, either one. Yeah. I mean, the line between tokenized assets and traditional finance is just going to become so blurry gradually over time that, yeah, it's sort of hard to answer that one. On crypto, I mean, I think the Bitcoin ETF has already become fairly material. So yeah, it'll be interesting to see what the demand is like for all these other ETFs as we see them come to market. There seems to be a lot of interest in all these micro strategy clones for all sorts

of other tokens as well. So yeah, it'll be fun to watch. I'm going to go on a limb and say I'm not sure that's going to go well. Yeah, it's quite interesting. Were you a Bitcoiner first? How did you actually find crypto on a personal level? Was it because you came into Yieldfarm Yams or were you here before that? Obviously, you know, the digital asset team. So yeah, I got into Bitcoin, like most folks first, kind of late 2016. Nice. And then yeah, obviously followed by Ethereum and ICO media, you know, followed subsequently. And I think that was sort of the white paper stage of our industry. So I spent a lot of time, you know, reading

and dreaming about all these early decentralized applications, most of which have never really been built yet. DeFi is really, you know, the one sector where we've seen a lot of things built and working. So, you know, renewed my excitement in 2020 when I saw all of that and, you know, just doubled down since then. What the hell is going on with Ethereum, man? Yeah, it's kind of sad to see. You know, you still got to you still got BlackRock and other

institutions are tokenizing funds on Ethereum. It's being used. It still has a ton of TVL. I can't make sense of the price. I mean, I get that there's an existential crisis. Yeah. I mean, I think the relevance of it in real world assets is pretty limited. I mean, like we started there by default, because I grew up in Ethereum DeFi.

And then I think BlackRock did the same. And we were there and it's pretty easy default. But the real world assets are so concentrated. It wouldn't take much for those assets to move elsewhere pretty quickly. So, yeah. Yikes. Yikes. So, the pain might not be over. Fun. I mean, really, like I've been a pretty relentless Ethereum supporter over the years.

I just thought that there was much to do about nothing, but it seems to be gaining traction that maybe there's something happening here. I think it is challenging to compete. I sadly, it is challenging to compete as a chain without having slightly more, you know, coordinated partnership, go to market, governance efforts. They had it all. I know that's very anti the, you know,

decentralized maxi ethos of crypto. But a lot of the use cases that we see are just not, you know, around tokenization as an example, are not ones where decentralization is, you know, the core concern. I mean, decentralization is important. but most Bitcoin maxis are also really excited about BlackRock having an ETF. Yeah, whatever pumps the bags. There's always a little bit of cognitive dissonance. People cheer for the things that make their bags go up, even if they're maybe anti the

original ethos of why they bought that asset. Yeah. I really appreciate the chat. I know that we're up to time. Where can people follow you follow everything on those doing and participate? Yeah, our websites on finance. We're probably most active. Otherwise on Twitter, at on no finance and now I'm on Twitter

as well at Nathan l. Olman. Thank you so much, man. Always a pleasure to chat. Can't look for I'm looking can't wait to have these conversations down the road as all of these things we're guessing at start to come to fruition so that we can make more wild guesses of what will come after that. Yeah, absolutely. Thanks for having me. You're great to be back on. Thanks, Scott. That's dope.