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Enterprise Adoption and the Strategic Risks of Tokenized Real-World As
Recorded: Aug. 15, 2025 Duration: 0:58:39Space Recording
Short Summary
In a recent episode of Cryptic Talks, industry leaders discussed the transformative potential of tokenization in enterprise finance, emphasizing trends in real-world asset adoption, the growth of decentralized finance, and the evolving regulatory landscape. Key insights included the increasing interest in tokenized stocks and the importance of collaboration between technologists and regulators to shape the future of finance.
Full Transcription
Thank you. Thank you. Thank you. Thank you. you mic check mic check guys send some reactions if you can hear me well
awesome awesome great I was waiting for this episode for a long time and finally we are all
here mantra injective team thank God we finally did it and dear listeners
welcome back to cryptic web3 to cryptic talks i'm your usual host paulie speaks bringing you the
conversations that decode where web3 is heading and how it's reshaping the business world today's
episode is titled from balance sheets to to Blockchains, Enterprise Adoption and
the Strategic Risks of Tokenized Real World Assets. Well, well, well, we are diving deep into how
tokenization is moving from theory to a boredom strategy and what risks decision makers can't
afford to ignore. Joining me are two industry heavyweights brandon head of research at injective bringing
sharp insights into decentralized finance infrastructure and nicholas nicholas uh chief
strategy officer at mantra with a front row perspective of how tokenized real world assets
are being deployed in live markets welcome dear speakers uh brendan i guess you can be first just feel free to unmute yourself
give us some updates on your mood and uh expectations about this space and maybe a little
bit background of yours yeah definitely appreciate it thanks for having me on um like you mentioned
my name is brandon uh head of research at injective also author a weekly newsletter on specifically tokenized stocks and other rwas
generally um but yeah feeling great happy to be here um and yeah really bullish on the sector i
think rwas are definitely having their moment right now um compared to you know other things
you see in crypto i think that it's definitely not a trend it's one of the like stickiest narratives
and things that'll occur probably for the next five to ten years in the space.
So I'm really excited week over week.
I've been tracking all the stuff and the volume is really picking up continually.
So tons to cover.
Excited to be a part of this panel.
Magnificent. Thank you so much. I'm excited to you sounds like i have a background very happy to have
you here today with us and uh nicholas feel free to answer again uh either nicholas or nicholas
please correct me if i'm wrong feel free to tell yourself that's why we just call it, I call myself Prof K to alleviate all these concerns.
I have a hard to pronounce last name and, you know, Nicholas or whatever.
I don't even think people call me any of that.
They just say Prof K.
I can't even get people at the office to not call me that.
So it is what it is.
My name is Nicholas Craples, though. And I've been with Mantra since the beginning in 2020.
We're about to hit our fifth year anniversary here in actually three days, technically.
And we've been through many ups and downs as a token and now RWA L1,
a token and now rwa l1 uh who is trying to shift from uh cosmwasm over to evm um much along the
same path that i suppose that injective has also gone and i'm happy to be here and discuss that
journey whoa five years anniversary we definitely should celebrate that and of course uh we're planning right now a solo episode with
mantra about recent update uh on evm stuff so yes dear listeners stay tuned and the injective team
of course we can do the same in september or october let's plan ahead but today guys i'm
gonna torture you about some enterprise adoption questions it's's going to be sweet, Terture. I hope that you're going to enjoy that.
I love to ask very deep questions
so we can spark real thinking
so our listeners can take some notes
and we can bring educational value to people as well.
So dear listeners,
we are talking market readiness,
regulatory friction, liquidity models,
and yes, the blind spots that could trip
even the biggest players. So let's get into it. And the first question of this whole torture
going to be, what materially changes when enterprises tokenize real world assets from
operational efficiency to market access and what remains stubbornly long or like stubbornly kind of an
analog uh Brandon what's your opinion on this question yeah no appreciate it I think when you
think about it like broadly speaking right like the private sector can move very very fast and
they have um to adopt this tech but when you get into things involving the public sector, that takes a lot longer,
as we've seen, right? So the benefits you're going to get off the bat are the operational
efficiency, like faster settlement times, increased global access, better demand for
different types of privately owned different types of assets. But really, when it comes down to it,
is we're at the phase where enforcement and sort of regulatory
is still gonna remain off chain
and that's gonna move a lot slower.
Specifically, I think the enforcement's something
that's gonna be very interesting to look at
in the world of stocks,
in the world of other types of commodities
that come on chain, whether it be real estate
or anything else. Right. So
definitely going to get a lot of operational efficiency. But, you know, I think the things
that remain analog to the point of your question is that legal stuff like transfers of title in
real estate or like actual getting voting rights if you own a stock off chain. Like right now,
the stocks on chain are more like digital receipts and representations.
And what does that mean when you go across borders?
What does that mean for the actual regulation
or legal disputes?
All that type of stuff, I think, takes a long time.
So we'll probably be in this hybrid model
for, you know, at least five years, I'd say.
That's just the speed of the public sector,
in my personal opinion.
Got it.
Thank you for the answer here.
You know, I think, Brandon,
you're hit on something
that a lot of people outside the space
don't even realize.
Just putting an asset on chain
doesn't magically turn the whole process
in a sleek, instant, futuristic machine.
Yes, the private sector can spring the head and build the rails but if the public sector um meaning regulators
courts enforcement voters is still moving at slower pace that's like upgrading your car but keeping
the same old true traffic lights uh and operational efficiency is also kind of a big amount and that people expect
because you're not just replacing paper with code you're trying to integrate with decades
old systems compliance work workflows human habits and yeah you're right the analog parts
are surprising surprisingly sticky legal enforcement still happens in courtrooms no
smart contracts here uh the actual
transfer of ownership rights especially of things like property or shares often requires signature
like fillings jurisdictional specific approval so even if you hold a tokenized stock it's often more
like holding a super fast very fancy receipt than the actual ownership certificate so that's not
necessarily bad,
but it does mean the promise of tokenization can be oversold
if people expect the entire life cycle to be digital.
Though, Nicholas or Prof K, what is your opinion on the question?
Let me know if you need me to repeat that.
Well, I think what we'll see here in the next few months even is an emerging realization that when we're talking about tokenized stocks, at least for now, it's exposure to tokenized stocks.
up to the financial system of like maybe the 2010s right like that you would trade like a cfd or
contract for differences instead of like the actual underlying and like that for now is just
how it's going to be i think probably in the early days of like stos slash rwas there there was this
push and pull between the people who really wanted settlement to occur
on chain. And so that meant the asset ownership exists on chain as recognized on chain, which is
probably in an idealistic world where this should land. But as Brandon just mentioned,
it takes a long time for this to sort of filter down to the real world.
And you have multi jurisdictions.
And then you had one jurisdiction, namely the United States, which is just kind of like not making any decisions.
And every other jurisdiction was looking at them to make those decisions so that they could move forward.
And now, like, we have the first sort of thawing of that.
And we used to have a lot of further thawing that needs to occur.
Luckily, we have, you know, publicly traded entities and more and more every day that are going to put this on their budget, and they're going to put lobbying DC and other jurisdictions on the line, you know, on their budget.
And that's going to inform, inform basically the politicians over the next
two decades, and so we should see progress here. But we don't have that progress yet,
so hence we have tokenized exposure, and at least we can build the systems based off this tokenized
exposure for when we actually get, you know, T plus zero settlement happening, like ingrained in the DTCC, for example.
And we have, you know, right to vote like on chain, these kinds of things.
That's going to come, but like there needs, the liquidity markets can build around it now.
That's what's cool.
Right, Profke, right.
I hear you.
I think you nailed something also really important
yeah slow moving um this space can be especially when we're talking about bringing tokenization
from white papers to actual live markets the tech is already here but enterprises and regulators
don't just flip a switch when you tokenize a real world asset like stock or bond, you're not just putting it on a blockchain.
You're reshaping how it's issued, traded and even settled.
That can mean faster transactions, fewer intermediaries and 24-7 market access instead of the old Monday to Friday 9-5 window, of course.
nine to five window of course it also opens the door to like fractional ownership so instead of
It also opens the door to fractional ownership.
needing thousands of dollars to buy into something people could start with much smaller amounts but
here's the catch um what's existing though it's uh that we're starting to see pilot programs or
like small scale launches for tokenized stocks and funds. And they're not mainstream yet, but they give a glimpse of what's possible.
When these early projects prove they can run smoothly and meet the rule,
the bigger players will jump in.
And that's when you'll see or we'll see this operational efficiency really show up.
Instant transfer, automated dividends, and even programmable compliance
built right into the token
still some things will resist resist change i think human trust brain reputation legal framework
behind ownership and yeah i'm to to be honest i'm already my my biggest dream i think that i'm i'm
starting to saying this on every episode i want to torture regulators and have monthly
spaces with them to just uh ask relevant questions about upcoming regulations what we can await but
i'm not sure if it's possible yet but i hope that uh soon we're gonna live in that world so i can
really torture all the regulators and we can look through the progress though let's talk a little bit more about
deeper things i'm interested in your opinion guys how do legal enforceability custody and
counterpart risk evolve in tokenized systems who is ultimately accountable when things go wrong Brandon you can go first yeah sure um I think ultimately like when
it comes down to it blockchains are just a sort of a platform for creating smart contract and
handling execution I think the ultimate legal side of it who comes accountable is the people that is issuing the tokenized RWA, whatever it is, stock, commodity,
what have you, you know, or the platform that that's done on. But when it comes down to it,
the blockchains, I don't think are the ones that go to court for that. It's a decentralized network
on who would go to court, first of all. But yeah, it just provides the sort of the platform to do that so whoever is doing the
issuance when it comes down to any sort of legal dispute whether it be you know someone goes
bankrupt or you're trying to have some sort of you know legal settlement that comes down to just like
it does in the real world the actual issuer the difference is just the venue in which it's being
issued you know and regulators like
having custodians involved that gives them some trust but ultimately personally i'm my
you know from my perspective um yeah it comes down to that that sort of issuer
that's just how i look at it um really i don't think that it like people get wrapped up in the
the whole idea of like once it's's on chain, all this stuff changes.
But just like in any other industry, like legal enforcement and regulatory does come down to the real world, whether it's off chain or on chain.
These aren't things that can just be automatically programmed.
You can't automatically program, you know, a court hearing on chain, if that makes any sense to you guys.
But that's the most sort of tangible way i can look at it and you know we'll see probably you know maybe people try and tackle
that but i think that that's a long ways off yes i do agree with you it's kind of tricky question
but more for the audience as well so we can like discuss here what exactly is uh uh
who's responsible for but yeah i think that that's a very important point for for people to understand
because sometimes the conversation around blockchain makes it sounds like technology
itself it's magically accountable in reality a blockchain is just the infrastructure like road
then the road doesn't take responsibility if a delivery truck loses your package.
The company driving the truck does.
And in token assistance,
the company is the issuer of the assets.
They are the ones who are legally on the hook
if something goes wrong,
whether it's a dispute of ownership,
a missed payout or a breach of terms.
Prof. K., you agree with us? missed payout or a ratio of terms proficate.
You agree with us?
I think you have to push back against that because an issuer of an asset doesn't necessarily have to be the company that's operating it, right?
Like the greatest example that I think we'll see, and this will be a meaningful statistic
in the future, is sort of the premium
or the average premium that the digital asset treasury companies get over the underlying value
of the token that they hold, right? So, you know, in the long run, you have to say, well,
I want to hold this asset, but a lot of these networks are dilutive in nature. So you can't just hold the asset.
You need someone to actually, like, actively manage your stake.
Otherwise, you're going to get diluted.
So there is some premium there.
And probably these guys are going to trade on chain first, because that's where their demand is.
And so then we'll actually be able to compare, like, oh, this Apple's Apple's stock trades like this on the NASDAQ and it trades like this on the sort of
NASDAQ on chain via its tokenized exposure. And if we get enough of those examples that
over the long run, like keep their quote unquote peg, you know, over 24, seven, three 65 markets,
then we'll get more and more assets that'll come and they will actually be
issued. Right.
I think you saw in the Figma IPO that there's a clause in the S one that says
they can actually choose to issue future securities on chain.
And so that's like the meaningful flip, right? So right now, like
all stocks are issued in paper, so to speak, and they need to be cleared by the DTCC, which takes,
you know, I think it used to be two days and now it's one day. But, you know, there's nothing that
says that all assets need to be put into that system in the future.
You know, just like a property deed, if the county decides they're going to record the
deeds on a blockchain going forward, then that's what they're going to do, right?
So that's what you need to do in this industry is sort of come to terms with regulators on
how that's going to be.
I mean, they have like COBOL-based stacks managing their properties in most places in the world,
even if it's computer at all, not paper, right?
So that's going to take a long time
for deeds of properties to move on chain.
It's probably going to take three to five years,
I would say, in the best case scenario
for stocks to move meaningfully on chain. But when they do, I mean, it just,
it really unlocks like all the things that you hear with RWA is about 24,
seven, three 65 liquidity, fractionalization, yada, yada.
But that vision is like not until you get more direct exposure,
like not exposure, you get direct holding of the asset on chain
okay got it so what you're saying and you touched something really also like uh something that trips
people up which is this year uh in tokenized finance isn't always the obvious company behind
the asset interesting in traditional markets if you buy a stock you assume the issue and companies
the one legally tied to it but in token assistance there can be layers like premium asset issuers
who said who are like highly reputable and then a long tail of network issuers who may not have the
same credibility or even direct control or the underlying assets.
Or if it's a tokenized strategy or like exposure based on a bespoke index,
there's a lot of asset issuers that sort of issue based on that basis.
Like they don't hold any underlying at all, but they tokenize the exposure
or they issue some asset against the exposure of their strategy or their index.
So those are still asset issuers, right?
Got it.
Got it.
Yeah.
Well, I didn't think about it that way, to be honest.
I was mainly thinking more like Brandon.
And Brandon, if you have something to add, for example, to, to
Prof K thoughts, feel free to raise a hand or yeah, just unmute yourself. Yeah. No, I, yeah,
I definitely agree with Prof K on that. Um, I think then it comes down to sort of like the
semantics of, are they disparate, are they different assets? And then who's the issuer
of the particular asset? If you comes down to some sort of like actual dispute.
But no, I totally agree. It gets a little bit different when you get into the, you know, looking at different sort of like strategies, right? Like an SBET that becomes definitely
different. So yeah, no, I agree with what he's saying. I think that'll be very interesting to
see how that that's handled um but yeah no no real push
back I think it's a total valid point yeah totally and thank you so much prof K uh for
for that points and Brandon thank you for your additional thoughts here too another thing that
uh prof can mentions that like um it will take time for stocks to be really on chain right and
I think that's something that audience really needs to hear because there is this perception mentions that like um it will take time for stocks to be really on chain right and i think
that's something that audience really needs to hear because there is this perception that
stocks are just a quick technical upgrade away and the reality is putting stocks fully on chain
isn't just about technology it's about rewriting the entire ecosystem that's been built over decades
and today's stock markets are deeply interwired with clearinghouses,
transfer agents, custodians, compliance rules, all which operate in a highly, highly regulated,
very paper-heavy framework, even if some of that paper is now digital. You cannot just drop a
blockchain in the middle and expect everything to instantly
sink and i think that part of uh of the delay comes from legal frameworks that that don't yet
recognize a blockchain record as a definite source of truth for ownership right now for most securities
the official record still sits in a centralized uh registry not on a public ledger and until
lows catch up the blockchain version will more like a mirror of the like real system than the system
itself and then there is a question of like market infrastructure exchanges brokers and custodians
have to integrate with this new rails so on that requires major upgrades
testing regulatory pro oh sorry but anyways i think that i got too far you guys can also like
just uh stop me if i'm talking too much because like my name is speaks so i'm speaking too much
uh but yeah uh anyways i just wanted to like um say do like put some notes on top of your thoughts as well
to dive deeper in the topic.
But again, if I'm speaking too much, you can correct me
if I'm speaking something not right.
But anyways, another question that I wanted to ask you guys.
As tokenization scales, which industry or players are structurally advantaged from your
point of view and who risks this marginalization or this intermediation brendan you can start first
yeah i think um generally what you're gonna to see is like you can look at it
two ways right like the easiest things to tokenize um from either a technical perspective or regular
regulatory perspective we'll move on chain first um and you've seen that with stable coins sort of
leading the charge but i think that like if you look at international markets what's happening
right now is these really high value previously illiquid assets are looking to take advantage of that, especially I think the win
if they already have strong regulatory compliance. That's why if you check the last week,
I cover this in my newsletter, is like carbon credits are becoming really popular. And no one
talks about that in the US per se, along with real estate, which is probably the hardest thing to tokenize in my opinion right now.
But these are really like regulatory strong for the carbon credit side and illiquid high
value assets in the real estate side that across the world, you're seeing a lot of activity
pick up with people looking to do stuff like this.
So I think that those stand to benefit, especially if it's something that sort of hits that happy
medium between, you know, regulatory compliant, high value, previously illiquid, like they
have room to capitalize.
But then looking on like who gets, you know kind of um marginalized i think uh it's just like
you're a pretty from my end like mid-curve take if you will or like basic take but it's like
the middleman right that's kind of like the the basic thing with um the basic one of the basic
advantages of crypto is and blockchain is cutting out the middleman the intermediaries um who handle
the pushing around a
different paper and things of that nature so i think that you know they might not be completely
squeezed out but the competition will definitely heat up with on-chain solutions you know coming
increasingly into into their market they might not be positioned as well to to catch up. Yeah, carbon credits. I'm glad you said that.
It's a very interesting sort of under-realized asset right now.
But, and with our position in the UAE, like we get, you know, lots of offers from these
kind of guys.
So we've had to do the research to figure out why exactly is it undervalued right now?
And what are some of the sort of you know
triggers in the future that might actually kick the market into gear which everyone has been
saying for years it just hasn't happened yet so there is some kind of like eu law that's going to
come into effect i think it's by 2030 there's some target plan or something and the uae is like fully bought into it so they have
these aggressive targets you know for evs and for cutting carbon and stuff like this and there's
lots and lots of companies uh which are behind the curve on this and they're going to have to
sort of you know moving into that deadline they're going to have to buy the carbon credit. So there's this theory out there that,
you know, if you can get enough inventory on chain,
which we're doing,
we have a couple of these deals coming on chain soon.
But if you can get enough of it on chain,
that you can create the market for it
when it actually kicks into gear,
which would be 2028, 2030,
depending on which deadline
and which framework you're talking about
so it's kind of cool yeah i think i saw like just last week they're even coming up with like carbon
credit backed stable coins now which i'm not sure how that'll work but yeah i mean there's a ton
going on in the space i think you know from my perspective it's on crypto twitter going on in the space. I think, you know, from my perspective, it's on crypto Twitter and in the U.S. maybe.
It's just not as talked about, but worldwide, it's definitely heating up.
Yeah, I guess crypto Twitter, or it's now X, has become a little bit more American and a little bit more right-leaning where like this particular issue isn't going to go very viral in that network but yeah
exactly outside of uh america you've got really good um traction in these markets and people are
gearing up for it so you know we have a project demitra that we're working with that are bringing
like carbon stuff on chain and we have a variety of people talking to us in the uae about this
because it's very very uh topical to them well guys i think that you touched the ground of
something really interesting here and powerful points i mean look how technization isn't just
a tech play it's also about kind of positioning for future regulation and demand being for example like mantra you know you're right in the middle of a market that's actively
thinking about sustainability and new economic models and the fact that you're already getting
a lot of inquiries for carbon credits tells me there is a real appetite even before the legal
framework is fully in place that's often how these markets start. The interest builds and
the infrastructure gets tested and then the law catches up. If the UAE moves toward the formal
law by around 2030 for carbon credits and AV-related incentives, you basically got a
countdown clock to be ready. That's an advantage because it gives time to build their own chain
infrastructure, create standards
attract early participants and you're absolutely right guys once there are going to be enough of
these credits on chain uh you can spin up a specialized market that means not just buying
and selling but also real-time trick and automated compliance, transparent verification, and so on and so forth.
It's easy kind of to underestimate how valuable the transparency is here to you. Right now,
the carbon credit board is plugged by questions and I would say double counting,
but putting them on chain, especially in jurisdictions that's serious about regulation could make huge hops for trusted high quality carbon trading
i think it's in many ways it's kind of we're sitting in the in a perfect storm growing interest
regulatory timeline and the ability to design the market from scratch yeah thank you guys for
bringing the name uh listeners if you are also gearing up for CarbonCredit's new trend per se for the next five years, send some reactions here.
And another thing that I also wanted to touch here is a little bit TreadFi topics.
We cannot go without them, of course.
If tokenization is kind of an active tissue between TreadFi and DeFi, what role do you custodians oracles permissioned blockchains play and who really controls the stack?
Brandon?
Yeah, I think that's interesting.
I don't see like one person controlling the stack um i think that it's that
would be kind of the best feature right is some sort of decentralization even at that like meta
level for who's controlling the stack but i think the interesting thing here to focus on like right
custodians we're all very familiar with them they give regulators um some sort of feeling of trust
and safety that there's a trusted third party involved
there in a sense. And the oracles definitely have a critical piece of that with providing
the off-chain data on-chain. They definitely have outsized influence when it comes to that,
but ultimately, they need to maintain their fidelity. I don't think that they can really
necessarily influence a huge amount.
What I think is interesting is the permission chains, right?
Taking a look at how that evolves in the future, right?
And previously, probably in the last three or four years,
permission chains have, or enterprise blockchains have been of significant use
given the regulatory uncertainty and sort of tried by tiptoeing into blockchain rails.
But I think in the future, I only really see permission chains playing a big role
with internal operations or maybe business to business operations, right?
Like banks, internal systems or bank to bank transfers things of that nature I think when it
comes to what we think about more with permissioning on chains you'll start to see native compliance at
the chain level right and something we focus on an objective is the ability to have permissioned
access to a particular say you tokenize a fund right and only the people that are involved in
that fund can trade in and out of it.
The ability to have KYC, AML or whitelisting
and permissioning at the asset level,
as opposed to creating maybe a private subnet
or a completely private blockchain,
like a Providence or a Connexus to handle that.
I think you'll start to see more of the the permissioning happen at the
asset level on public networks right so i think that's really where we're headed and that's kind
of something that's i think more interesting in terms of um the question at hand i hope that
answered it accurately but that's you know when i think about this question i think the future
permission chains uh will evolve significantly
yeah i do i do agree and i like how you broken that down basically because it really um it helps people to see that there are going to be no single player owns tokenization and that's actually one
of its strengths in threadfi you often have clearkeepers, but here it's more of an ecosystem where each role serves a different piece of the puzzle.
Custodians are a great starting point.
They give regulators and institutions that crucial layer of trust, as you said, rather than ensuring that real-world assets behind a token is safe and accounted for.
Without them, the whole bridge between TreadFi and DeFi would feel a lot shakier,
at least for regulators. Oracles, which are fascinating because they're essentially the
translators between the real world and the blockchain world. They pull in outside data
like prices, rates, or even events, triggers, and feed into smart contracts. Permission permission blockchains key keep i would say be very big piece especially
b2b in institutional space um allow they're going to allow for internal operations and private
transactions while still using blockchain's efficiency so yeah that that's exciting prof
k what what's your take on this question and do you have any additional thoughts on what brendan said
take on this question and do you have any additional thoughts on what brendan said
yeah i mean i think the fed came out with a note mid 2024 to the effect that they were looking at
putting permissioned tokens on uh on public blockchains so So that kind of opened up the field to what Injective is doing
and what we're doing, having this sort of blend
of permissionless markets and permissioned markets, right?
So certain collateral is going to be permissioned, right?
Like Brandon said, a fund, right?
We only have 10 people are in this fund.
Say it's like a tokenized real estate vehicle or something.
But maybe the chains or maybe the deeds are on chain
and maybe these guys want to unlock,
you know, it could be millions and millions of dollars
on chain, you know, borrow USDC against them.
Well, how are they going to do that if you know no one
recognizes it right so the that's the standards that are emerging and you have to work with the
regulators to get to those standards because you know there's there's a certain standard in ethereum
i think it's erc 3643 and it was even mentioned, uh, Atkins from the sec's big visionary statement
that came out on July 31st. And he said that, you know, permission tokens like ERC 3626.
I think that's the number I'm not, maybe it's 3643. It's confusing, but he specifically
referenced that token standard and you know that's just
one company's interpretation of like what they think should be the way permission tokens work
and you know it's 80 agreeable and like a lot of people agree on it but there is like a
faction of coders and you know sort of thinkers in this area that are exploring a
different token model, which I think are 7525 or seven.
Anyway, I got to get my numbers right, but it's an interesting sort of debate within
the community.
And this is exactly the kind of thing you would expect now that RegTech or or cefi or whatever you want to call this bringing institutional uh
on chain with defy um this now can all occur out in the open whereas before we were sort of
sculling around like cockroaches be afraid of our own shadows now all of this public discourse can
go to creating better standards better technology and better regulatory frameworks and so you're
just seeing the tip of the iceberg here um and yeah in that kind of environment lots and lots of
blockchains and lots and lots of apps and lots and lots of issuers should thrive
yeah i agree here and i wanted to check actually while we were talking what kind of a standard is
it basically july 20th ssc going to like ssc explored a three-room token standard for compliance
securities it's erc is 3643 um yeah thank you yes three six four three yeah yeah this uh it's always yeah really really
really confusing with all these numbers uh never can remember anything but yes uh to be honest
that's a big signal it really shows how mainstream and the conversation about around tokenization has
become when the fed even starts talking about putting permission tokens on blockchain it tells us this isn't just a defy experiment anymore it's creeping into the core of how traditional finance might
operate in the future and permissioned collateral on chain means they're thinking about a world where
we can still have all the safeguards and oversight regulators need, but with efficiency and speed of a blockchain settlement.
I think kind of like that.
But what's interesting is how permissioned systems can act as stepping stone, giving institutions and governments comfort while still pushing the boundaries of what's possible.
If they can prove that collateral deeds and even complex assets can live securely on chain is a permissioned
uh environment it's only a matter of time before parts of that framework bleed into more open
system and it's not the full decentralization dream but it's big leap forward for adoption
uh Brennan do you have any any thoughts to add to what prof k uh said to the previous question
no no I definitely agree.
I think it's interesting.
I mean, obviously the SEC and people in the administration
are looking towards Ethereum as they are like,
you know, the leaders are the basic,
like, you know, example of a blockchain.
I think Ethereum could do a better job
to replace ERC insert four letter number here.
Like, give me like a name, a tag,
so I can remember it easier.
There's too many of them.
But no, I think that that'll definitely be an area
of friction and discourse.
And hopefully it doesn't run into the situation
where they're not calling in experts on decentralization
to sort of explain this.
And they're trying to make interpretations on their own. I think we need more people from crypto, especially who can explain these
types of things like ERC 463443, whatever it is, I already forget.
3643.
3643, it's a mouthful. But yeah, like bringing in the right people who can put that into terms that are understandable
for Congress to make decisions and the SEC
to be properly informed, given how new this industry is
and how technical it can get.
Hopefully that transpires, but we'll see.
There's been countless examples of that not happening
in other industries.
So hopefully they learned the
lesson. Yeah, it's, it's always cagey when it comes to lobbying, and you can sort of throw your
lot in with the lobbyists, or you can throw your lot in with the technologists. But eventually,
the technologists also realize that they need to be lobbyists too
and so that kind of like it you know you couldn't do that out in the open 12 months ago and now you
can like you'd see sergey of chain link he's there like every week uh as just an example. And as people note and correlate that, oh, Sergi's in DC and oh,
Chainlink price is up 85%. Oh, maybe we should do that too. And it's not bad having him in DC
because he's getting face time with regulators and legislators and explaining to them
why they need the technology. And so you repeat that across a lot of treasuries in crypto
that are now open to spending their money.
You have, look at something like Polkadot or whatever,
has $400 million or whatever.
They can spend that on lobbyists instead of advertising.
And they couldn't before, right?
So that's what I'm looking forward to,
is now we can actually have an honest conversation about this.
The technology is clearly much better than the legacy technology.
There's just so much grift and corruption built up around front-running retail
in the sort of T-plus-two regime.
That's got to get washed away,
and those actors need to like find their
place in the sort of on-chain world um and and that's kind of what's happening here is those
actors that which had been eating at the sort of you know altar of like front-rending retail trades
and and getting a couple of bips risk-free here and there like over and over again because they
built their hft center in new jersey like those days are
over because everyone's going to have access to on-chain trading and they got to sort of set
themselves up in that future infrastructure and then you know their lobbying might will push
people towards the whatever tokens they have like they could probably be ethereum or ripple or
whatever so it's just important that
we have we have this opportunity right now where there is an entrance to interests where we can
all have a nice open dialogue about how this can like better society and let's hope that
hell we don't screw it up like we did the internet before where we ended up with like three or four
companies that owned everything and then somehow made trillions of dollars off the back of our own data, right?
Now we can set up open finance in that way where we have trillions and trillions and
trillions of the network economy that's backed by instead of, you know, four or five companies,
let's go for 100 or 200, right?
At least decentralize the power of the financial
system so that people have a chance like that's basically what we've been trying to do for five
years and we're going to keep doing that for another five years and let's see where we're at
well i think that there's uh definitely a bright path forward. And even that thing that Sergey being in DC,
there's something consistent and at least credible ways
explaining how the plumbing of blockchain,
like what Chainlink does with Oracle,
actually works in practice.
And clearly, markets notice when those regions
to policymakers start forming. Because as you said, that the 55%
jump in chain link isn't just about tech upgrades, it's also about confidence that the project is
getting a seat at the policy table. But again, I hope that one day I'll just talk to these
policymakers on Twitter spaces, so we can discuss what can be done there. But to be honest, I think that we can discuss one last question on air today with you guys.
And this question will be, I'm interested in the world of fractional ownership, synthetic exposure and programmable finance.
exposure and programmable finance how do we redefine real value and what kind of role does
blockchain playing very fine or distorting that reality a little bit long question but i hope
you got me brendan yeah it's a loaded one um but i think what's really interesting is is taking a
look at how quickly these markets take shape and the new value that is created.
Right. I think it was the CEO of Kraken who mentioned maybe earlier this summer on Milk Road podcast that basically tokenizing these real world assets is a Trojan horse effect.
That's the way I definitely look at it. Right. Like once you get basic RWAs on chain, then the real innovation can happen,
right? You already see that in the markets. Take for example, how old are tokenized stocks in the
mainstream, right? They're not even mainstream, they're mainstream crypto Twitter, there's maybe
25,000 holders of X stocks on chain, there's only like 350 million in actual stocks. But already
in the last two, three weeks, you're seeing
a huge amount of platforms launching them as collateral, right? Using your stocks as collateral
on chain. Previously, that's something that was off chain reserved for maybe someone that's very
high net worth. And sort of when you go on these podcasts and learn how to like actual people with
wealth leverage their wealth to get ahead and do certain different things.
They're doing stuff like that.
Now already, I think I saw last week Camino Finance has 1.5 million in X stocks as collateral.
Right. That's just one small example of discovering new value and new use cases just by the basic task of bringing.
and new use cases just by the basic task
of bringing stocks on chain,
even in the sense of just price exposure, right?
Like Prof K was saying,
that's where we're at currently with tokenized stocks.
But you're starting to see new value emerge in that arena.
And you're gonna continue to see more innovation
once you get different types of RWAs on chain
with what they're gonna be able to do. Yeah, it's just about getting them here and then letting all the really talented ambitious
and innovative people who work in this bleeding edge industry this is like really if you are a
builder someone that's you know super excited and trying to do something new um you come here
and you build that here so they're going to be continually doing that. Every new RWA you see on chain,
I think will have a network effect spawning,
probably, you know, 10 to 100 different use cases
of innovation that can happen on chain.
So I think the defining value
will become very interesting going forward.
I don't know precisely what that looks like,
but hopefully it goes in a constructive manner
and we don't end up in the realm of just LP farming
for the rest of time. But I really think with institutions entering a more friendly SEC
and in general White House, you're going to see true innovation in the space.
Long-winded answer, but just you know off the top of my
head when you mention that that's that's where i'm looking awesome awesome i agree with you on many
points and i think it's uh it's great because the more assets assets we tokenize the more
normal it starts to fail for people to think of ownership and digital terms for example if
kraken is more toward offering tokenized u.s stocks to non-us clients that's not just a product launch
it's kind of a signal that fractional ownership and a synthetic exposure are becoming part of
everyday investing i think that's uh not i don't remember exactly was it you of Kraken or just Kraken team but I remember
Cointelegraph was something in May about this this monologue but also another thing meaningful
we need to be clear about what real value is in this new world fractional ownership is still tied to a real underlying
asset but synthetic exposure might only give you the kind of economic outcome without any legal
ownership so programmable finance kind of adds another layer your asset could have built-in
rules or conditions that affect how and when you benefit from it. For everyday investor, it's easy to see all these tokens on a screen
and assume they're all equal when in reality the rights and risks
can be very different.
Prof K, what is your opinion on the question?
Let me know if I need to repeat it.
Well, just continuing on from Brandon's sort of very apt metaphor of like network effects, you know, with each additional type of RWA that gets on chain, that's like that much more LP pairs or like collateral that can be offered up to, you know, that many more protocols.
And there can be a LST of it
if it has some kind of income characteristic.
And the more that that happens,
the more you attract the developers
to access that capital stack.
And so that mantra, we've been sort of laser focused
at bringing on inventory first, right?
So we want to have the inventory on chain and whatever means possible,
whether it be permissioned or permissionless or whatever,
so that when there's a critical mass of those, you know,
then it's a much better argument to your developers. Oh, we have, you know,
a billion or 2 billion or 5 billion or whatever the number is of assets,
which are coming on chain.
And then those asset owners want to tap into your protocol to securely borrow against their assets.
So that's kind of, you know, it can't happen until it's a chicken and egg problem, right?
So you either focus on building the field of dreams or you focus on bringing the players
you got to do one or the other right so as that sort of plays out over the next few years as this
rwa industry just is absolutely going to explode like i don't the numbers that i've seen are crazy
like i think we're less than a trillion now we We're going to go to many, many trillions in the near future.
So, I mean, really, it's just like an experimentation game to find what is the fastest way to market for the PMF that the market's going to, it doesn't even know what it wants, right?
So there just needs to be this Cambrian explosion of attempts, different ways to do tokenized stocks.
Like X stocks is the first example.
They're just first to market i think you know there's going to be lots and lots of attempts at that and like
probably not the first movers are going to win and you know robin hood has to come in and have
their own version right and anyway like just watching that play out it's going to be amazing
and then that's going to go over every single asset class
over the next decade or two should should be super interesting
yeah i think that uh what i want i wanted to add here is just let's uh let's keep building and
let's keep attracting more players in the whole industry here.
Because, yeah, I truly believe that it's going to be amazing.
And this network effects and tokenization aren't just about scale.
It's about creating entirely new kind of combinations of assets, markets, participants that couldn't exist before.
before and once that loop starts spinning fast enough it can pull tokenization from interesting
niche to default way of doing things so much quicker than people expect but on this kind of
a note i think that that's going to be a wrap of our today's cryptic talks our deep dive on the
enterprise reality of token tokenized real world assets from the opportunities that could redefine
corporate finance to the strategic pitfalls that to your fund get overlooked and huge thanks to
our speakers today brilliant minder minds brilliant speakers thank you so much brendan from injective
and prof k or nicholas from mantra for sharing such a candidate and actionable perspectives here.
Guys, if you have some final words that you'd like to share with our audience, feel free to speak up.
Yeah. Brendan.
Yeah. No, thanks everyone for listening, for tuning in.
Definitely check out Injective if you're interested in RWAs.
A huge focus of our chain and particularly trading RWAs, trading with leverage.
I think Injective is about to hit this week or next week, $2 billion in total trading volume for
perpetual RWA trading. So that's just this year. It's just a fraction of what's to come. So check us out.
Nice, and thanks for joining us.
And thanks for hosting us.
At Mantra, we're building DRWAL1 that is focused on United Arab Emirates
and Hong Kong assets.
So come check us out
as we sort of develop uh the future of finance thanks
thank you guys thank you so much if anyone is going to hong kong let's catch up there i'm
going to be there in one week also for a btc asia there's going to be a lot more, some institutional players as well. But anyways, guys, thank you a lot for being, first of all, on this episode.
And dear listeners, if you enjoyed this conversation,
make sure to follow official account of Injective, Mantra,
personal accounts of Brandon, Prof. K, CrypticMine, if you wish.
And share this episode with your fellow friends drop some comments
and yeah we always love to have you here guys and that's gonna be it paolo speaks
signing off for today stay curious stay critical and i'll catch you on the next one thank you guys
have a good rest of the day morning or evening ciao ciao see you guys
