In this must-watch conversation, Robert Leshner, CEO and co-founder of SuperState and creator of the DeFi protocol Compound, shares his bold vision for how tokenized securities could reshape global markets and rock the financial world. Hosted by Chris Perkins, President of CoinFund, this insightful interview dives into:
- Why tokenization will reduce costs, increase transparency, and enable instant settlement (T+0)
- SuperState’s Opening Bell program to bring public company stocks on-chain
- How crypto-native investors are driving a new era of capital markets
- Why direct listings on blockchains could challenge traditional IPOs
- The SEC’s evolving framework for tokenized assets, and why Robert is optimistic
- The rise of Digital Asset Treasuries (DATs) as a workaround to offer crypto exposure through public equities
Whether you’re in TradFi, DeFi, or Web3, this is a front-row seat to the future of finance.
FREE access to our 15 Rick Rule Symposium Interviews by signing up for our Accredited Investor List here: https://wealthion.com/accredited/
Want a free portfolio review with one of Wealthion’s endorsed financial advisors? Visit: https://bit.ly/45bCUx8
Robert Leshner 0:02
Tokens are just a fundamentally more efficient way to report ownership. Eventually, all of the stocks and bonds and currencies and commodities in real estate and all of the wealth in the world would find its way onto blockchain. Hello,
Christopher Perkins 0:22
ladies, and gentlemen, and welcome back. I am thrilled today to be with my friend Robert leshner, who is the founder of superstate. Robert, welcome
Robert Leshner 0:33
Chris. Excited to be on the show with you.
Christopher Perkins 0:36
Yeah, thanks. So you know you had a really amazing career. I want you to unpack it. But from my perspective, we’re dealing with a guy who was one of the first and foremost pioneers of what we call defi, decentralized finance. He was one of the founders of compound, which was really one of the first borrow lens in defi, where anyone with an Internet connection could go on and start borrowing, lending. And then he did something crazy, and in the middle of a massive regulatory onslaught, he rocked up and said, Hey guys, I’m going to start a regulated asset manager. And of course, we were quick to jump and become investors. So Robert, why don’t you that’s my perspective of your background. Can you just tell us a little bit about your background in your own words?
Robert Leshner 1:19
Yeah, absolutely. So I started my career in traditional financial markets, you know, call it Wall Street, and I was there for a few years before becoming a software entrepreneur, moving out to California, working in Silicon Valley, you know, founding a couple of companies. And in 2017 you know, I became completely enamored with crypto, I was, you know, enamored by the fact that you could program financial assets, which is something, you know, earlier in my career, I thought would have been impossible. But really blockchains made for the first time, the idea that you could create something that was global in scale, that was completely transparent and was incredibly efficient to manage billions or trillions of dollars of financial assets. And, you know, I became obsessed with the idea of, what can you do with smart contracts on a blockchain? I found that compound, it’s one of the first defi protocols. At the time, there wasn’t a phrase defi. It’s an umbrella term that was invented in the years since to describe computer programs running on blockchains that manage money. And you know, compound is a system to borrow and lend crypto assets. And you know, at its peak, there was about, you know, 20 billion plus of assets being borrowed and lent in compound. And today there’s a couple billion. And it’s basically, you know, been a successful project that’s grown since 2018 when it was first
Christopher Perkins 2:52
deployed. Great. And so then along the way, you’re killing it at compound, killing it, Oh, well. And then you’re like, wait a second, I’m going to become the leader of a new company that’s going to be an asset manager and regulated. What made you pivot
Robert Leshner 3:05
like that? But when I first started compound, you know, I was going up and down Sand Hill Road in California, pitching all the venture capital funds. And what I told all of them at the time was that, you know, and this is 2017 2018 for context, I was telling all of them that eventually, all of the stocks and bonds and currencies and commodities and real estate and all of the wealth in the world would find its way onto blockchains, and that instead of being recorded in spreadsheets and paper contracts and databases run by Different companies and across hundreds or 1000s of different ledgers or record keeping systems, eventually, all of those assets would become tokens on a blockchain, and that when they did move over, because, you know, there’s so many innate advantages for assets to be recorded on a blockchain, namely, speed, transparency, cost, like global reach, programmability, like all these things, like I said, once all these assets are here, you know, the tool that I’m building will be able to interact with them, and we’ll have, you know, really efficient global borrow, lend markets for every security, for every asset, etc. And this is the pitch I had in 2017 and you know, from that point all the way up to 2023 the types of assets that were issued on blockchains never really grew up, and it never really evolved. You know, I joined the space when there was a lot of ICOs. People were making crypto native tokens for projects that only existed in crypto. And, you know, 2017 that was the case. It was also the case in 2018 by 2019, we stopped calling them ICOs, but all of the new tokens were primarily for crypto projects that only had you know their economics recorded as a token on a blockchain. 20, 22,021 2022 23 The only thing that really you know came about. It was entirely net new with stable coins. And stable coins are an incredible example of an asset that’s value is derived not on a blockchain, but being recorded as a token on a blockchain so that it can become extremely efficient and programmable. And outside of stable coins was really no assets that found their way on the watching a very simple dollar put into an account and tokenized. You know, was incredibly successful. You know, stable coins are 200 billion now, like over the course of 2017 to 2023 when I left compound to start super they’d grown to about 100 billion. Stable coins are a massive success. But I kept on asking myself the question, why haven’t we seen other assets? Why have we only seen stable coins make the leap from off chain to on chain? And along the way, there was a lot of different experiments and ideas and pilot programs. There was a number of banks that would like from a pilot program that tokenized like a bond or a piece of commercial paper. There was always like esoteric real estate projects, you know, where some developer was extremely passionate about crypto and, you know, would try to tokenize, you know, ownership in real estate development, there was always a couple experiments along the way, but, like nothing, even came close to reaching critical mass outside of stable coins. And so, given my experience in defi, given my experience long before that, in traditional financial markets, I decided that I would bite off the extremely audacious and challenging task of helping to migrate assets from off chain to on chain, assets that are currently in a form factor of spreadsheets, paper contracts, legal agreements, databases, multiple different record keeping systems, and converting that into token form on a blockchain, where they can interact with defi protocols, where they can interact with a global audience, where they can be programmable and where they have advantages over the traditional ways of reporting assets.
Mario Rodríguez 6:53
Many of our interviews delve into investments you can only achieve by being an accredited investor. By signing up to our accredited investor list through the link in the description below, you’ll get all 15 full length interviews from the symposium for free, plus our free reports on investing in rare earths, uranium and copper, some of the hottest metals right now.
Christopher Perkins 7:17
Can you you know a lot of the listeners, I think, are trying to under, get their heads around these tokens. You know that that you just discussed, and you know from you and I, we’re like, okay, it’s a new wrapper. I can take these tokens and anyone with access to an internet can, can essentially buy those tokens, and they can put private property into the internet for the first time, right? That’s really the crux of it. And now you also can, now, you know, you talk about stable coins like we just had the genius bill that got passed. That got passed, right? And our own Secretary of the Treasury is saying it’s 3.7 trillion are coming on in the next couple of years. And your thesis is like, okay, that makes sense. But gosh, there’s an entire world of other assets that can be tokenized as well. When you think through the benefits you talked about programmability, you talked about defi but if I’m just an investor, right, and a retail guy, maybe I’m accredited and I’m and what does this give me? Like, why am I going to be, like, at least stable coins. Man, I could pay, I could pay stable coins. Maybe my personal thesis is that stable coins are going to be mostly used for for store value in the developing world. Like, hey, I’m going to keep this thing. I want to have dollars. I’m going to use defi. I’m going to generate yield. But like, what is the true value? Like, why do why do we care about tokens, particularly for non US, dollar, you know, all these other assets that you’re tokenizing,
Robert Leshner 8:29
yeah, at the end of the day, you know, tokens are a just a fundamentally more efficient way to record ownership. And what I mean by that is, you know, the way assets work today is like, whenever you change the ownership of an asset, there’s a huge amount of back office and settlement and clearing and complexities that happen behind the scenes every time an assets trade. So if you go into your brokerage account and buy a share of stock, you know, it generally looks like, you know, you click the button and it’s done. But behind that, there’s days of work, right? And there’s a very complex system when you change the ownership of a token, you know, as soon as the button has been clicked, so to speak, it’s done, it’s settled, it’s final, it’s t plus zero seconds, instead of, you know, t plus one day, or, in some cases, t plus multiple days. And so what this leads to, long term is a cheaper financial system with lower costs across everything we do, lower trading costs, lower settlement costs, you know, it, you know, we’ll cut down on, you know, fees companies will be more profitable. You know, across the board, you know, you basically get rid of, you know, huge numbers of processes by recording something that’s open for that’s just on the cost side. Then there’s the portability side. If you wanted to send a share of stock to your cousin, you know, from your brokerage account to theirs, it’s really hard, right? It’s extremely. Ordinarily difficult, but with the token, you know, it’s incredibly freely transferable, right? I can move a token to anyone with a crypto wallet, and when I do, the ownership changes, if I were to send, you know, Chris, a tokenized share of stock, the second that I do, it’s no longer mine, and the share of stock is Chris’s, and that’s it. It’s all I have to know is his address. You know, I don’t have to navigate, you know, the complexities of, you know, how my broker system talks to Chris’s broker system. And so there’s a huge upgrade to portability. You know, what will this look like in practice when you know securities are tokenized at scale? It’s hard to say exactly how people take advantage of this, but the portability of them, you know, goes through the roof. Next is transparency. You know, when an asset is tokenized, everybody, everywhere can see in real time how many shares exist. You know, where the ownership is concentrated, how it works. You know, how the ownership is changing. You know, a level of transparency and depth to the market that’s just not available today in financial markets. You know, if you log into your brokerage account, you know, and you try to look up how many shares of stock exist for a company, that number is out of date. You know, it could be months out of date, right? And the information that you’re relying on to make decisions is inaccurate and hard to come by, versus with tokens, every single transaction has ever occurred is visible. Any analyst can piece together everything they need to know, and any system or brokerage account or trading system on top can piece together everything possible that it can now, and so there’s a level of transparency that’s going to bring huge amounts of benefits to investors. And lastly, it’s the global nature of it. You know, right now, every single country has its own financial systems, its own infrastructure, its own ways of transferring money, you know, between and across borders, and crypto is a sort of unifying standard that spans geographies and actually makes it so that an asset can operate, you know, simultaneously in the US and the UK and Japan and wherever, on a common, sort of like technological standard and so, you know, we’re yet to see how this plays out when we start to have tokenized securities at scale. But I think it’s going to lead to some really exciting financial innovations.
Christopher Perkins 12:26
Yeah, you mentioned programmability too. I think another killer use case is collateral. And it goes back to your compound experience, right? You can essentially borrow or lend and say, if certain conditions meet x, then you’re going to get a certain yield. And like that whole programmability piece, I think, is just not well understood and incredibly exciting as you start thinking about how to really optimize the value of your assets. Yeah,
Robert Leshner 12:51
absolutely. And I think these things combined in certain ways, right? So the transferability combined with programmability is really exciting. So, like a hedge fund, could set up a system, you know, with their prime broker, where as the second that they get margin called, you know, they transfer new securities, you know, or collateral to the prime broker, or exact opposite, you know, when they have an excess of margin, you know, the securities are automatically swept back to the hedge fund and their wallet and custodian. And so it enables you to build way more capital efficient workflows. And the benefit of that is just going to be long term, you know, higher returns for everybody,
Christopher Perkins 13:29
100% tell us about superstate. So you have this company now. I’m familiar with it because we are very proud investors, but tell us what you’re working on, you know, some of your flagship products and what you’re and some of the initiatives that you know, make us both more excited.
Robert Leshner 13:43
Yeah, so super state is in the business of working with security issuers to tokenize their securities and bring them on chain. So if a company has, you know, a share of stock that’s registered and it trades on the NASDAQ, you know, we can work with them to tokenize it so that it can also trade on a blockchain as well. And you know, we’ve piloted this with, you know, two different funds that were the issuer of a T bill fund and a high yield fund, and we brought them on chain. And over the last year, there’s been, you know, billions of dollars of transactions in these products. And you know, they’ve gotten to experience, you know, the life cycle of a tokenized asset. They’ve been used as collateral, they’ve been programmed, they’ve been exchanged between investors. They’ve been, you know, like, used in really novel and interesting ways. And we’re now starting to work with public companies for tokenizing equity in the same way. And in the coming weeks and months, you know, we expect that, you know, a number of different issuers are going to go live with tokenized versions of their stocks, and will begin to trade in addition to in traditional venues, and will begin to trade on a blockchain as well. And you know, this is incredibly exciting, because we’re going to see issuers having more capital market access. New venues for, you know, an asset that already exists, their stock. And, you know, underneath the hood, there’s a lot of technology, you know, and there’s a lot of, you know, legal and regulatory work that we’ve done to make this extremely complex process incredibly simple for an issuer. But the end result. If it is, you know, an asset doesn’t have to live just on the NASDAQ. It can live on the NASDAQ and on a blockchain as well.
Christopher Perkins 15:26
That’s pretty amazing. I can’t wait to talk a little bit more about the public equity use case, but I want to actually start with private equity. And if you look at the stats, 81% of companies in the United States that make over $100 million are private and that’s very frustrating if you’re just an ordinary person, because you really can’t if you’re not accredited, you can’t access private equity the rich guys get richer or whatever. Noticed recently that Robinhood tokenized some that they took some open AI private equity, they put an SPV around it, and they started tokenizing it. And I think a lot of they received a lot of criticism, first by OpenAI, because they really didn’t coordinate with them. And then people are like, Well, wait a second, there are tokens on the SPV, not the underlying equity. And I think that’s some fair criticism, but at the same time, it got me really excited, because it seems like this is a breakthrough, where, for the very first time, you may be able to use this wrapper, provided that the SEC gives us some relief, and you can take that token and you can potentially make it very liquid to ordinary people. How do you think about before we get into the public equity side of things? How do you think about the private equity side of things? Do you think that’s an opportunity as well for investors going forward, buying that token in private equity?
Robert Leshner 16:44
Yeah, it’s really interesting, because at the end of the day, you know, it’s really up to issuers when and how their stock trades, right? Issuers have a tremendous amount of control over who owns their stock when they’re private. You know, companies, especially tech companies, that are staying private for longer, demonstrate incredible control over how many shareholders they have and when they’re required to register their stock with the SEC for it to begin trading, and when they start making disclosures about exactly how their business is doing. Companies try to stay private on purpose, because private capital markets are generally friendlier than public capital markets that measure them on a quarterly basis. And so, you know, companies want control over that decision. When do I go public? When do I reveal all the gritty details of my business? When do I, you know, file the registration statements? And when do we, you know, begin trading, and you know, they don’t like being forced to go public because the number of shareholders has increased to the point that they’re required to register. And so, you know, it’s really interesting to see how this will play out. I think a lot of private companies will not want, you know, a third party to dictate how and when their stock stocks are straight like, you know, if you’re an issuer, it sounds crazy. I think some companies in the private markets will be extremely happy and overjoyed for there to be more access to their stock while they’re private, you know, especially if it’s amongst accredited investors, or they’re able to stay exempt from registration. I think there’ll be a number of issuers that are very excited about this, and I think there’s going to be a lot of companies that don’t know what’s going on, but fundamentally, I think this will work when issuers are involved in the process and are making the decisions, and it will not work when a third party, without the support and coordination of a private company, tries to tokenize. And so I think we’re going to see a lot of different experiments in terms of the approach that people use to tokenize private vehicles and private companies. I think many of these experiments will fail, and I think we’ll as a society, learn a lot from what works and why and what doesn’t work and why. But I think fundamentally, where issuers make the decision to tokenize their stock and will be successful, and where issuers are not in the driver’s seat and someone else outside their own company is making that decision, I think it’s going to be, for the most part, unsuccessful.
Christopher Perkins 19:10
I think you’re right. I think at the end of the day, some of these private companies, as they’re marching towards going public, are going to probably partner with a guy like you and say, Listen, we’re going to tokenize a small amount of private equity. We’re going to we’re going to we’re going to work with the SEC around, some rules around it, or maybe we do it overseas. We’re going to make that private equity liquid. And that’s one thing a tokenization can do. It can try to attempt to make illiquid assets liquid. There’s been some failures, there maybe some successes, and then it’s almost like a bellwether. It’s like, okay, we’re testing the markets to see how they’re responding. Because I really want to IPO behind this, and I think that’s part. That’s probably what we’re going to see in the medium term. Which brings me to opening bell. Can you walk us through, you know what that program is, where you know why you developed it, and how what you’re doing with it?
Robert Leshner 19:56
Yeah, so opening bell is a program for sec. See registered companies, companies that are going through the process of registering your stock already, that are making disclosures that are enabling the public at large to own their stock their security. We’re working with those issuers, companies that have already done the hard work of going public, not ones that are staying private. And eventually we’ll get to those. We’ll come back to this. But we’re working with public companies to tokenize their stock, and the process of this is relatively straightforward. We’re an SEC registered transfer agent. We work with a company in partnership to be a record keeper of their stock, and we record ownership of their stock in token formal blockchain. You know, stock can be recorded in a variety of ways. It can be recorded with paper certificates. It can be uncertificated. It can be in book entry. It can be held, you know, in nominee form. It can be held in street name. There’s like all these different ways that stock can be recorded and held. You know, as a transfer agent, we just add one tool to that toolkit, which is, it can be held, you know, as tokens on a blockchain, as the means of recording, similarly to how, you know, a lot of shareholders used to hold physical stock certificates in, you know, in their house or in their filing cabinet, or, you know, at their office. And so we work with companies when they’re ready for their stock to be public, to also be recorded on chain when it does. You know, we can work with the issuer to, you know, approve certain on chain venues for it to trade. You know, an issuer might say, Oh, I love the idea of this trading in a decentralized exchange, a computer program that lets people swap tokens, you know, let’s have a trade there. Or they could say, Hey, I’d love for it to trade, you know, OTC, you know, such that, like a market making firm, can quote it to anyone of their clients. You know, we can make that happen as well. Once it’s in a token form, the choices that are available to issuers for how we can additionally trade on blockchain, you know, just completely open up. And so opening bells, the process of tokenizing shares of public companies in a new capital market for them to bring in a new class of investors. You know, we see a lot of new demand coming from crypto native investors, people that only want to hold shares if they’re instantly convertible back to crypto. You know, because their business is primarily buying Bitcoin and crypto assets, etc. You know, they can’t tolerate the days of back and forth that it takes to move capital from traditional markets to crypto markets to traditional markets and back again. And so there’s a lot of people that would buy stock if it was using the systems that they already use for crypto. So, you know, opening bell for us is when it debuts on a blockchain. In the same way you know that stock debuts on the nicey or the NASDAQ or the London Stock Exchange. You know, we believe it’ll, you know, debut on blockchains as well, and eventually we’re going to work with, you know, earlier stage issuers, maybe they’ll go public for the first time on a blockchain and then eventually get uplifted to the NASDAQ or the nicey. But we’re starting with companies that are already public, you know, significantly more mature businesses that have already done all of the steps, but they might have gone public long time ago. They might be going public very soon, but once they’re public companies
Christopher Perkins 23:11
tokenizing their stock. Got it so. You know, the way that I understand things is that there’s really three ways to go public in United States. One is via traditional IPO, where you use investment bankers to set a price, and you go to a centralized exchange. I think that market was around $30 billion last year, which actually has been going down. If you look at the last 20 years, it’s down like about 5% accounting for inflation. 20 and 21 were weird. It was, it was covid and just just but if you account for that, yet, the public markets aren’t doing so great, particularly traditional IPOs. Traditional IPOs. You can go public via SPAC, where you take company public, you do an acquisition, or you can go public via direct listing. And I’ve been really focused on this. It feels like that is the best. I think there’s only, like, $300 million raised last year, but the superpower of tokens is, like, that instant. It’s really capital formation, right? I think about the the Trump token, right? Trump Trump token. He launched a token on the weekend, and everyone’s asleep over 36 hours. $15 billion from a meme coin that has no value. Meme coin markets, $140 billion market cap last year. To me, that’s going to be the killer use case where you partner with companies and you directly list them, where the market sets the price. Do you see that that’s like the long term view here is that you’re just pushing companies out leveraging those internet capital markets, as we call it. The
Robert Leshner 24:31
short answer is yes. I think there’s gonna be a lot of companies, especially if they’re known by crypto investors, that do incredibly well with the concept of something like a direct listing, where, you know, if everybody on the Solano blockchain or the Ethereum blockchain already knows your company, you know they don’t have to read through, you know, an incredibly, you know, detailed or marketed by an investment bank s1 if they already know who you are and you’re listing your shares for trading, I think there’s. Essentially a lot of demand. And I think we’re going to see this tested and tried in the coming months. You know, every year, I think direct listings are really exciting. You know, it’s not a mechanism for companies to raise incremental new capital. It does create secondary liquidity. It creates a price. It, you know, really eases the path to raising capital. But you know, it might not be the end stage either. So a company might start with a direct listing and then file the s1 to be able to issue, you know, and sell new shares. And so I definitely think that direct listings are really interesting, you know, lower hurdle for companies that they might take advantage of at an earlier maturity stage, and especially in conjunction with going live and debuting on a blockchain when blockchain investors are already familiar with their company, you know, I think it’d be really exciting for companies, especially if they’re going to be favorably valued, you know, to get an early start on listing their shares, having a market in them, and Using NAT to inform new private investment, or prepare them to go, you know, public and issue more shares to the
Christopher Perkins 26:05
public. So like traditional IPOs, are very close. It’s very hard to get on those primary issuance if you’re an investor, you know, they typically go out to, you know, big hedge funds, big institutions, pension funds, asset managers, whatever. Do you think investors in this new model that you’re proposing will have, like the ordinary retail investor will have easier access to these primary issuance
Robert Leshner 26:24
I definitely think so. You know, right now, the process of, you know, going public is, it’s complex. You know, there’s certain platforms that get allocations directed towards retail like a great example is Robinhood. You know, when a company is going public, you know, block of shares are available to retail customers. It’s not a lot of the allocation. It’s fought over. People get, you know, a small percentage of their requested allocations. But there is some, you know, amount of the process made directly available to retail on purpose, right? Because companies like when they have a broad distribution of ownership they like. When retail owns it, you know, it’s has a lot of value for them. And so I think crypto can do an even better job of this, right? Because the transaction sizes go down, the operational costs go down. People could buy, you know, a single share very easily. And under the hood, it’s no different than, you know, they’re buying a lot of shares. There’s almost no paperwork that has to be done, you know, for each individual investor beyond, you know, whoever the broker dealer is, you know, selling them those shares for crypto. And so I think there’s a huge and willing and extended audience ready for that, and I think it will be a lot more fair, and put a lot more of the upside in the hands of the public at large.
Christopher Perkins 27:45
That’s awesome. Now, you’ve been working very closely with the SEC on, you know, this brand new process for taking, for tokenizing and taking companies public. How’s that been like? What have been other other sticking points, you know, what’s what’s the SEC been like?
Robert Leshner 27:57
Yeah, so the SEC has been putting out phenomenal guidance. And obviously there’s a huge surface area of work that they’re focused on across crypto and across non crypto markets, right? But within crypto, they put out a huge amount of guidance so far that starts to lay out the vision and the framework for tokenized securities. So they’ve put out guidance for transfer agents and companies like super state, as we think about tokenizing stock, they’ve, you know, put out speeches that talk about the different approaches to tokenizing, you know, whether it’s working with an issuer or being an unaffiliated third party tokenizing stock. They’ve put out guidance for broker dealers, you know, and how they interact with this stuff. They’ve really been laying, you know, all of the sort of railroad tracks for this to start. And, you know, I’ve been, you know, incredibly impressed with, like, how thoughtful, you know, the SEC and the crypto Task Force have been at thinking through all of the different pieces of this market that they have to figure out guidance for, and they have to figure out, you know, standards for, and that potentially, they have to figure out exemptive relief. And I think they’ve been making just continued progress. And I think, you know, by the end of this year, all the pieces will be in place for tokenized securities to really begin to
Christopher Perkins 29:11
move. Yeah, I totally agree with my experience with them. They’re returning to a principles based approach, which is pretty amazing. I actually had lunch with a guy named Richard Breeden a few weeks ago. This guy was the chairman of the SEC in the 90s, and he was the guy. He told me the story about what it took to make ETFs go live in the States. And he said, Yeah, Chris, you know, the Canadians got it done. They were asking for me to do it. And so I asked staff, I’m like, why aren’t we doing this? And they said, well, we don’t really understand blah, blah, blah. And he said, Well, you better figure it out. Give me a good reason not to reason not to do it, or you’re doing it. And they did it. And today, ETFs are 1514, and $15 trillion industry. I think that tokens is the next ETF. Do you agree? I
Robert Leshner 29:53
It’s a great question. I mean, I think it’s, some ways it’s like the next ETF. It’s. Some ways, it’s like the next securitization market. Like SEC also enabled securitization to come in, without saying it has to be an s1 it basically created, you know, new processes for how do you describe an asset backed security? You know, knowing that it can’t conform to existing standards. You know, I think when it comes to tokenized securities, you know, it’s more about how equity already works today, but customized for the nuances of it operating on a blockchain. When it operates on a blockchain, certain things are harder, things like, you know, Reg NMS are harder, right? Or more complex, or maybe not needed at all, right? When it operates on a blockchain, it’s really an asset that’s already well understood. It’s not really even a new asset. It’s an old asset, yeah, being transferred and recorded in new technology. And so in some ways, you’re right, it is like ETFs, but ETFs were like a net new asset that behaved as a financial asset very differently. You know, we’ll see. But I think you know, there are good historical precedents for something net new coming along, whether it’s ETFs, whether it’s securitization and the SEC getting it right, figuring out, you know how it’s supposed to work, knowing that the market wants it, the market demands it, and it can be done correctly,
Christopher Perkins 31:20
right? When you talk about reg NMS, you’re really talking about what’s known as the nbbo, the national best bid and offer. So like, you can’t have multiple places of execution with different pricing. Typically you have to be root you have to root equities to the most, the best price. And essentially, that’s one of the complexities, as you’re starting to create two worlds, an on chain world and a centralized world,
Robert Leshner 31:42
right? But all of that’s rooted in the idea that it has to be fair for the end advisor, right, that the in the investor can’t get ripped off because the broker sends it to the wrong place, because maybe they’re incentivized to right and at the end of the day, like a crypto market can, and most likely will be significantly better for the end investor, for so many different reasons that, you know, it will be hard for people to like conform to the exact standards, but the raw amount of innovation that might benefit the investors, you know, I think warrants, you know, the opportunity for the industry to try it’s
Christopher Perkins 32:19
exciting. I mean, we’re coming back to principles, and what principles? And what principles are we trying to solve for capital formation, federally, markets, et cetera. It’s pretty exciting. As you’re moving forward, you’re looking for companies, right? You’re building a pipeline of companies to take public. Can you describe what kind of companies you talked a little bit about it. But are there particular sectors, you know, what type of companies are the best that would come, you know, bring up super state and say, Robert, take me public.
Robert Leshner 32:42
Yeah. So we’re really starting with companies that are operating, you know, in and adjacent to the crypto industry that exists today. And the reason why we’re starting here is because these companies have, you know, a fan base of, you know, users, investors, clients, whatever it is within crypto, they’re already well known in the space. And when their tokenized stock can trade on a blockchain, there’s a lot of people that already understand the business, how it works, why it’s good, what their edge is, you know, why someone would want to be a part of it. And I think there’s a very natural starting point. We’re not really starting with, you know, companies outside of the crypto industry at large to tokenize their stock, and over time, I think we’ll get there. I think over time, we’ll have manufacturing companies and technology companies and finance companies and healthcare companies and everything in between tokenizing their stock because there’s advantages to it, but the companies and issuers that get those advantages most innately are the ones who already work in the space. They already know how blockchains work. They already know how many investors there are. They already know what the tools are. And they say, like, yeah, like, sign me up for more capital market access amongst this group of people that understands my business.
Christopher Perkins 33:55
Awesome. So you talked about, like, a fundamental rewrite of market structure and a ton of innovation that’s happening in the space. So for the investors on the phone or who are listening in right now, how should they think about entering the space? You know, what are the big trends? Where should they be thinking about positioning themselves?
Robert Leshner 34:16
It’s a great question. I mean, crypto is such a massive umbrella term at this point, which encompasses so many fundamentally different industries, so to speak, right? You have, you know, massive assets like Bitcoin, that are an asset class unto themselves, that are truly special and unique economic systems with very little comparison, you have blockchain computing platforms like Ethereum and Solana, in which developers like superstate and many others are building applications to route financial assets and become infrastructure for. Or, you know, markets. You have meme coins, you have, you know, crypto native projects launching their own tokens. And you have so many other things, like the space itself, the surface area every single week. You know, I sort of like laugh or forget, like, just how big crypto is and how much it encompasses, right? You know, the area that I’m most excited about is like, how do we use blockchains to transform financial markets? And I personally think that this is the most exciting area. It’s not necessarily the most directly investable, frankly, because most of the companies that are transforming the way financial markets operate and using blockchains to, like, rebuild market structure for the most part. We’re private tech companies, right? We’re, you know, we’re startups, right? These are not things that you can easily deploy into. Versus some of the crypto assets like Bitcoin or ether or Solana, are, like, extremely easy to deploy into at this point, you know, most traditional brokers are opening up crypto trading access. You know, a lot of native crypto, native exchanges, you know, Coinbase, you know, etc, offer access. You know, at this point it’s extremely easy to deploy capital into, you know, tokens. And so there’s kind of this gap, which I actually find a little bit frustrating. And, you know, I hope that over time, as the tokenization of securities really begins to pick up momentum and speed, that it becomes really easy for investors at large to deploy capital into new types of projects, because their stock is tokenized and it’s on a blockchain, and when it is, you know, if it could be listed on a Coinbase or a Robinhood, or any of the traditional brokers that are adding support for crypto, it can become more available. But it’s frustrating to me that what I think are the most interesting opportunities are still relatively closed off, and you can only access them if you’re investing essentially in venture capital.
Christopher Perkins 36:55
Yeah, but then there’s this weird thing that’s happened recently, right? With dat digital asset treasury. Oh, we’re taking, like, tokens, and we’re turning them into securities, right, to make it easier for people to access. I know that we’ve both been involved in a few projects. I saw your name on a couple of these decks recently. What do you think about that space? I mean, isn’t that the complete opposite direction, that we’re tokenizing everything, but now it seems like we’re, we’re making everything a security, yeah,
Robert Leshner 37:22
well, it’s funny, because I think of digital asset Treasury companies or dats as almost like ETFs, not like wrappers around the crypto asset, and not like companies at all. And you know, if you squint and zoom out. You know, dats are, in some ways, regulatory arbitrage. They’re essentially companies that have become levered ETFs, right, where their whole business is to hold crypto, borrow money, issue equity and buy more crypto. And they’re not investment companies because the assets that they’re buying. It started all with MicroStrategy, now called strategy buying Bitcoin. Bitcoin is not a security, and so you can own an unlimited amount of it, and you’re still not an investment company. You still avoid the 40 act. You still don’t have to become an ETF, essentially. And so people have figured out how to make essentially levered crypto products available to everybody in every brokerage account using the Debt structure. And I think that’s fundamentally interesting. This was sort of, in some ways, a workaround around the SEC because especially in the like Gensler administration, they weren’t moving that quickly on crypto products, right? It a cork had to force them to approve a Bitcoin ETF, like their own spot Bitcoin and so, you know, these have been the workarounds around the regulatory structure at the end of the day. Like, I don’t think it’s great for a regulatory perspective, because it’s kind of like a loophole, right? As you start to, like, look at all the new long tail of assets being put into these dats, like, some of them start to look more like securities, and it’s like, oh, now you have, like, a levered thing that, like, maybe should be an investment company, you know. But I think the fundamental products interesting, they’re essentially slightly levered. Crypto, ETF, like products and MicroStrategy has proved that this is sort of, you know, resilient across market cycles. I mean, you know, a lot of credit to Michael Saylor, micro strategy slash now strategy, as they shorten the name, has withstood multiple market cycles. It’s grown incredibly steadily and robustly in good times and in bad times. And it has worked, and he’s been able to amass just a huge amount of, you know, enterprise value at MicroStrategy by pursuing. This crypto Treasury strategy, and it’s obviously inspired hundreds of copycats at this point. And so, you know, it’s possible that supply is larger than demand at some point in the near future, and instead of these things trading at a premium to the value of the crypto they hold, which sort of fuels their growth, they start to trade at a discount. But we’ll see. I mean, I’m just really, you know, intrigued by how quickly this is growing and to see where it goes from here. It’s
Christopher Perkins 40:28
totally frenzy, right? So it’s a frenzy. You put it into a security. So my last question is, so you got to tokenize these things, or
Robert Leshner 40:34
what? Well, we are working with a couple, you know, dat companies to tokenize their stock. There’s at Super state. There’s two that we’ve announced. I can’t talk about issuers that we haven’t jointly announced with, but there’s two that we’ve announced that are both digital asset Treasury companies. If you go to superstate.com/opening bell, you can see these companies, but they’re both digital asset Treasury companies. They’re both companies that hold Solana tokens. But they’re not just like holders of soul. They’re actually, like, doing other adjacent things. They’re running validators, you know, they essentially have some inherent leverage in the product. They almost look like, you know, exotic soul instruments, and not just so let’s so, I still see a reason to, like, say, Okay, you take Sol, you put it into a company, then you tokenize it and put it back on the Solana blockchain for people to trade. Because when you do that, the thing you’re putting back on the salon of blockchain looks very different from a risk and return perspective. Then the Solana token in its vanilla format. So it sounds crazy to like, you know, have so much alchemy here. You know, you know crypto and traditional wrappers and structures, but I actually think it’s gonna be really cool when you have a token of a company that holds the blockchain’s native token 100%
Christopher Perkins 41:53
so Robert, thank you so much for coming on. How can people learn more about you? And how can they learn more about superstate?
Robert Leshner 42:00
Yeah, I would say Google super state. And our product opening bell to tokenize public companies. You can follow me on Twitter at our Lechner and in general, you know, do some Googling on tokenization, because it’s really
Christopher Perkins 42:13
cool. It is really cool. And thanks for coming on. Really appreciate it. My name is Chris Perkins, president of coin fund, and you can reach me on Twitter at Perkins, Cr 97 Thank you, sir, Chris,
Robert Leshner 42:24
thanks for having me. Really appreciate it. Talk soon.
Maggie Lake 42:28
If you have any questions about how to navigate the current environment, wealthion can help connect you with a vetted advisor to get a free portfolio review, just click the link in the description below, or head to wealthion.com/free there’s no obligation, and it will just take a few minutes of your time. Again, that’s wealthion.com/free thanks so much for joining us. We’ll see you again next time.
