Seth Ginns & Anthony Pecore: Why Liquid Assets Win The Tokenization Super Cycle (Full Breakdown)

Seth Ginns (0:00)

Institutions aren't that excited about investing in meme coins. They're excited about investing in real businesses early in their life cycle, in a new secular growth industry.

Robbie Klages (0:10)

My name's Robby, and you're watching The Rollup. And today, I'm asking you to please subscribe, comment, like and support our channel. We interview some of the best and brightest minds in digital assets, digital finance and tokenization. We are doing this for you. So please sit back, relax, enjoy the show. And thank you so much for all your support. And we're back October 7th, DAS Asia. And we're live with the Franklin Crypto team. Excited to chat with Anthony and Seth today.

We're going to talk key themes. What you guys have seen in the market, maybe some war stories of Franklin Crypto's experience in the industry. I think the main takeaway, if you just look around the room, I mean, the institutions are here, and you guys have led the way since, I mean, since you guys have gotten started, you've pioneered a lot of the work that institutions have now looked to as they've entered the space. And so welcome to the show. It's a pleasure to have you guys.

Maybe we can just start with what you guys are focused on. What is the most exciting aspect of what you see in the digital assets today and where you're spending the most time? Seth and maybe we'll get to Tony.

Seth Ginns (1:20)

Yeah, I mean, look, I think the most exciting thing for us right now is that the fact that we're seeing broader and broader sets of institutional allocators show interest in the space. Where we're seeing on the liquid market side, we're seeing really good revenue growth. We're seeing value capture in tokens, reasonable multiples, and that resonates. That looks like equities, which is really exciting. People want fundamental opportunities. Institutions aren't that excited about investing in meme coins. They're excited about investing in real businesses early in their life cycle in a new secular growth industry.

And that's really coming together as an investible theme right now. So we're seeing that resonate, which is really exciting.

Anthony Pecore (2:06)

Yeah.

Robbie Klages (2:06)

And we like to say we're in the midst of this tokenization super cycle, just fueling a lot of that growth. Tony, what are you most excited about these days?

Anthony Pecore (2:14)

Well, we're sort of going back to basics.

So Franklin is famous for Benji. So the tokenized money market fund.

Robbie Klages (2:24)

Yep.

Anthony Pecore (2:24)

Very simple concept. We made our name. It's really fun for Franklin Templeton, nearly 80-year-old company to have street cred and crypto. And it was through what started off as an experiment in tokenizing a money market fund. That fund has been live and working flawlessly since 2021

Institutions are now starting to see that as good collateral for all sorts of interesting things. And all of this is going to be settled and traded on the blockchain, lots of different protocols. But it's that sort of behavior which is driving usage, which is driving KPIs, which then turn into revenue, which didn't turn into investible assets back into the liquid token space.

Robbie Klages (3:16)

Yeah. And that is ultimately where I think we're headed, right? This tokenization super cycle. I was at CYBOS last week and there was some talk from some of these digital asset teams within these bigger institutions around, oh, we're on a tokenization path to nowhere. And now I think they're starting to realize that this is ultimately making the entire financial world more capital efficient, more productive, more programmable, and it's unlocking tons of idle capital.

And so this this tokenization super cycle, it starts with getting these things tokenized, but it doesn't stop there. Then they flow into a lot of the protocols, a lot of the on-chain applications and re-rate those TVLs, re-rate those AUMs and that entire addressable market so much higher. And that's what I think we've seen in the market as of recently is that, hey, a lot of the same lending facilities, these exchanges, these things are not just for crypto-native assets, they are for assets, they're for financial assets in general, and this is so much larger of an addressable market and it's growing the pie in general.

The question that always comes back to is, who are going to be the biggest beneficiaries? There's going to be winners and losers who are onsides and offsides. Who do you guys think are going to be the biggest winners of the tokenization super cycle?

Anthony Pecore (4:34)

Well, I'll just say the watchword always is, who's going to capture the value? So there's clearly value being created by this technology. Who's going to capture it? Seth, who's going to capture it?