Ondo Hit $1 BILLION in 8 Months - What Comes Next Is Even Bigger

John Hoffman (0:00)

So at some point, all assets will be on chain. I think this market is over $100 trillion in time as all markets move on chain, all assets move on chain.

John Gillan (0:09)

Ondo just crossed $4 billion in total value locked. It is putting BlackRock portfolio strategies on chain, and Wall Street is coming to crypto in a big way. What does this mean? What does tokenization actually look like? And what do investors need to know about all this? Hello and welcome to Milk Road Crypto, the show that knows that the best time to be bullish is when the market is panicking during a tiny pullback. I'm your host, John Gillan. Today is Thursday, October 15th. We will be releasing this episode tomorrow on the 16th. And today we are joined by managing director and head of product portfolios at Ondo Finance, John Hoffman. Before Ondo, he ran the ETF business in the Americas at Invesco and led distribution at Grayscale. John is an expert on all things Wall Street and crypto. He's gonna share a lot of wisdom with us in this episode, and he's gonna tell us all what's going on at Ondo. If that sounds good to you, make sure you like and subscribe. Share this episode with somebody who's gonna enjoy it. And as a reminder, our podcast today is free, and that would not be possible without our wonderful partners at Nexo, the digital asset platform that lets you trade, earn and borrow all in one place, all from one account. So keep an ear out for more information on them later in the show. But for now, welcome to Milk Road Crypto, John Hoffman. Sir, how are you?

John Hoffman (1:14)

Thanks for having me on today. Long time listener of the program, so it's an honor to be here with you today.

John Gillan (1:20)

Well, I'm a big fan of your work too. I've been following Ondo for a long time.

John, I thought a great place to start the conversation would be with you just introducing yourself a little bit to the audience and telling us about your story. As I said, you spent almost 20 years at Invesco in ETFs, and you were at Grayscale as well, and now you have jumped over from TradFi to Digital Assets. Talk to me a little bit about that transition and what that's been like for you.

John Hoffman (1:43)

Yeah, so I started my career in management consulting. I was actually buying ETFs in my personal account in the early 2000s and thought it was a tremendous technology for delivering investment returns. I joined the ETF industry in the early 2000s when it was a relatively small, unknown category. Spent nearly 20 years working in various capacities on the ETF space, watching it go from kind of a cottage industry to now a mainstream technology. As it relates to crypto and maybe John just setting up Ondo, where I currently lead the product portfolios business, I think that by way of introduction, Ondo is really focused on building the infrastructure to power open, always on global capital markets. And it's really about improving the investment experience for everyone. And so I made the transition to crypto a couple of years ago. When you think about crypto, we're 15 years into this technology and a lot of truly innovative technologies, they take time to ultimately deliver the promise that they set out on the front end. And I think that we're at a point now in crypto where the promise that was originally set out upon is now starting to manifest and Ondo is really leading that charge on the tokenization front.

John Gillan (3:01)

I want to talk about what Ondo is doing on that front.

But I think that the thing that stood out to me about Ondo so far has been the growth. It took Stablecoins, I think, about three years to hit a billion dollars, Ondo hit that with their tokenized stocks in just under eight months. And it seems like there's like a big push towards this across the regulatory backdrop in the SEC and the CFTC, but also across Wall Street. What do you make of the speed at which Wall Street is moving towards tokenization? And talk to me a little bit about that.

John Hoffman (3:28)

Yeah, so to your point, I mean, Stablecoins, I think it was three years to reach a billion in TVL, tokenized treasuries did that in about 18 months.

Ondo stocks, which is the platform that tokenizes US equities and ETFs, reached that milestone in eight months. And so when you zoom out and actually think about where those markets went, Stablecoins are now a $300 billion market. I think there's nearly $9 trillion annually of transaction volume, moving on Stablecoin rails. And so certainly very significant. In terms of the speed of adoption as it relates to tokenized equities, I think there's kind of two factors there. One is we're talking about a global borderless technology, right? Anyone with an internet connection and a wallet can access this. And so when you think of the addressable market, really it's 8 billion people, which is different than how traditional finance has been built, which is very much driven by local markets, local regulation. This is a global borderless technology, more akin to the internet versus kind of like the traditional individual library market, if you will. The second element I think is really around demographics, right? You look at the demographics globally, and just here in the US, $85 trillion is going to transition from gen X, gen Y, gen Z over the next seven to 10 years. And those generations that are inheriting that capital, they've already started to inherit that capital, are more digitally native. I know my kids can move around an iPad and a remote control or anything a lot faster than I can. A lot of these folks grew up with this technology, attached to their high chair. And so they trust the technology. They understand the technology.