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Today we covered Converge, a new blockchain aimed at products and apps that offer institutional investors a way to engage in tokenized assets. Speaking of tokenization, Blockworks research analyst Carlos Gonzalez Campo writes a new report on the subject.
“We anticipate the rapid development of dedicated infrastructure,” writes Gonzalez Campo.
And you don’t know about it? We are already seeing this kind of development in the Ondo chain and convergence. Both are “designed to meet regulatory requirements, leveraging the efficiency and transparency of open blockchain networks.”
“In the coming months, we will see the biggest opportunity in the tokenization of non-liquid markets, particularly private equity. However, the success of integrating off-chain assets into the blockchain ecosystem is heavily dependent on a clear and consistent regulatory framework,” he continued.
Gonzalez Campo argues that tokenization of private equity makes more sense than public stocks due to the entry barriers and illiquidity that plague the private market.
“Unlike public stocks that are already easily traded on traditional brokerage platforms and apps like Robinhood, tokenized private equity adds efficiency to valuation violations while accessing fractional ownership of grown private companies,” he writes.
However, as shown in the chart below, tokenized stock is a bit of interest.
Source: BlockWorks Research
Currently, tokenized versions of Coinbase, Nvidia, and Ishares Core S&P 500 UCITS ETF dominate available tokenized public stocks.
However, “We expect that with proper US regulatory guidance, stocks in private companies such as SpaceX and Open AI will be tokenized over the next four years,” the memo said.
Throughout my career, the idea of making these very exclusive private markets more commonly available has been bullied, but I have not actually acted. At least it’s not the way people get the pie they really like.
After Robin Hood changed the game for stock trading a few years ago, it took longer than I thought. But it’s exciting to see potential timelines laid out.
