Securitize Just Went Public — Are We Still Tokenizing the World?

**David** (0:02)
Bankless Nation, Securitize just completed its SPAC with Cantor Equity Partners on July 1st, raising $400 million at a $1.25 billion pre-money valuation and began trading on the New York Stock Exchange under ticker SECZ on July 2nd. Carlos, got you back on the podcast. Welcome back. We've had you on the podcast a number of times.
Now it feels like you have crossed a particular line, both a finish line and yet again at another beginning line. Congratulations and welcome back on.

**Carlos Domingo** (0:33)
Thank you. Thanks for having me again.

**David** (0:36)
Is the world tokenized yet?

**Carlos Domingo** (0:38)
It's not the world tokenized yet. We're really far away from tokenizing the world. We are at the very earliest stages of tokenizing. As you know, the assets on chain that are really on chain, it's like around 30, 35 billion dollars.
So, I mean, if you think about the amount of assets that could be tokenized in the hundreds of trillions of dollars, we're still very far away from tokenizing the world, but, you know, things take time, right?

**David** (1:02)
Carlos, last time we had you on the show, we drilled down into what a transfer agent is and a lot of the technicals around Securitize. I want to just like kind of hash that over one more time because I want to know Securitize the business a little bit more in this episode. Now that Securitize is publicly traded on the New York Stock Exchange, talk about like what Securitize is, what's the nature of the business, and how do you guys make money?

**Carlos Domingo** (1:24)
So first and foremost, we are a transfer agent. Now it's very popular to be a transfer agent or to have a transfer agent, but it was not in 2019 when we registered our transfer agent. But a transfer agent is basically an SEC register entity that can actually take securities from an issuer. An issuer could be an asset manager like BlackRock or could be a public trade company like us that has securities for a particular instrument. And then the transfer agent is the entity that basically keeps the record of who holds what and conducts corporate actions, when they split, dividends, etc. And then the main difference of our transfer agent versus a traditional transfer agent is that as they underline ledger technology, where you record the ownership and all the changes of whatever happens with the securities, we use a public blockchain.
And that's the process of tokenization, where you issue a token, which is basically an entry on a ledger, which is a blockchain, that represents this underlying security. Besides that, we are also a broker-dealer and that makes a big difference because we can not only tokenize things and put things on chain, but we can actually trade them. And when we launch our own equity on chain, we actually launch trading of it. So this is another important thing, because tokenization, for the sake of putting things on chain, doesn't change anything. You need to be able to do things with it. So one of the things you want to do, you want to trade them, you want to be able to, you know, pause them as collateral on DeFi, etc. So our whole, you know, tech stack and licenses allows you to do more things beyond the pure tokenization. In terms of how we make money, we make money as a transfer agent, as a service provider. Every company that, you know, uses a transfer agent pays them fees, and those fees are usually based on the, you know, how many securities you manage, etc. And as a broker dealer, we make money with transactions. So when something moves around, you know, we take a very small fee out of it, and that's the other source of monetization that we have.
Also, I think you may have mentioned this on the podcast before, but we also acquire a Fund Admin business, which is now a part of our revenue, because many of the tokenized funds that we put on chain, we also do the Fund Administration business for them, which is another source of revenue. And the reason we wanted to do that is because on chain, as you know, is 24-7, and, you know, instant issuance of securities, instant liquidity, etc. And somebody needs to reconcile that with the underline, which might actually not move 24-7, and that's the role of a Fund Admin. So we realized when we started working with BlackRock that not having that piece of the puzzle, you know, created a lot of friction for us, so we ended up owning that thing. So we basically tree different business within one, the Transfer Agent, Tokenization Platform, the Broker Dealer, and then the Fund Administration.