The $700T blueprint, with Robert Leshner, Co-Founder and CEO of Superstate

0:00 The stock market is about to move on chain. This doesn't mean synthetic wrappers, it doesn't mean derivatives. It's about actual SEC-registered shares that you would find on Nasdaq.

0:11 2025, in a lot of ways, like the firing gun that set off the tokenization race. A year ago, if you asked them, like, "Are people gonna tokenize equities?" Every single one of them would've said, like, "Huh? No."

0:21 If you ask those same institutions today, 100% of them say, "This is the future. It's inevitable." What's the gap that you're closing in the market?

0:28 What we, like, needed and what we need is the $700 trillion of stuff, of wealth, of assets, of ownership to make its way on chain. And like, if that happens, the upper bound of DeFi is like $700 trillion.

0:40 [laughs] Welcome to another episode of 51 Insights. Today with Robert Leshner. Robert, welcome to the show. Thanks for having me. Robert is the co-founder and chief executive officer of Superstate.

0:58 Superstate is one of the leading tokenization platforms. We'll talk about this later, uh, in much more detail. But the stock market is about to move on chain.

1:10 This doesn't mean synthetic wrappers, it doesn't mean derivatives. It's about actual SEC-registered shares that you would find on Nasdaq.

1:18 And Robert, you first built Compound into one of the largest DeFi protocols in history, then you walked away to build the infrastructure layer for, uh, exactly this.

1:29 And in this conversation we're gonna dive into your Invesco deal that you just recently announced, and why companies' public shares are already being posted as a collateral on the Solana lending protocol, and many, many more details on Superstate.

1:44 So, uh, welcome to the show. Super excited for this discussion. Yeah, excited to dive in.

1:49 Robert, back in 2023 when you left Compound, you went on the record saying institutions aren't coming to DeFi to trade, they're coming to put their assets onto blockchain rails.

2:00 Three years in, how do you grade that call? Pretty good. I'm gonna go with pretty good.

2:05 Um, you know, right now, you know, three years later, we're starting to see a lot of examples of people being engaged in the security tokenization life cycle, whether they're issuers, whether they're people, you know, purchasing the assets, whether they're intermediaries that are supporting different types of activity.

2:24 You know, we're starting to see a lot of tokenized security.

2:26 My original comment three years ago is like, the institutions aren't coming, and I think I said it in the context of they're not coming to, like, buy your protocol tokens and crypto tokens.

2:34 They're not coming for crypto-native assets, they're coming for the off-chain assets on chain. And I, I think that's playing out pretty well.

2:41 I mean, like, not to, you know, kick anything while it's down but, like, you know, the crypto market right now has s- been struggling, right? The institutions are not, like, coming in droves to buy everybody's L1 tokens.

2:52 They're not buying their protocol tokens, you know. There's been a lot less of that than I think people have hoped for. So I'm gonna give my comment pretty good accuracy rating. Let's go with a B-plus or A-minus.

3:05 Yeah, that's a- actually really interesting, and I agree with you. Investors didn't come for the actual tokens. They, they came for either the underlying infrastructure, the application layer.

3:15 Right now, if you look at the market, it's definitely not for the tokens. Right. But it's really happening. The institutions are coming here. You know, they are starting to use blockchains. Like, and it's amazing.

3:23 Can you give us the elevator pitch of Superstate? What, what's the gap that you're closing in the market? Yeah. The gap that we're closing is simple.

3:30 You know, there's a lot of securities, whether it's stocks or bonds or other things that, you know, exist in f- finance that aren't currently on blockchains, that exist in spreadsheets and databases and paper contracts, and all of these other things, and they're just not tokens yet, right?

3:47 And from the perspective of a DeFi founder, right, I was like, the ceiling for DeFi is too low if all we have are crypto-native tokens [laughs] of other crypto projects. The upper bounds can only get so big.

3:58 What we, like, needed and what we need is the $700 trillion of stuff, of wealth, of assets, of ownership to make its way on chain. And like, if that happens, the upper bound of DeFi is, like, $700 trillion, right?

4:10 [laughs] If that doesn't happen, the upper bound of DeFi is, like, the same as it was in, you know, 2019 roughly. And so the pitch for Superstate is really simple.

4:20 You know, we're trying to make it easy for those assets to move on chain. Under the hood, it's complex. There's a lot of financial plumbing. There's a lot of policy and regulatory and legal work.

4:31 There's a lot of operational work. There's a lot of technology work. You know, there's a lot of things that, like, have to happen for something as simple as saying, "We took a stock and we put it on a blockchain."

4:41 There's a lot of moving parts, but we're at the point now where we take the stock and we put it on the blockchain. We take the fund, we put it on the blockchain, and it works.

4:48 What does that actually mean when you say, "We put a stock on the blockchain"? And because there are a lot of problems that need to be solved with that, right?

4:55 And just having, like, a tokenized wrapper is not enough, right? That, that's right. There's a lot of problems that need to be solved, and there's a lot of different approaches to solving those problems.

5:05 So, you know, the approach that Superstate uses is that, you know, we partner with a public company. We do this as the public company's transfer agent.

5:15 A transfer agent is this, you know, type of entity that records who owns the shares of a security. And in doing this, we basically say, you know, we're keeping track of the issuer shares.

5:27 We're keeping track of them in databases. We're keeping track of them in ways that can, you know, move inside the DTC and continue to trade in brokerage accounts and on traditional exchanges like the Nasdaq and NYSE.

5:40 We're doing it in ways where you can do all of that, but the shares, the official shares of a company can be recorded as tokens on a blockchain. And, you know, this is a record-keeping difference, right?

5:51 This is not a, you know, functional difference of different economics, different rights, different characteristics.

6:00 What we're doing at the end of the day is we're saying the share that a company issues Can do all the things it's used to doing, but can also now be extensible to interact with DeFi protocols, on-chain investors, and new systems entirely.

6:15 And so, you know, when you really boil it down, what we're doing is we're saying there's a new option for how shares can live. And this is a really clean option, right?

6:24 What it means is that, like, the token on the blockchain is the same share of a company as the one that's trading on the Nasdaq, and you can actually bridge shares back and forth between those two systems.

6:33 You can take a share in your brokerage account, and you can move it into token form on Solana or Ethereum, and you can take a token on Solana or Ethereum and move it into a brokerage account.

6:42 It's a really cool two-way bridge. There's other approaches out there, right?

6:46 Like, the easiest way to make a token on a blockchain is like, "Hey, this is not gonna be the company's official share, but we'll buy some shares, and we'll hold them in an account, and we'll issue a claim against those shares that we as, like, a startup or we as a third party hold."

7:02 That's the most popular alternative, right? There's advantages to that. I like that approach for how quickly you can spin it up. There's disadvantages. It's a slightly different asset.

7:12 It's not the same as, like, the company's official shares are just recorded in a token.

7:16 And so I think what we're starting to see, you know, early on in this tokenization life cycle is there's gonna be different approaches. I think there's gonna be a market for many of them.

7:25 I think you can have a situation where there's a company's official shares, and there's also, like, wrapper tokens that people have made.

7:32 You know, a lot of the wrapper tokens are, in some ways, you know, interesting because they're being issued offshore, and they're not being issued to US investors, and they're permissionless, and they're freely transferable.

7:42 And there's all these things that official shares are not, right? Official shares, you know, can feel a little bit burdensome.

7:48 It's like you have to be KYC'd, and you have to, you know, be on the company's books and records and, like, all of these things.

7:55 There's a lot of different experimentation that's happening, and I think it's gonna bear fruit in multiple different ways.

8:00 And if you compare Superstate to some of the other tokenization players, uh, like Securitize or, or Ondo, um, do you differ in how you approach the tokenization part?

8:13 Tokenization, when you look at, like, the process of, like, creating a token, is actually one of the things that's gonna be similar in multiple different approaches, right?

8:20 So, you know, at the end of the day, whether you're, you know, Circle, who's, like, minting and burning USDC, whether you're Superstate, who's, like, minting and burning, you know, a security token, whether you are, you know, a crypto project with a crypto native token that has, like, an adjustable or elastic number of tokens and, like, there's a process to create and, like, destroy those tokens.

8:40 At the end of the day, you know, you have, in general, like, an internet and blockchain-connected computer or server or wallet or, you know, process to make tokens and to destroy tokens against some, like, source of truth.

8:57 Like, how many should there be? Why should there be that many, [chuckles] right? Run the processes to, like, create on-chain transactions to make and destroy tokens, right? That mechanically is not that different.

9:07 Like, this is also one of these things that's, like, been, like, you know, tested for... we're coming on, like, 10 years now, [chuckles] right, of, like, making and destroying tokens.

9:17 The difference and what makes tokenization tokenization is that that's really synchronized to something else, right?

9:23 It's, like, synchronized to how many shares of the company exist or, you know, how do we, you know, increment the number of shares on a blockchain when we decrement the number of shares held in an off-chain system or in the DTC or somewhere else, right?

9:36 Tokenization, making tokens, you know, is not new. Using it for securities at scale is relatively new.

9:46 And when you look back over this three, four-year history now with Superstate, what are some things that you are looking back on and you think, "This was, like, exponentially harder than we thought it would be," and some things that were much, much easier?

10:03 You know, when I founded Superstate two and a half years ago, frankly, you know, at that time, you know, it was a very different, you know, US regulatory structure.

10:12 So I founded Superstate, you know, in hard, hard, hard mode, which was founding a company in the US to tokenize US securities in the Gary Gensler SEC era, right?

10:24 When they didn't want to allow anything through the front door. And part of this was saying like, "Hey, we just wanna be there early before the door opens," right?

10:32 [chuckles] 'Cause, like, whether it was a coin flip or what. Like, you know, I knew at some point things had to change for the better. And so, you know, that was extremely risky.

10:40 You know, when we started out, we were like, "Hey, we're gonna stick to tokenizing a money market fund," the simplest, least controversial product, right?

10:49 That, like, it doesn't matter how wicked the SEC is, like, you can't argue against a tokenized T-bill [chuckles] at the end of the day, right? Like, it's, it's such a low-risk, safe, and useful product.

11:01 Um, and so, you know, I didn't know when the door would open, so to speak, right? I-- it, it could've been 2028, frankly, right?

11:10 It could've been at some point in the future that wasn't, you know, honestly, like, early 2025. But 2025 was, in a lot of ways, like the firing gun that set off the tokenization race, right?

11:23 Up until that point, we were able to start proving things out, you know, and building a lot of infrastructure. But, you know, the thing that has surprised me is that, like, equity tokenization has accelerated from

11:33 actually zero. Like, I, I mean, like a cold start. I mean, there was zero activity [chuckles] on the tokenization of equities, you know, prior to, like,

11:42 early 2025 to it just being a flat-out race, um, to figure out how to tokenize equities, to put it into practice, to go through the legal side, the technical side, the issuer side. Like, all of these nuances.

11:57 The game, you know, really began out of nowhere suddenly. Um, and that, that was surprising.

12:03 And, like, what I'm surprised at a-as well is just how far, not just Superstate, but the industry as a whole has come in basically 12 months, you know? It's, it's actually incredible.

12:15 And, you know, I'm not just speaking for startups, I'm also speaking for, like, you know, traditional institutions too. Like, a year ago, if you asked them, like, "Are people gonna tokenize equities?"

12:25 Every single one of them would've said, like, "Huh? No." Like, [laughs] if you ask those same institutions today, 100% of them say, "This is the future.

12:32 It's inevitable, and we are trying to make, you know, our organization a big part of it." You mentioned that a tokenization race started in 2025.

12:41 When you talk to big corps about tokenization today, and I would assume, like, pretty much every major bank in the US has realized that this is a thing they need to look at, right? How are these conversations going?

12:54 Do people understand this concept? I don't have to preach to the choir, right? Like, at this point, I think most institutions in financial markets understand the advantages.

13:05 Do they understand, like, the nuanced details of, like, why the token is better and how it works, and how a DeFi protocol works, and how it can be transferred as collateral? No.

13:15 Sometimes they don't know all of the details, but they know that fundamentally there's a big market here, right? There's, at this point, about $300 billion of, like, investment/stablecoin assets on-chain looking for,

13:29 you know, homes, right? [laughs] Um, there's demand. Like, it's not like starting from zero. There's hundreds of billions of dollars of demand right now.

13:37 You know, so they get that, and they get that there's new use cases. Like, they can see tokenized securities being used as collateral in a DeFi protocol to borrow against.

13:45 They can see it being, you know, sent around to, like, you know, centralized intermediaries in token form as collateral. They see it flying to, like, crypto prime brokers and, like, trading desks.

13:57 You know, they can see tokenized securities, you know, work in different ways that have never functioned in historical markets. Like, just something as simple as transferring shares between two parties is just

14:10 clunky [laughs] in traditional markets, right? But transferring it between two wallets, it's trivial. It's, like, one click, you know? And so people can start to see that there's, you know, significant benefits here.

14:23 They're gonna understand those benefits more, and more, and more every single quarter, you know. But a lot of these organizations work in quarters. They don't work in weeks like, you know, startups do.

14:33 And where are we right now on this tokenization race, and, and where do you think this is going? And what will be, like, the biggest unlocks in the next couple of years? Yeah.

14:43 You know, I'll, I'll use a sports analogy, even though I'm not, you know, that good at sports analogies. Um, I, I really think of this as, like, the bottom of the second inning, right, in a baseball game.

14:53 Like, it's a long game. Like, the score, whatever is on the board right now, it doesn't really matter.

14:58 You know, everyone's just getting warmed up and getting a feel for all of this stuff, and the game's gonna be decided a little bit out.

15:06 But every single inning counts, and every at bat counts, and every single day counts, and every single action we take counts, right? I think it's too early to judge who's winning and losing.

15:15 You know, I think there's a lot of incredible progress that's been made. There's a lot of great experiments so far. There's a lot of, like, great traction. There's a lot of great products, but it's just so early.

15:24 And, like, the reason I say that is just, you know, there's $300 billion of, like, potential market right now, like, on chain.

15:31 I think eventually we get to the point where there's 700 trillion of potential market where everything is on-chain. The, like, the whole thing, right? And

15:41 that's, you know, it's like 2000x our current market potential in a lot of ways.

15:46 And that's when things get big, and, like, that's when every institution is fighting for it, and that's when the numbers get big, and the revenue gets big, and the,

15:54 you know, the success and failure outcomes, you know, change everyone's careers. Definitely agree, and, and I also think, like, most of the major players are obviously thinking about that.

16:05 And, uh, we also had some major announcements, I think it was in 2026 already, with New York Stock Exchange and NASDAQ wanting to tokenize shares. So the ship is already moving.

16:17 It's just a, a question of when the dam is gonna break, right? Everyone wants to, right? NASDAQ wants to, New York Stock Exchange wants to, Coinbase wants to, Kraken wants to, Binance wants to. I mean, like,

16:29 everybody that has an order book wants to be trading tokenized securities, period. [laughs] Right? Like, how could you not, right? Like, how could you not want your order book to include tokenized securities, right?

16:40 If you're a traditional stock venue like NYSE or NASDAQ, you want tokenized securities because instead of, like, T plus one and these, like, giant batch settlements at the end of the day that are done through DTC and all this complexity, it can just be, like,

16:53 ongoing in real-time constant settlement. Like, that's an incredible upgrade.

16:57 And if you're a new world venue, like, if you're a crypto exchange, like a Coinbase, a Kraken, a Binance, whatever, you know, it's a new opportunity for you.

17:04 Like, you don't have to look at, like, just, like, the two and a half trillion of crypto as, like, what you can trade. You can look at the 700 trillion of, like, everything that you could trade, and that's compelling.

17:15 That's really compelling. And a quick note before we continue. Proof of Talk is back, June 2nd and 3rd at the Louvre Palace in Paris.

17:24 2,500 digital asset leaders, 85% decision-makers, 18 trillion in asset under management in one room. Sold out two years running. I'll be there personally, and 51 Insights is the official research partner this year.

17:39 If you care about the institutional side of digital assets, this is the room you want to be in. ProofofTalk.io, link in the show notes. All right, let's get back to it. All right. So let's jump into the Invesco deal.

17:51 That's a deal that you announced or a partnership that you announced two days ago. Can you walk us through what that actually means, uh, for Superstate? Absolutely.

18:01 It, you know, in a lot of ways, there's two announcements that we've made with them over the past couple weeks. Uh, they're not cause and effect, but they're, you know, intertwined in some ways.

18:10 But what we announced is that, you know, we are going to be making Invesco the first, you know, incumbent asset manager- With a product on the Superstate platform.

18:20 In conjunction, they are also, um, investing in Superstate or have invested in Superstate. Um, this is exciting. So when we built Superstate, you know, again, this is... You know, we go back to like, you know, mid-2023.

18:32 It was the Gary Gensler era. You know, nothing exciting was being allowed through the gates.

18:36 If we went and pitched Invesco on, like, launching a tokenized fund with Superstate, we probably would've been laughed out of the room, or it would've taken a long time to work through all the different meetings we would have to work through, right?

18:49 Um, so what we did as a platform is we said, "We're gonna launch our own products."

18:52 You know, we're gonna launch our own tokenization technology, you know, our own products, like a Superstate T-bill fund is gonna be, like, the first asset we tokenize.

19:00 A Superstate, you know, basis high-yield fund is gonna be the next product we tokenize. You know, we, we started off by building our own products as an asset manager to, like, live on the Superstate tokenization engine.

19:14 And so Invesco's our first opportunity to shift from being like, hey, it's Superstate proprietary products that we made and we're tokenizing to,

19:22 okay, this whole time we've been able to work with third-party asset managers and, like, tokenize their products. The game has shifted.

19:29 And so for us, you know, what we're doing is we're actually starting this off and we're accelerating it by, you know, converting Superstate USTB, which is our, you know, money market fund, into Invesco USTB.

19:40 It goes from being Superstate's name on the product to Invesco's name on the product. Instead of we being the asset manager, they're the asset manager.

19:49 But what doesn't change is that it's running on Superstate's tokenization technology platform. And what we're swapping is it's our own products for someone else's products. And so, you know, it's exciting.

20:03 Um, I think, you know, we're gonna use this to prove how tokenization works for one of Wall Street's largest asset managers.

20:11 I, you know, don't have any alpha to leak, but I can imagine that, you know, it facilitates us launching more products together at some point, I hope.

20:20 Um, and you know, hopefully it demonstrates for other asset managers as well that, you know, tokenization can work even for the largest incumbent asset managers.

20:31 You know, I, I hope this is in a lot of ways a watershed moment. You know, there's a lot of interest from asset managers to come on chain, and this is us finally opening our platform to those asset managers.

20:41 Can you also help us understand a little bit the size of these funds and these deals compared to the whole Superstate platform? The size is significant.

20:50 So you know, we currently have two funds on the platform, USTB, our money market fund, and USCC, a higher yield basis product.

20:59 USTB is about $850 million of AUM, so that's what's gonna go from being a Superstate product to becoming an Invesco product. But that's like the right way to like, you know, bootstrap their product.

21:08 They get to start with a tokenized security at $850 million. Um, and so for us it is significant. For them it's significant. We're not talking about, you know, tiny products. We're talking about products that are

21:20 at the billion-dollar tier. Um, you know, USTB fluctuates around a billion dollars. Um, it's a real product. And so, you know, I'm really excited by the fact that, you know, we can

21:32 make this an Invesco product and, you know, have a third-party asset manager on a daily basis, every single day, you know, having a product operating on the Superstate tokenization engine.

21:45 And can you unpack for us right now, so those funds are tokenized, what does this unlock right now?

21:52 It actually unlocks a lot, and I think people don't notice how many things that it unlocks, um, 'cause they just see like, oh, it's tokenized, so you know, that means I can hold it in my wallet?

22:02 Yes, you can hold it in your wallet. If you're a crypto native investor, if you're a hedge fund or a venture fund operating in the space, you can hold it in the same wallet that you hold your other crypto assets, right?

22:12 You can hold it in the same, you know, custodian that holds your Bitcoin or your Ether, right? Like, that's cool. Like, you know. But that's just, like, the first difference, right? There's a lot of differences between,

22:23 you know, a traditional product and a tokenized one. And I'll start with describing our money market fund, USTB, because you know, it's easiest to understand an off-chain T-bill versus an on-chain one.

22:33 So an off-chain T-bill, you know, you earn roughly the, you know, Fed funds rate minus some costs, and that's it.

22:41 Like, the on-chain version of that, that same thing happens, but instead of that interest accruing by the day or by the week, right, it actually accrues in real time. Why? Because the product's built on

22:53 blockchains and a very modern back end, and blockchains don't work by the day, right? Legacy financial products work by the business day. Nothing on a blockchain operates in business days.

23:02 In fact, most blockchains don't even have the concepts to be able to support that.

23:07 And so with USTB, this, you know, tokenized money market fund, interest actually is calculated and accrued, you know, in real time or by the block. It's powerful, it's cool, right? Does it change

23:19 your economics if you hold it for a year on either side? No, not at all. It doesn't. Like, you earn the same interest whether you held it, you know, in crypto form or traditional form.

23:28 But what enables is you to do intra-day transactions without either party to it, you know, losing interest or gaining interest, um, outside of what's expected.

23:38 So what it enables is, you know, me and you to transfer this token between us at like either 2:00 AM or 9:00 AM or 4:15 PM, or you know, 7:22 and 19 seconds PM, right? And the interest is calculated perfectly.

23:55 Um, and it facilitates intra-day movements. You know, that's the first major change. Um, the second major change is because of that, you can use it as collateral really efficiently.

24:05 Um, we've seen USTB and tokenized products being used with, you know, institutional counterparties.

24:10 Like if I'm doing a derivatives trade, I could use it as collateral, and instead of posting a stablecoin to it, I could post tokenized T-bills. Um, we've seen it being used as collateral in DeFi protocols.

24:20 You know- Aave Horizon on Ethereum, Camino on Solana. These are, like, the two biggest ones that we've seen adoption in.

24:28 But there's people using it to borrow stablecoins of multiple different denominations, um, on a moment's notice, you know.

24:33 That's literally, like, supply to the protocol, take stablecoins out, go about my way without selling it. That collateral use case, especially 'cause you can move it around intraday, is, like, really powerful.

24:44 Um, you know, in addition to that, like, we've seen, you know, embedded programmability. So, you know, if I wanted to build my business around some off-chain security today, it's really hard.

24:55 But if you wanna build a DeFi protocol or product on top of a tokenized security with, like, real time mint and burn, it's actually doable.

25:04 And so there's a number of DeFi projects that have, like, been building on top of USTB as just this programmable yield building block, and that's something that you can't do with off-chain securities.

25:16 I mean, like, you know, the business contracts that you'd have to write alone would take you, like, months, right? Let alone, like, the implementation.

25:24 Like, none of the systems off-chain in traditional are, like, even set up for programmability. But when it's tokenized, all of that changes. Like, you ha- you literally have, like, DeFi teams,

25:34 you know, just building this into their own products as, like, a source of yield. And, like, that programmability just doesn't exist in traditional ana- analogs. And those are, like, the m- most important use cases.

25:46 You know, the last piece of it is just there's different investor approach, right?

25:48 It's like if you are a crypto native, like, hedge fund, let's say, you know, knowing that you can, like, enter and exit this intraday, you might actually use it, you know, as part of your, like, traded workflows.

26:00 You're like, "Okay, if I sell Bitcoin, sell it at the stablecoins and then instantly convert it into USTB."

26:06 And when I wanna buy Bitcoin again, like, after the trade closes, it's like, okay, well, convert the USTB back to stablecoins and, you know, use it to fund my purchase. But

26:18 all that's facilitated by the fact that it's on-chain and it's real-time. That's super exciting. I mean, all of these use cases are more a revolution than an evolution actually for trading in stocks.

26:29 And if you look at the DeFi part specifically, where do you think we are in terms of actual institutional traders operating on DeFi and using that stuff versus crypto native single users who are just experimenting right now?

26:48 I mean, it's clearly, like, we're starting to see a lot of institutional use, right? So Super State, you know, almost our entire user base for USTB and USTC are institutions. It's a very institutional crowd.

26:58 Um, and the reason is because these are structured as private funds today. You know, they're not ETFs, they're not things that, like, everybody has access to. You know, they're still only for, you know, institutions.

27:10 Um, and so, like, not a single retail user of these. You know, we're past the billion dollar mark, and there's not a single retail. Um, that's cool, right?

27:19 So I could say at least with our products, it's all institutional. Like, what types of institutions? I mean, it varies, right?

27:24 Some of it's, like, crypto hedge funds, some of it's, you know, a venture fund, some of it's, you know, an offshore foundation operating a protocol that builds on top of it, right? Um, it's a variety of different

27:37 types of institutional investors, but they're all institutional in terms of their definition. And so that's what we see in our products.

27:45 You know, do we see institutions, like, trading these in, like, DEXs and things like that? Not really. Not yet.

27:52 Do we see those same, you know, customers, you know, interacting with, like, other types of ac- DeFi protocols and systems and activities? Like, a little bit, you know.

28:00 Like, maybe, you know, not Super State products, but, like, we see those same folks because they're, you know, early adopters of things generally. They're, they're using new products.

28:09 But all of this is growing every single year. And so,

28:14 you know, I, I think if you ask the same question again in a year, the answer's gonna be like, "Yeah, well, there's even more use cases that are starting to really scale."

28:21 Robert, one of the products that you also released recently is, uh, the opening-- You call it Opening Bell. It's pretty simple. It says, "Go public on-chain." [laughs] That's the idea.

28:32 Can you just unpack that for us a little bit? What does this mean, and why did you launch this? So Opening Bell is our, you know, stock and, you know, equity tokenization platform.

28:42 So, you know, we've built up the technology to tokenize both funds and equities. There are differences under the hood, like the way that, you know, an equity works is very different than the way a fund works.

28:51 A fund has subscriptions, and it has redemptions, and the number of shares goes up and down every day, you know. An equity is complex in different ways, right?

29:00 It, you know, you can't easily buy it and sell it or create and destroy it. You're like, there's a generally a fixed number of shares, and those shares have dividends. They have corporate governance and proxies.

29:15 They have stock splits. They have all these things that, like, funds don't have, right? So they're, they're similar but different, and so there are two different approaches to tokenizing securities.

29:23 But with Opening Bell, this is what we use to tokenize equities, and we work with public companies. Um, we are not working with private companies yet.

29:30 This is just for public companies that are registered and, you know, are publicly traded or able to be publicly traded. And so

29:39 Opening Bell right now, all of the issuers that we're working with are generally, like, NASDAQ-traded companies. This is our approach to tokenize their shares so their shares can be tokens on a blockchain.

29:51 They're on Solana and Ethereum. They can move around on Solana and Ethereum. They can be collateral on Solana and Ethereum.

29:57 If there's corporate governance, you know, things, if there's dividends, if there's stock splits, all of that's, you know, handled within, you know, the tokenization processes.

30:06 And it's public company shares as a token in a wallet, and it, it works. It's phenomenal. Um, you know, we're going to be expanding that into capital formation.

30:16 And so there's a little bit of a double entendre of, like, go public, you know, on-chain, which is like you're taking public companies and you're putting on, them on-chain.

30:23 But also, you know, we expect that public companies are going to be able to incrementally raise capital on-chain. Um- We haven't seen too much of this yet just because,

30:34 you know, we haven't seen too many public companies in general become tokens.

30:37 [chuckles] Um, but the biggest advantage, to go all the way back to our conversation of, like, what's the difference between native issuer-led tokenization, which is our approach, and like a wrapper where someone goes out and buys shares of a company, the biggest difference is in capital formation, in that when it's the company's official shares, they can sell them to raise money, um, to fund the business, to grow the business, to add a warehouse, to add a data center, to add a marketing campaign, whatever.

31:04 This is gonna be the year where we start to demonstrate and test how public companies can raise capital using tokens.

31:12 And to play the devil's advocate here, like, if someone told you, "Yeah, we already saw this, like, 10 years ago with ICOs," what, what's the difference between ICOs 10 years ago and what you can do today on Superstate?

31:24 Yeah, absolutely. It's a great question. So with an ICO it was, "Hey, I'm gonna make, you know, a token," right? Which is not, like, a registered security. It's just a token, right?

31:34 "And I'm gonna sell that token to the public, and you're gonna give me the proceeds, and I'm gonna try to start a crypto project with it," right? Two differences.

31:42 One is, like, it's not, like, a security, and it's generally as early-stage as it gets. ICOs were mostly at the very outset of a project where there was nothing there, right?

31:53 Public companies tokenizing their shares and raising capital is kind of the opposite in both ways. So the first opposite is that this is, these are public companies.

32:01 These are companies that are already trading on the NASDAQ and the New York Stock Exchange. They're registered companies. They do quarterly financials. They're audited. They do all their 10-Qs, right?

32:12 These are, like, the big boy companies, right? They're registered. And they're not early-stage.

32:18 These are, like, companies that have already gone through the slog of, like, delivering something to the point where they are public companies, right? And so in two ways they're kind of the opposite of ICOs.

32:29 One is, like, they're registered securities, they're not, like, crypto tokens, and two is that they're late-stage versus early-stage. Both of those, major differences. And so think of this as, like,

32:42 the stock market coming on-chain, but in, like, primary capital. Most of the trading that happens is secondary. The shares already exist.

32:48 You're just trading them, you know, back and forth between a bunch of different people.

32:52 Bringing primary capital formation on-chain, a little bit out of the hands of the inv- the investment banks and into the hands of blockchain users. Yeah, that's great.

33:00 Yeah, yeah, I just wanted to make sure that distinction is super, super clear. So Opening Bell, very interesting product.

33:05 I think one of the most interesting case studies you did with Forward Industries and Kamino, and that integration that you did, so super interesting.

33:17 Think that's really like a public company's SEC-registered shares posted as a collateral on a Solana lending protocol, correct? It's really cool.

33:27 I mean, you know, at this point, you know, I, I haven't checked in a few days or weeks, so I, my numbers could be a little bit off, but, like, about 8% of the company is tokenized, um, of a whole public company, right?

33:40 This is, like, Solana's largest treasury company. You know, almost 10% of the company shares are tokenized on, you know, through Superstate. That's really powerful, right? Just to think, like,

33:55 you know, the magnitude and the impact of a company. Like if, you know, 8% of, like, Amazon were tokenized on a blockchain, people would be like, "Oh my God," like, "the blockchain is, like, the future," you know?

34:06 The entire thing is being used in this productive way.

34:10 You know, a very significant portion of, like, the forward cap table is tokenized through Superstate, and from there it's being used as, you know, collateral in Kamino

34:20 and as collateral through, you know, other arrangements, you know, not necessarily using DeFi protocols.

34:26 It's remarkable, and I think it's ac- actually the first, like, major example of a significant portion of a company's shares being used productively on-chain.

34:37 All right, so, uh, Robert, I also wanna talk a little bit about regulation. S- We have the CLARITY Act that's still stalled in, in Congress.

34:45 We have Chair Atkins, uh, with the Project Crypto actively working on a tokenization framework. We have Commissioner Peirce, crypto task force that is writing a token taxonomy.

34:57 What rule change, what legislations are you looking forward to with most suspense because it would unlock, uh, the Superstate business model even more? Absolutely. So, you know, I have two hats.

35:09 One is the, I've been a member of the crypto world for a long time. As a person, I am most looking forward to the CLARITY Act.

35:16 As Superstate, I am most looking forward to some of the things coming out of the SEC in relation to Project Crypto. And, like, what do I mean by this?

35:24 So the CLARITY Act defines, especially for the hundreds of thousands of tokens that have been made over the last, you know, decade-plus,

35:36 when are they securities, when are they not securities, you know, what's the difference? And what that's going to do is it's going to give, you know, a lot of comfort to institutions

35:48 entering trading, entering custody, entering brokerage, you know, that want to interact with crypto assets, right? Not tokenized securities, but, like, crypto assets.

35:57 It's going to be the thing that I think gives every single incumbent comfort moving into this market, and there's gonna be a lot more competition for crypto trading and custody and settlement and, like,

36:09 creating new products, and that's a good thing. But, like, it's gonna be, like, the green light for everyone to go into crypto crypto, right? It doesn't really change tokenization much.

36:19 Then there's a lot of the work that the SEC is doing on, you know, Project Crypto or an innovation exemption.

36:25 There's a few different phrases for this, and nobody really knows exactly what they're going to entail, entail. What the structure's going to look like, you know, what's gonna be included, what's not gonna be included.

36:36 We're all sort of like waiting with bated breath.

36:39 But the one thing that I feel pretty confident about, because it's been said publicly so many times, is that, you know, Project Crypto and the innovation exemptions are really gonna be around, you know, tokenized securities.

36:50 And, you know, what happens, not with the, you know, crypto native non-security tokens that are, are talked about in Clarity, but what happens with, like, the stocks and the bonds and the real estate and, like, all the things that people wanna bring on chain.

37:02 What are the rules for it? Because right now there's a huge amount of rules around how securities work. The SEC's job, for the most part, you know, in its existing role,

37:15 is to dictate how securities work, right, and exchange. How does that apply to blockchain, right? That, that's the part that, like, hasn't really been written or hasn't really been figured out yet, right?

37:25 There's so many...

37:26 There's, like, 100 years almost of figuring out the rules for how a stock trades on an exchange, right, and the brokers that interact with it and what you can do and how you market it, and all of these different things.

37:40 Bring that on chain, a lot of... There's a lot of square peg, round hole things, right?

37:44 There's a lot of, like, you know, arcane things that, like, aren't even possible because it's on a blockchain or are now possible on a blockchain and deprecates a lot of the rules that were created because these incredible technologies never existed.

37:57 And so Project Crypto, I think, is gonna have the biggest impact on tokenized securities, their role in the world.

38:04 It's, I think, gonna take a lot more energy and time to figure out the things because tokenized securities have only been a conversation, like, in society for about a year now, right?

38:14 But we've had over 10 years of people saying like, "What's a security? What's not a security? When is it? When is it not? How does this work? Is it legal? Is it legal?" [laughs] Right? Um,

38:25 so I think we're much earlier in the tokenization conversations from a policy perspective, but that's gonna have a huge impact on how Superstate grows, how the market grows, and it's gonna shape the future.

38:38 Robert, you're the man in the arena. You're building the actual infrastructure, the stuff people use.

38:45 If there's one message you could give to corporate leaders, executives thinking about these solutions, trying to figure out how they can start tokenizing stuff and actually building a business out of that, what would that message be?

38:59 Yeah, my message is, you know, blockchain and crypto are incredibly good tools for assets, right?

39:07 Like, fundamentally, like, the magic innovation of Bitcoin was instead of everybody having their own spreadsheet and view of who owns what, we finally, for the first time, had a shared transparent ledger of who owns what.

39:20 And Bitcoin proved that it was an incredible way to record assets, like, point blank. And no one should be afraid of that ledger technology to record assets. It works at scale. It's robust. It is incredibly sound. It is

39:37 very hardened and resilient, and it's a much better way of recording who owns things than the spreadsheets and databases that are scattered everywhere in traditional markets. Robert, a great ending.

39:48 Thank you so much for coming on the show. We're already at time. Where can people learn more about you, about Superstate?

39:54 Yeah, superstate.com if you wanna learn about Superstate, and you can follow me on Twitter at rleshner. Robert, I wish you all the best, uh, with Superstate, and, uh, talk soon. Appreciate it.

40:03 Thanks for having me on the show. You obviously liked this video enough that you got to the end. Listen, do me a favor. Hit that like and subscribe button because I think you'll like it.

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