All of six weeks ago, you know, retail was looking at like opening up brokerage accounts to trade international stocks. And that was the thing that like everyone on crypto Twitter was talking about, right? Now, how do we trade equities or equity-like things on chain? I don't think in 30 years we're going to have users saying, I have like a thousand choices.
Either they're not going to make any decisions and agents are going to handle everything for them or it's all going to be consolidated into one, you know, under the hood. Like if you actually look at like the US equity market structure in the trad sense, you have actually you have tons of exchanges, right? When you click the order on your brokerage account, yeah, it routes to all these exchanges, but they're like exchanges in name. They're all like microscopically different. No one really cares.
Vlad said RWA is on one side, memes on the other side, but it really does seem like it's the latter that...
Yeah, it's the memeification of equity.
Why not put your money to work?
The crypto tape is provided for informational purposes only and is not intended as investment advice, a recommendation, or an offer to buy or sell any financial instrument or digital asset. The views and opinions expressed by speakers are their own and do not necessarily reflect the views of GSR. Discussions may include forward-looking statements which are subject to risk and uncertainties. All investments involve risk and past performance is not indicative of future results. Listeners should conduct their own research and consult with professional advisors before making any investment decision. Guests featured on the podcast may be clients, partners, or affiliated with entities in which GSR or its clients have an interest.
Ladies and gentlemen, thanks for tuning in to the Crypto Tape. I'm your host, Frank Chaparo, head of strategic communications at GSR, and I'm joined here at RWA Summit with Robert Leshner, CEO of Superstate. So pleased to be here in studio in this penthouse suite. It's very, you know, it's very comfortable.
It's comfortable. Yeah. Yeah. It's familiar.
It's very familiar. I feel like, you know, we could be at one of our homes. Um, okay. Let's get right, let's just get into it. Did you see the video that we put out recently on how tokenization's everyone's favorite word?
You got like a special moment in that.
I hit the RT button on that one. So, in that, you had a special feature where you were the only person that didn't say the word tokenization. You talked about, or we captured the moment in the last time you came on the show where you said I was surprised that this would be the zeitgeist of this market moment. So, you know, if we think back to the first time you came on, I think it was February, how much has changed?
A lot has changed. A lot of things have launched. A lot of things have started to get some traction. There's a lot more actual product in market versus, you know, all of 6 months ago.
And how is sort of like institutional finance wrapped their heads around what's happening, right? I would say they've been able to wrap their heads around it less because most of the activity has really taken off over the past couple weeks and months has really been things that...
are I would say more retail native and crypto native. Um, you know, in the last 6 months we've seen a lot of equity perpification which is not exactly tokenization but that has really started to scale and we've seen, we'll call it equity tokenization shitcoinization.
Mhm. Um, on Robin Hood chain and elsewhere. And so the things that are starting to really take off and build actual user adoption are not the things that institutions would have expected. It doesn't look institutional. It looks anti-institutional.
Yeah, it does. And you know, you kind of see that in Robin Hood chain coming to market, right? Vlad said RWA's on one side, memes on the other side, but it really does seem like it's the latter that...
Yeah. That's the memeification of equity.
Mhm. And so where does Superstate fit in? You know, how does it sort of help drive folks more towards the former?
Yeah. I mean, we're in some ways like a cousin of what's happening, like we're not even siblings. Um, and we're focused on different parts of the capital market structure in the stack. So right now a lot of the tokenization that's occurring, it's occurring at the brokerage layer, right? Where what's being tokenized are brokerage balances, right? So the equities, you know, that a lot of people are creating, it's not tokenizing company shares, it's tokenizing brokerage balances. And we're seeing it paired with like unbacked tokens. There's a lot of things happening out there right now where it's not even tokenization. It's like, hey, I'm just calling something a stock token and we'll push that to the side.
But where we're focused at Superstate is on, you know, the primary issuance, the primary instrument, and tokenizing that security, not creating a tokenized new security. Um, not creating something that doesn't already exist, but taking something that does exist, a specific QEP, a company's public shares, and tokenizing that specific instrument, really modernizing it and digitizing it and using a blockchain to record who owns it instead of using the spreadsheets, the really bad software, the PDFs, the paper contracts in filing cabinets, and all the things that currently comprise the records of a company's stock.
Can it, one thing that we were talking about or I've heard discussed at this event is permission versus permissionless. Can tokenized stocks actually be permissionless when you're dealing with institutions? When you're dealing with issuers, what do they want?
Yeah. I mean, what's happening right now in the space that's starting to scale is really detached from issuers, right? It's like multiple steps detached from issuers, right? And so like most of them don't even know what's like...
Like does the CFO of Coca-Cola know what's going on?
No. Does the CFO of HIMS know what's going on? [laughter]
Someone made a boner coin that was a derivative of HIMS and it was a fiasco. Um, do they even know? Maybe in that specific example someone like...
Yeah, because it hit the news, you know, but generally they're so far detached from, so far removed from it that has nothing to do with the company. It doesn't like actually change the way people interact with the company's stock. It doesn't provide capital to the company. It doesn't affectuate an actual trade of the company's underlying shares. Like a lot of it's so far removed that they can just sort of like chuckle and...
Yeah, move on with their day.
Move on with their day and observe what's happening out there.
That makes sense. And do you see that changing?
Well, eventually, right? So you know, in our mind the Superstate model is that eventually issuers are the ones who are involved in tokenization, right? Where they're saying, hey, I want to tokenize the security that we have issued as a company for distribution, our stock, our bonds, our preferred, our whatever, right? Tokenizing the sort of like primary issuance as opposed to something that's, you know, a few steps back as a derivative. Um, in that world, you know, it saves the company costs, it allows the company to have a much closer relationship with the holders of the security. It enables way better information for everybody involved. It speeds things up, you know, all of these things. And as we get to like upgrading the way, you know, primary issuance works, upgrading the way that securities are recorded, you know, there's going to be tons of issuer benefits. What's happening here is kind of like retail benefits, end user, end investor benefits to people that are creating in what is essentially markets removed from the actual underlying security.
So let's walk through the different models and, you know, one question that I have is, is this zero sum? Can they all exist in the future of global equity markets? Issuer-led one category, you can sort of describe another category as maybe synthetic, and then a custodial model like a Dinari or something of that sort. Um, is there room for everyone to sort of play in the market structure?
