Superstate如何搭建连接传统金融700万亿美元与DeFi的桥梁

This goes to why I started Superstate in the first place. As somebody who was a DeFi founder building in and looking at the space, the ceiling—the upper bound—for how big DeFi can get is not very high if the only assets you can use in it are Ether and other tokens of DeFi projects. It's not a very high ceiling for what you can do with it.

Meanwhile, outside of the blockchain, we have $700 trillion of potential TVL. $700 trillion is a lot bigger than what, honestly, frankly, is mostly Ether still at this point—Ether and stablecoins in DeFi. I looked off-chain and said, “Well, if we really want to grow this stuff, that's where we're going to grow it from.”

Robert, great to see you. Thank you for joining us. How are you doing? Superstate is one of the flagship names in our space, known for moving funds and stocks on-chain. I feel like you were extremely early to the whole meta-narrative around the importance of tokenization.

1. What does tokenization actually mean?

We are thrilled to have you on because I feel like you can actually connect the dots to what's happening at the ground level right now, as Superstate is an operating system, I guess, for tokenization. You were very early to DeFi. Everybody knows you were the founder of Compound. Talk to us about the evolution to where we are today with tokenization. In fact, it would probably be best to get your take on what tokenization even means to you at this point. It's a term that gets thrown around pretty broadly.

Yeah. Well, first of all, I'm excited to go through all this stuff. Before we even go into tokenization, I do want to say I prefer that term to RWAs. RWA stands for real-world assets. It kind of diminishes all of the assets that are crypto-native, but it's a helpful starting point.

You have assets on blockchains that are crypto-native. Ether is a crypto-native asset. It only exists on the blockchain. It doesn't derive its value from something off the blockchain, and it's entirely encapsulated within a blockchain. All the governance tokens and ownership tokens of DeFi protocols and projects launching in crypto are generally crypto-native assets. They live on the blockchain and the blockchain only. They don't get their value from something not on the blockchain.

Then you have all of the assets that are traded on stock exchanges, that live in people's investment accounts, and that represent things like the roofs over people's heads—all of the assets that aren't tokens on a blockchain. Tokenization is just the process of recording ownership of off-chain things on a blockchain instead of the way it's currently recorded. It could be spreadsheets, legal contracts, brokerage statements, or whatever. Tokenization is just taking that record of ownership and moving it onto a blockchain, where it can do new things.

2. Tokenization is evolution, not revolution

Yeah. We're going to get into all of this in more detail, but one thing I wanted to bring up—and I don't know where I saw you say this, but I've been doing some prep for this pod—is a quote attributed to you: “Tokenization is evolution, not revolution.” If it's not, call me out on it, but I want you to unpack that a bit.

To me, I think in a long time of being in crypto, there's been this rallying cry of, “Oh, we're going to kill traditional finance.” You know what I mean? Or, “They're going to bow at our feet.” But that is definitely not going to happen. Maybe you could walk us through what you mean by that.

Yeah, absolutely. I'm not even sure I originally said that quote, but let's just go with it. Evolution is updating the file format by which we record wealth. Tokens are the best possible way to record who owns something. Why? Because you can transfer them 24/7, permissionlessly. Tokens and the blockchains they're running on are basically completely tamperproof and censorship-resistant. Aside from compromising someone's private key, it's almost impossible to break the cryptography that underlies the system and steal assets.

They're totally transparent. You don't have any doubt about the fact that someone owns an asset. There's no inability to prove that they own an asset. And they're programmable. That's what DeFi is: adding logic that makes tokens move in really interesting and productive ways.

So tokens are just the best possible way to record who owns what. There are a lot of other ancillary reasons why this is amazing. The fact that we can have one ledger reduces confusion and redundancy, as well as the cost of having everyone on Wall Street keep their own record of who owns stuff. But tokens are honestly the best form factor we've ever, as a society, created to record who owns something.

Now, that's, in some ways, a revolution, but it's also just an evolution. Right now, things are recorded in databases. They're recorded in spreadsheets. They're recorded on physical paper that sits in filing cabinets. That's how we record stuff.

When I think about this journey, it's really just replacing all the old ways of keeping track of who owns things with the best possible file format, which is a token on a blockchain. And that's an evolution. That's like saying, “Hey, we're just going to make what already exists better, faster, cheaper, more transparent, more resilient, always on, and enable it to have new use cases in DeFi.” It's not throwing out the old system. It's upgrading it.

I always focused on DeFi-native yields and assets. My attention was on the likes of Compound. Then, as this sector for RWAs grew—and again, I think to your point, it's better to refer to all of this as tokenization—I saw this as another niche within DeFi.

Oh, cool. We're going to have tokenized dollars, which seems like the ultimate killer use case with stablecoins, but eventually we're going to have tokenized stocks and all sorts of tokenized TradFi products. What I'm realizing is that the evolution of DeFi to ultimately power all of these tokenized TradFi offerings, let's say, is where we always hoped the space would head: that we would ultimately replace the back end of Wall Street.

What's caught me off guard is that I think we're there. We're at a point where it seems like the liquidity in tokenized products that a Superstate would offer, I expect, is going to flip crypto-native or DeFi-native assets and yield-bearing offerings.

3. Why Robert built Superstate

Maybe this is a good time to talk more about what Superstate is actually trying to solve. We see you as a bridge right now between DeFi and TradFi, but I truthfully don't fully understand, at the ground level, what it is that you all do.

Yeah, I think of us as a bridge too. This is a multipart question, but I'll start with the first part, which is you talking about whether tokenized assets will flip crypto-native assets as the primary use case for DeFi protocols. The answer is yes. It's inevitable. It's just a matter of when, right?

And this goes to why I started Superstate in the first place. As somebody who was a DeFi founder building in and looking at the space, the ceiling—the upper bound—for how big DeFi can get is not very high if the only assets you can use in it are Ether and other tokens of DeFi projects. It's not a very high ceiling for what you can do with it.

Meanwhile, outside of the blockchain, we have $700 trillion of potential TVL. $700 trillion is a lot bigger than what, honestly, frankly, is mostly Ether still at this point—Ether and stablecoins in DeFi. I looked off-chain and said, “Well, if we really want to grow this stuff, that's where we're going to grow it from.”

And so, for me as a founder, I basically looked off-chain and said, “Well, if we really want to grow this stuff, that’s where we’re going to grow it from.” A DeFi protocol doesn’t really care what the ERC-20 token is that’s going inside of it and moving around. The beauty and the magic of this stuff is that you can build something in a generalized way, and it works for any asset that’s composable.

As somebody in the space, I was like, “Well, how do we just raise the ceiling—not just a little bit, but 100x?” How can we make it so the upper bound for what we can do with a DeFi protocol really scales? The answer is tokenization.

So what is Superstate? Superstate is a bridge, an operating system, or an approach to take the assets that don’t yet live on blockchains and put them on blockchains as tokens that are able to interact with DeFi protocols and do DeFi things. The way we go about this is that we’re a technology company regulated as a transfer agent and investment adviser.

We partner with security issuers. That could be a public company whose stock is traded on a stock exchange. It could be an asset manager that’s creating a hedge fund or a mutual fund. We partner with a security issuer, take that security, tokenize it, and make that token live on a blockchain.

4. What are the primary benefits for tokenized asset issuers?

Today, we support Ethereum and Solana. We’re launching on a number of other chains, like Base, but it doesn’t really matter. We’re somewhat agnostic. We built a system to take an asset, turn it into a token, put the token on a blockchain, and when it’s on a blockchain, we’re able to record ownership, track ownership, and allow people to program securities in a way they never have been able to before.

Robert, when you talk to Superstate’s security issuers, what are they most excited about in terms of creating that tokenized offering? When I think about the DeFi features or benefits, a few of them that are top of mind are 24/7 access, global access, permissionlessness, composability, and, for the most part, self-custody.

That, to me, is a nuanced issue that’s difficult with the work that you guys do. What sells them on this? Is it, “We finally have to make the leap. We’ve waited long enough, and we’re going to issue a tokenized offering through Superstate”?

At the end of the day, the primary benefit, if you’re someone who’s creating a security, is that there’s a large and growing, differentiated investor base that can own that security if it’s tokenized that just won’t interact with it in the non-tokenized version. There are today hundreds of billions of dollars on-chain, from very sophisticated people, from institutions, and from everything in between, that strongly prefer tokens over the traditional, more analog versions of assets.

If you’re a crypto hedge fund, a person who has a Ledger wallet, or you’re just living on-chain all day, you’re probably the right investor for a tokenized asset. You’re probably going to prefer the tokenized thing over, “I own this because a spreadsheet says I own this.” The first thing is that it just opens up a different audience of owners that otherwise doesn’t exist.

If Superstate launched a T-bill fund that wasn’t tokenized and we were just launching T-bill fund number 714, it would be really hard to attract investors to it. Why would anyone want our T-bill fund versus all the other ones out there that are all identical? They’re pure commodities: same cost, same returns, same everything. There’s no reason for it.

But when it’s tokenized, you have people who are like, “I spend all day on-chain. I actually like that I can go in between Ether or Bitcoin and this T-bill product really seamlessly.” That’s superior to the one that I have to access through a website that has nothing to do with it. And so, there’s a different investor base. That’s probably the biggest advantage.

The second is that when it’s tokenized, a tokenized security is really good collateral. It can be moved around really easily, and it can go into DeFi protocols. The biggest growth area we’ve seen so far isn’t, “Can you trade this stuff in a DEX?” It’s, “Can you borrow against it?”

This is one of the things that I explored heavily as one of the people who originally built borrow-lend protocols: What can you use this for? Tokenized securities are awesome collateral—just awesome. They’re less volatile than most crypto assets by far, and therefore better assets to be used in DeFi protocols.

This is still a relatively new concept, but the securities that Superstate has tokenized in particular have experienced a huge amount of growth, specifically from DeFi protocols, from Aave, from Kamino, and from Morpho in particular so far. This relates to the fact that there’s more investor demand, there’s a different group of purchasers, and there are more use cases that create demand with tokenization that just don’t really exist off-chain in a historical analog.

For securities, you can generally borrow against them in a brokerage account, but the rates aren’t great, the collateral factors aren’t great, and it’s honestly pretty clunky, which is hilarious because they’ve had 50 years to work on this and it still sucks. The token versions on-chain in DeFi are actually superior in their offering to traditional analogs.

By tokenizing something, you’re going to get new investors who are going to be doing new things with it. It’s just a big growth opportunity. For anyone who has a security—if you’re a public company whose stock is traded—you want more demand, and you want people doing new things with it.

If you’re creating a hedge fund, a mutual fund, or a fund product, you want more investors, and you want them doing new things with it. It’s just a growth channel. The historical stuff is kind of maxed out in terms of how big it gets, but by tokenizing it, it’s just the next wave of growth.

Yeah. Personally, earlier on, when I was hearing this wave of tokenization, I was like, “Well, why do I need to bring my stocks on-chain? I have my stocks in a brokerage account. I do my DeFi stuff on-chain. Why do those worlds need to intermingle completely?”

But I completely saw the light once I understood exactly what you were saying. Borrowing against stocks is amazing, and I actually want to do that. What I see happening is that my entire brokerage account is going to be on-chain, and it’s actually really close to that already. It’s very close. There are a few things that are still missing and lagging.

When all these things are beside each other and they can intermingle, I believe that composability will create things that we can’t even fully comprehend right now in terms of usability. It’ll just happen. That’s one thing I’m excited about coming out of the ether here with all of this.

5. Superstate’s customers + how Superstate tokenized funds work

But I want to talk a bit more about what we were asking you before, just these partners that you’re starting to work with. Looking into some of these partners ahead of time, Invesco—you’re working with them, they’re using your FundOS, and Invesco has $2.3 trillion in AUM. These are numbers that we’re not typically seeing in DeFi pre-tokenization.

I know you’re working closely with Bitwise as well. I believe they’re taking over the USCC fund. Then also with Coinbase Asset Management, with KSHY, which is, I believe, a credit fund also using FundOS.

Launching in just a couple of days.

Oh, amazing. Great timing. I don’t know when this will come out, but it should be right around this time. Feel free to grab one of those and talk us through how you’re actually working with them and what FundOS actually is.

Absolutely. At Superstate, we’re really focused on tokenizing 2 different types of securities right now, although the platform that we’ve built under the hood is suited to tokenize pretty much any security in general. The 2 different security types that we’re tokenizing are funds through a platform called FundOS and equities through a platform called Opening. With one, we work with asset managers; with the other, we work with public companies.

The asset managers that you mentioned—Invesco, Bitwise, and Coinbase Asset Management—are managers that create fund products. They could be private funds, like a hedge fund, or they can be publicly registered investment companies, like an ETF or a mutual fund. But you have funds, and you have equity. All the names you mentioned are fund managers.

We’re working with each of them closely to tokenize funds. We’ve seen a lot of traction and a lot of demand for tokenized funds before. We’ve seen a lot of demand for single-name equities right now.

That’s because, very frankly, a tokenized fund can actually give you something—especially when you factor in DeFi, the speed of settlement, and the 24/7 nature—that you just can’t get in its traditional analog. A tokenized fund is genuinely differentiated and superior to the old version, versus a tokenized equity. If you can get a brokerage account, it’s going to be pretty much the same thing.

We’re starting to see a lot of growth on the tokenized fund side to start with, simply because it’s such a net-new thing. A great example of this is USTB, our T-bill product, which Invesco has taken over and formally becomes the manager of in just a couple of days.

USTB is a fund that operates 24/7 and calculates and distributes interest by the second, as opposed to how any other money market fund works, which is, at best, in business days. The unit of measurement in traditional finance is generally one business day at the fastest. But because it’s a tokenized fund, it operates in seconds. It operates in Ethereum blocks and Solana blocks—that’s the speed at which it calculates interest, distributes it, and records ownership.

The tokenized version is strictly more high-tech than anything you could build off-chain—truly, fundamentally. It inherits a lot of the design principles that I learned as a DeFi founder to make things always on, including calculating and distributing interest by the second. It’s a lot of the same principles as a DeFi protocol under the hood. The funds that you can create are just better than anything you’ve ever been able to create before.

There’s nothing you can get through Charles Schwab that calculates and pays interest by the second, let alone allows you to transfer it to another person, who then starts earning interest the second they receive it. There’s nothing like that that can exist the old way. That’s where we’re seeing a lot of traction and growth. All of these extremely marquee asset managers are starting with the question: What can we build now because of a blockchain that we’ve never been able to build before? How does it work differently, and how do we offer something to our investors that they’ve never experienced before?

The answer is tokenized funds, and that’s why they’re excited about this. There are going to be more asset managers that we’ll continue to announce over the next couple of months. Everyone is passionate about how they can upgrade the way these things work under the hood because of a blockchain.

6. The magic of finance automation that is DeFi

Can you speak to one of the things that I heard when this wave of tokenization was happening, and something Larry Fink spoke about? What you just spoke about is that a lot of this is automated on the blockchain once you get the system set up. What does this do to head counts in organizations and the efficiency of organizations?

I’ve heard these rumors that we don’t have to hire all these new Goldman interns anymore or whatever, but is that actually true? I would imagine this is probably taking out swaths of needed people. I’m not glorifying axing jobs here, but is that what’s happening?

This is one of the best parts about DeFi that I’ve always championed, mostly to traditional-market folks. It blows their minds, but people in crypto are less mind-exploded because they’re so used to crypto. When I would tell people that you had DeFi protocols like Compound and Aave administering tens of billions of dollars in assets autonomously, 24/7, all day every day, with basically no staff, it was hard for them to comprehend.

There are governance proposals that might change something, but in terms of total man-hours or person-hours of maintenance work, it’s close to zero. Tens of billions of dollars with a ghost team. Nobody’s mind could comprehend it. They were like, “Wait, but on Wall Street, to administer $20 billion, that’s about 600 people—half an office building, 29 bank branches, and a huge team of back office, middle office, front office, IT, HR, and whatever else.”

The scope of how efficient a computer program running on a blockchain can be just didn’t compute. It is a 100x improvement in efficiency. I’m not in this to lay people off. I’m in this because it’s just a better approach to building financial products. An open-source piece of code could genuinely be better than teams of people who make mistakes. The more people you throw at something, the worse it gets most of the time.

There is this fundamental efficiency improvement. Most people don’t care about efficiency. This is not the reason why someone is buying USTB or an RWA product, or interacting with a DeFi protocol. They’re not thinking, “The operational efficiency of this thing is so superior to the operating margin of a traditional finance company on Wall Street.” No one cares. It’s just this massive benefit that, if you’re building these products, you care about. The head count of Superstate isn’t huge. It’s focused entirely on technology because we don’t need teams of people like we would if we were building things completely traditionally.

7. How Superstate straddles DeFi ethos and compliance

Robert, when we talk about USTB, I’m looking at the asset listing page on the Superstate website. It looks like there’s about $900 million in assets under management, broken out across networks. There’s about $733 million on Ethereum mainnet, $1.5 million on Solana, and $9.1 million on Plume.

My point in all of this is: Tell us again what the difference is between a Superstate product versus the truly DeFi-native types of products that spring up from a protocol being run by a DAO that basically doesn’t have to worry about compliance. I think compliance is at the core of Superstate.

For all that we’re excited about with Superstate, we also recognize that you’re straddling the old world of TradFi and the old world of DeFi, trying to merge the two together.

Yes, it’s a great question. The products that we create are securities, and we designed them to be securities that are compliant with U.S. rules and regulations, issued in the U.S., administered in the U.S., but still composable with DeFi in the best possible way. That’s the Superstate ethos: How can we do everything in a fully by-the-book way and still unlock DeFi use cases? That’s what I’ve wanted to create from day 1.

There are a lot of projects that do things in 2 different ways. One is securities that are ex-U.S., where they’re like, “Yeah, it’s a security. It’s a stock or a fund or whatever, but we know it’s not going to comply with U.S. laws.” So it’s ex-U.S. only. We put that on the website. Sometimes it’s wink-wink, and it’s like, “Ex-U.S., sure.” Sometimes they’re like, “Oh, you have to use a VPN to use our website,” and they try to vaguely limit it.

We’re designing to be compliant from the start. The asset managers and public companies that we partner with are only going to work with a project that’s held to the absolute highest standards. You can go really far doing things the wrong way. I actually think you go a lot farther doing things in a way that any Wall Street institution can get comfortable with. Our ability to scale this is maximized if we’re doing everything the right way.

There are also what I would call crypto-native assets. They might not even be securities. You can make a token, and there’s draft legislation that passed the U.S. House of Representatives last summer—the FIT21 Act—that’s currently working its way through the Senate, called the CLARITY Act, which actually defines when something is a security and when it’s not. We’re clarifying all these things right now.

You have crypto-native assets. There are a lot of projects out there making crypto-native tokens that aren’t really funds or equities. They might be something in the middle, and they might have economic characteristics to them. They might go up. They might have a yield to them. They might do these things, but they look so different.

There are kind of 3 buckets: compliant securities that are ex-U.S., maybe-question-mark compliant securities, and non-securities that people are creating. We’re bucket A.

8. Regulatory landscape, CLARITY Act, and any political headwinds

Robert, you also mentioned CLARITY. Something I think about is: Is crypto going to have to potentially fight for its life every 4 years? I don’t know if CLARITY is going to pass. I hope it passes. You would be much more in the know about the impacts of this and where it’s actually heading than I would be.

We had a podcast yesterday—I don’t know if it’ll come out before this one—and the guy basically said, “If we build useful things, I don’t think it’ll matter.” I actually think that’s a pretty good take when you’re talking about this kind of bipartisan nature with crypto. I’d love to get your take on what you see with the regulatory battle and political headwinds, or whether you even see them as headwinds at all?

Yeah. So I am very excited for the CLARITY Act to pass. Not because it directly changes the way that Superstate would operate in tokenizing securities. The CLARITY Act is actually almost entirely silent on securities and tokenized securities. It's really focused on the 200,000 assets that have been created over the last 14 years, like on CoinMarketCap and CoinGecko. It's really crypto-native assets—L1 tokens, L2 tokens, app tokens, memecoins, and everything else.

The CLARITY Act defines when an asset is a security and when it is not a security, but it's kind of like the starting gun in the race for every institution to feel comfortable operating in the crypto ecosystem. Just like when the GENIUS Act passed, every single institution in America said, “Okay, now we're ready for stablecoins. Let's go.” Everybody was waiting on the sidelines. As soon as the GENIUS Act passed, everybody was like, “We're getting involved in stablecoins. It's legal,” even though it was legal before. They just wanted that assurance of legislation.

The CLARITY Act is the same thing for crypto as an industry in general. In some ways, I think it's actually significantly more important than the GENIUS Act was. The GENIUS Act, frankly, didn't really codify that much that was new or unexpected, to be honest. It said you can't make an algorithmic stablecoin like Terra Luna ever again. That's illegal. And if you're going to make a dollar-backed stablecoin, you actually have to have a dollar behind it. You can't pretend to. That's it. This is not rocket science.

The GENIUS Act, in a lot of ways, was a non-event, whereas the CLARITY Act really defines a lot of things that have never been defined. That's been the vacuum of understanding for the last 14 years, where it's like, “What is this stuff? It's all new, right? How should it work? Who regulates it? How do they regulate it?”

I think when the CLARITY Act passes, it's going to be significantly more monumental than the GENIUS Act was. That's why I think its importance is significantly greater, and what it's going to unlock is traditional players—incumbents, tech companies, finance companies, and everything in the middle—saying, “I can interact with crypto. I understand where the lines are.” That's a really powerful thing.

I'm excited for the CLARITY Act not for Superstate's sake, frankly—it's a non-event for Superstate—but just for the industry across the board. As somebody that's been building in the space since 2017, I just think it's so important and so good.

I don't want to speculate on where it currently stands. I think there's been incredible progress, and there's a lot of work happening behind the scenes right now. They say that they're hoping to sign something in July. Knock on wood—I really hope that's true. That's a little over 4 to 5 weeks away, and that would be an incredible timeline. But if it doesn't happen in July, I think it happens by year-end. I think the chances are pretty good.

I'm excited. I think it's transformative. If you're listening to this podcast, you should probably be someone who supports the CLARITY Act, and you should probably call your senator or senators to remind them of how important it is.

And then one last quick one here, just on the same wavelength. Say there's a Democratic nominee who becomes very vocally anti-crypto. How worried are you about a changing administration—what a new administration, whoever they may be, could do? I'm just speculating here. How much of a force can they still have on crypto, maybe post-CLARITY? Or are you even worried? Have we won that battle? I still don't know if we're having this fight every 4 years. You know what I mean?

It really depends, right? I don't think Elizabeth Warren is running for president, but hypothetically, if Elizabeth Warren won the presidency, even with the CLARITY Act, I think there's a world in which the U.S. executive branch and possibly the legislative branch would come down hard on crypto again. I do think there's that possibility.

The CLARITY Act at least creates actual rules for everybody. It draws the lines. It says what is legal and what is not, and within that, how different stakeholders are expected to operate. It really sets expectations for people making tokens, project teams, builders, brokers, people on the sidelines, and everyone interacting with this stuff. It creates very clear expectations that have never existed.

So even if Elizabeth Warren were president, it would still be a much better foundation to have the CLARITY Act in place, and there's a lot less that they could do. I mean, there's still a tremendous amount of discretion. They could have the government agencies crack down hard. They could have the OCC debank people. They could create a mess if they were politically against it.

I think that's less likely than it's ever been before. This is due to the fact that, in response to its persecution in the last administration, crypto really staffed up and raised the capital to be politically resilient and to be able to defend itself. I think enough members of the House and Senate have listened to this and understand that it's a net force for good, especially once there's legislation in place, and that it's not an industry that needs to be needlessly persecuted.

I don't really think we're going to have trouble legislatively, especially post-CLARITY. But the game is never over, right? There are always people who, for one reason or another, want to see crypto fail. There are a lot more people who want to see it succeed at this point. There are a lot of people who say, “Hey, it turns out that blockchains and smart contracts are really useful, and you can do incredible things with them. Let's go. Let's legalize this. Let's create a role for it.”

Nothing is written until it's written. Knock on wood, the CLARITY Act makes its way through. I think society as a whole is much more understanding of the benefits of this technology, and people are less afraid of it. But there's always room for disaster.

We need that stamp of approval that smart contracts, DeFi, and onchain finance are a force for net good. I think the CLARITY Act, to your point, is going to be that. There's definitely a legacy that we're still fighting. Every time the next hyperspeculative narrative pops up—whether it was NFTs, which I think did a lot of damage, or eventually memecoins and all the leverage around that—we have to deal with the consequences.

We've come a long way, but I think we're underestimating how big of an impact the CLARITY Act is going to be.

9. Different categories of tokenized securities

Just getting back to Superstate, when you are speaking with potential Superstate asset issuers, I would imagine one of the most important questions they have is, “How does Superstate differ? How do tokenized products differ? Are they the same? Is there something here that ultimately is going to be better for us in terms of issuing that asset on Superstate?”

I don't know if you could even bucket the types of tokenized offerings that exist out there, whether or not you support all of them. How do you dumb that down for folks?

Yeah, I'll dumb this down. I'll talk about just Category A of tokenized securities, which is compliant securities that are designed to be issued from the U.S. for U.S. persons and investors, and done in a way that's designed for composability but not permissionlessness.

10. Big differentiators for Superstate tokenized securities

One of the big things that divides the Superstate approach from offshore approaches is that Superstate tokens have an allowlist and a mapping of KYC to the investor. It's not a permissionless token that's freely transferable without KYC. The Superstate tokens themselves are tokenized securities that have an allowlist. You have to be onboarded either through Superstate or through a partner to be able to hold them, versus freely transferable, permissionless tokens that nobody knows who owns. It's probably only good people, but every now and then some hacker might steal all the tokens and do whatever with them. North Korea sucks. I hate North Korea.

Within this bucket of U.S.-compliant tokens, the big differentiator we have at Superstate when we're creating a tokenized security is twofold. One, we've designed our technology to be maximally compliant yet composable with DeFi. What I mean by this is that we track every owner. We're like, “Hey, 0xDeFiDad123—we know who that is,” right? That KYC itself is not onchain, but we as the platform know who it is. We know when it's a 0x123, DeFi Dad, or whatever, right?

We also have built these integrations with DeFi protocols where it can leave your wallet.

It can go into a pooled smart contract that holds 100 different investors’ tokens all together. We’ve built technology to look inside the DeFi protocol and track each balance in real time. So even when they’re pooled together in Compound, Morpho, Uniswap, or Orca—even if they’re in a DeFi protocol in a pooled way—we can still track the ownership of every single investor in real time and say, “Hey, we know exactly how many shares you have of this fund or of this stock.”

What this allows is allowlisted, permissioned securities to still do awesome DeFi things without the DeFi protocol having to change a thing. We’re not going out there and saying, “We need you to fork Uniswap. We need you to fork Compound or Morpho.” We’re not asking anyone to change their DeFi protocols. We’ve designed the securities themselves to fit into the existing DeFi protocols and still be maximally compliant. So that’s the first differentiator.

There are a lot of other people who have come up with these weird hacks where they’re like, “Oh, we made a wrapper token around our thing, and hopefully that plugs in correctly.” We don’t need any extra steps, extra tokens, workarounds, or hacks. The Superstate tokenized securities can interact with DeFi protocols and still get the best of both worlds. They’re compliant, and you can do awesome DeFi things without the DeFi protocol having to change. So that’s the first major technological difference between us and everyone else.

The second is that, behind the scenes, we’ve built this incredible product where life is not hard for a security issuer. They basically have to choose to tokenize their security, and that’s kind of it. It plugs into all the other service providers that make securities happen, like the fund administrators, the custodians, the banks, and all the things that work together to create the legal existence of a security. It just plugs into them, so the software behind the scenes is really good.

An issuer just says, “Hey,” and calls their bank, custodian, and fund administrator and says, “Superstate’s ready for you.” Boring, tried-and-true magic happens behind the scenes, and it’s really seamless and really good. That’s the side that no one’s going to see on-chain; you’re only going to see that side if you’re a security issuer. But the product there is truly world-class. The net result of each of these things is that it’s easy to tokenize a security and, when you do, it’s very quickly, out of the gate, able to do interesting things on-chain. That’s a great outcome.

11. When does tokenization hit its hockey stick moment?

Robert, I want to get your take on where this is going. Sometimes I feel like I’m this frog in water and the temperature is slowly rising, and I don’t even realize what’s happening because I’m so immersed in the space. Just looking back, it’s crazy how far we’ve come, and it’s crazy that there are billions and billions of tokenized funds and stocks already on-chain.

When do we get this next leg up, or this hockey stick of growth in tokenized assets? When does this turn into more of a frenzy? When does this flip the DeFi-native stuff? We talked earlier about when this flips the DeFi-native stuff—what’s needed for that to happen? This is me in a Discord asking, “Wen? When does it happen?”

It’s funny because it’s never all at once, right? I think the closest corollary is the history of stablecoins. If you ask that question—“Hey, when are stablecoins going to do it?”—it’s not like they did it all at once. It was growth that was vaguely exponential every single year for 10 years, right? It’s not like we just woke up and went from $0 to $300 billion. It went up over time.

I know it’s not a satisfying answer, but this will go up over time, just like everything goes up over time. It’s not like clarity passes and then the next day it’s, “Oh, add $500 billion. Just press the button.” I think there will be things that accelerate the growth, like clarity passing, but this is something where it’s just a matter of time plus demand. I think it’ll follow a very similar progression as stablecoins.

I remember when stablecoins were pretty new. It was like, “Wow, $1 billion. Wow, $2 billion. Wow, $4 billion. Wow, $10 billion. Oh, my God.” I remember when there were $20 billion in stablecoins, then $30 billion, $40 billion, $50 billion, $60 billion, and $70 billion. Then it was going up by $10 billion a day. It’s all just incremental.

I think the end state for this is really big. I think this will flip crypto-native assets—assets of things that are issued only on the blockchain—at some point. Eventually, it gets so big that there isn’t an offline counterpart to things. It’s not like we take something that was offline, tokenize it, and bring it on-chain. I think eventually we’re going to have primary issuance only on-chain.

We’re going to have a public company selling stock that’s only a token. It’s not also held in its traditional version. We’re going to have someone sell a bond, or many bonds, that are just tokens on the blockchain. They’re not also spreadsheets, not also paper contracts, and not also held in filing cabinets. But they’re still going to be assets that derive their value from companies and things not on the blockchain.

All this will go up. There will be a flipping. It’s just a matter of when. It’s inevitable that there will be. My guess is that we’ve seen incredible growth over the last year, and we’re just getting started, right? Don’t hold me to a specific number, but I think we’re roughly going to double every year.

12. The endgame is primary issuance onchain

You’re kind of seeing something that I would liken it to. Remember when newspapers were first getting into publishing certain articles online? This was the very early days of the internet. The New York Times would only show so many stories on a website, and, again, it was so primitive. Over time, everything in the New York Times was being published online, and eventually The New York Times became digitally native. They still have a paper copy, but if you want all that they offer, it’s primarily issued digitally.

We’re still that early. We’re still at that point where they’re like, “Yeah, maybe we’ll tokenize a few of these products,” but sooner than later it’ll be everything. Eventually it’ll be, “Why would we issue it anywhere else but through DeFi?” And again, what we call DeFi, I think we’ll all sound like dinosaurs in the future. “What are you talking about? Are you talking about finance? Is it fintech? What’s the delineation?”

13. Closing

Robert, this is wonderful. We really appreciate having you on. Again, we’re super excited that you guys are at the frontiers of tokenizing everything and bringing it on-chain. Trillions ahead of us will come on-chain. Robert, thank you. We would love to have you back in the future. Keep up all the awesome work, and I want to give you the final word before we go.

Yeah, the final word. There’s no better place to build than in crypto, and there’s no better time. Thanks, everyone, for tuning in.