Pantera: The Tokenized On-Chain Migration

Author: Franklin Bi, Partner at Pantera Capital; Source: Pantera Capital July Blockchain Letter Compiled by: AIMan@Golden Finance

In 2025, tokenization has gone from concept to inevitability.

It has been nearly ten years since I participated in drafting the initial design for JPMorgan Chase's asset tokenization. At the time, the idea that securities could be settled on public infrastructure seemed radical. But one thing is clear: once these "rails" are programmable, the structure of the capital market will eventually change.

Today, this assumption is becoming a reality at an unprecedented rate.

Currently, more than $24 billion in real-world assets have entered public blockchains, more than three times the amount at the beginning of 2023. Nearly 200 issuers, from BlackRock and Franklin Templeton to Siemens and JPMorgan Chase, have invested actual capital on the chain. Fintech companies are no longer content to be just modern interfaces for traditional rails, but are starting to build new rails themselves. Companies are also starting to issue on public blockchain infrastructure for the first time.

A few weeks ago, Robinhood announced the launch of Stock Tokens, breaking new ground: these tokenized stocks, exchange-traded funds (ETFs) and private company shares will be issued on Ethereum's second-layer network Arbitrum. CEO Vlad Tenev said the company's goal is to build Robinhood Chain - an Arbitrum-powered network optimized for 24/7 global trading of tokenized assets.

A deeper transformation is unfolding. The infrastructure of the capital markets is migrating to the chain. At the same time, the strategic strategies of fintech companies, enterprises and investors are being rewritten in real time. We are witnessing a massive migration: assets, issuers, and investors are moving to a new generation of infrastructure for the circulation, clearing, and valuation of capital assets.

A “gravity well” is forming around early liquidity of tokenized assets. We believe it will shift the center of gravity of price discovery, capital formation, and liquidity from Wall Street’s antiquated plumbing system to modern blockchain rails.

The question now is: what happens next?

Financial Physics

If Isaac Newton worked on Wall Street, I believe his first law of financial physics would be:

"Assets will move in the direction of least resistance (unless subject to regulatory intervention)."

In other words, assets will eventually flow to where:

1. They are most freely mobile (globally accessible, 24/7, software-grade speed)

2. They are least expensive to trade (fewest middlemen, software-grade costs)

3. They are most fully valued (global price discovery, maximum utility and composability)

Blockchain is finally making this possible. I have witnessed this migration inside JPMorgan’s global bank and in Pantera’s venture ecosystem. What seemed impossible to my Wall Street colleagues in 2015 is not only operational today, it is accelerating.

Like Eurodollars in the 1960s, American Depositary Receipts (ADRs) in the 1990s, and Exchange Traded Funds (ETFs) in the early 21st century, the liquidity of tokenized assets will first gather at the edges and then spread to the center. Tokenized Treasuries, private credit, and now equities, are early signals:

Today, Figure has processed over $41 billion in real world asset (RWA) transactions and currently holds $13 billion in assets on-chain, including the first publicly rated home equity line of credit (HELOC) asset-backed securities (ABS) issued natively on a blockchain rail. Ondo has issued over $1 billion in tokenized Treasuries and is currently expanding into tokenized equities through Ondo Global Markets, with plans to offer over 1,000 tokenized NYSE and Nasdaq stocks.

Tokenization expands the reach of capital markets to become truly global for the first time. We believe the best issuers will follow liquidity, with one-click access to a global pool of capital — only possible with on-chain settlement. The most forward-thinking investors will demand portability, transparency, and the utility that only on-chain primitives can provide.

New Fintech

The strategy for success for disruptive fintech companies used to be: “Become the bank before the bank becomes you.”

Tokenization opens a new path to success: not having to be a bank, but becoming infrastructure.

Robinhood’s recently announced “Robinhood Chain” is a blueprint. Rather than competing on front-end UX or margin rates, it is converting its user base into liquidity in its own block space.

Here’s how Robinhood’s CEO and his team describe the “Robinhood Chain”:

“It’s the first blockchain with the necessary technical and regulatory infrastructure to carry the entire traditional financial system into the future…Our goal with launching equity tokens on Robinhood Chain is that in the near future, you will be able to seamlessly transfer assets in seconds, and your ability to trade will no longer be dependent on any single broker or counterparty.”

But wait, wouldn’t reducing reliance on brokers hurt Robinhood’s core business as a digital broker?

Not if it gives them the opportunity to reshape the entire capital markets system and position themselves as a dominant vertically integrated platform. The logic is simple: if you own the distribution channel (users) and the interface (application), why not also be the rails (infrastructure)?

Historically, Robinhood and other platforms have been limited by:

● “Perpetual storage taxes” paid to custodians and central depositories

● Slow, expensive settlement cycles enforced by clearing houses and banks

● Limited access to new assets due to bottlenecks at exchanges and legacy rails

By moving on-chain, Robinhood is freeing itself from the hidden costs of financial “sharecropping” and the burden of legacy infrastructure.

Robinhood isn’t alone in launching its own chain. Coinbase’s second layer, Base, is one of the fastest growing ecosystems, generating over $100 million in revenue for Coinbase to date. But more importantly, these new enterprise chains represent a step toward internalizing the benefits of programmable finance (fees, traffic, and future options).

In all cases, the model is the same: own the sorter, own the economic power. As vertically integrated market venues, they can capture trading spreads, custody fees, and infrastructure rents that previously belonged to traditional institutions. But owning a sorter is not just about capturing fees, it is about owning liquidity, owning distribution channels, and ultimately owning capital formation capabilities.

Fintech companies that control all three will not need to obtain permission from transfer agents, clearing firms, or exchanges. They will enable global capital markets through a wallet application - with composable applications, enforceable rights, and real economic gravity.

With a vertically integrated chain, fintechs can:

● Onboard tokenized assets permissionlessly and easily like an API

● Monetize trading volume more fairly and cheaply, breaking the traditional Wall Street fee model with usage-based pricing (just as the SaaS model does in many industries)

● Enable third-party developers to build applications on top of their liquidity streams and asset inventory, such as asset lending, structured products, insurance, and portfolio management tools

● Exhibit transparency and programmable control for regulatory compliance

Robinhood does not need to build a securities lending division for tokenized stocks. Morpho can be deployed on the Robinhood chain, and Robinhood can simply direct users to Morpho’s smart contracts. This is the evolution from application developers to platform operators.

We are entering a new phase in the tokenization cycle, where Wall Street’s most powerful distribution platforms will be able to build new infrastructure for themselves and become the most popular venues for trading, payments, and capital formation.

The Re-Platformization of Capital Markets

This isn’t just happening to fintechs. Some of the world’s most systemically important institutions are now issuing and settling assets on-chain.

When I left JPMorgan’s blockchain team in 2018, it was partly out of impatience. I thought enterprise adoption of public blockchains would take another two years. That turned out to be overly optimistic. Seven years later, the inflection point has finally arrived.

BlackRock’s BUIDL fund surpassed $375 million in assets under management (AUM) within six weeks of launch and now stands at over $2.6 billion, paying dividends natively on Ethereum in the form of USDC. JPMorgan’s blockchain platform processes intraday repo trades on a private fork of Ethereum, settling collateral in minutes, compared to days with traditional methods. In 2023, Siemens issued a €60 million digital bond directly on public Ethereum—without the involvement of a bank. Similarly, Société Générale issued a digital green bond on Ethereum in 2023, with participation from regulated institutions such as AXA and Generali. These successful pilots are early signs of the coming wave.

Institutions are now realizing that we no longer need:

● Investment banks to facilitate access to capital

● Correspondent banks to piece together global distribution networks

● T+2 settlement cycles that delay liquidity and amplify risk

Public chains offer global reach, instant settlement, and programmable logic. For businesses facing rising capital costs and a fragmented investor base, the ability to issue bonds (and eventually equities) with one click and immediately access global liquidity is a temptation that cannot be ignored.

Fintechs are building chains to have distribution and monetization capabilities. Businesses issue on chains to reduce capital costs and expand access.

Both came to the same conclusion: public blockchains are the most reliable infrastructure for operating the world’s first truly global, 24/7, universally accessible capital markets.

Access, but not yet ownership

However, most of what is called “tokenization” today remains incomplete. We have built the highways, but the gates to the city center—the courts, the shareholder registers, the governance mechanisms—remain locked.

Today, you can trade tokenized stocks and treasuries on-chain, but don’t mistake that for full ownership. Your rights—voting, inspectional, or enforcement—are still trapped in off-chain structures: special purpose vehicles (SPVs), custodians, transfer agents. We have given investors access, but not yet ownership.

As liquidity grows and investors experience the benefits of their tokenized portfolios, there will be increasing pressure on issuers to grant full shareholder rights to token holders. Some investors won’t wait, they will tokenize their portfolios themselves and beg forgiveness later.

This tension between issuer rights and investor rights is likely to be one of the defining battlegrounds in tokenization over the next decade. Who controls shareholder privileges when assets are on-chain, but the registry is not? What happens when token holders want more than transferability and price discovery — when they want the power that comes with true ownership?

As SEC Commissioner Hester Peirce recently said, the promise of tokenized securities is “fascinating, but not magic.” Simply packaging assets into digital form will not achieve this promise. It requires a shift in issuer thinking from experimental sandboxes to on-chain native issuance as the default path to access global capital pools.

Tokenization’s Tipping Point

The rise of tokenized assets today is similar to the early days of exchange-traded funds (ETFs).

In 1993, the first US equity ETF (SPY) launched and surpassed $1 billion in AUM within a year. But the real inflection point wasn’t its size, but when ETF volumes began to consistently match and eventually surpass mutual fund flows. That’s when market structure shifted, and investor behavior changed with it.

We believe tokenization will usher in a similar moment in terms of broad market structural transformation and issuer and investor behavior. I believe the tipping point will come when any of the following occurs:

● Daily on-chain equity trading volume exceeds $1 billion, comparable to lower tier ADRs or long-tail ETFs

● AUM of tokenized equities exceeds $100 billion, giving systemic allocators (sovereign wealth funds, pensions, endowments) the confidence to include tokenized assets in their portfolios

● A top public company (S&P 500 or Nasdaq 100 component) has more liquidity on-chain than its home exchange or corresponding ADR

● A global IPO bypasses New York entirely and is issued directly on-chain, or in a financial center with a more developed regulatory and policy framework for on-chain issuance

Today, we’re still in the early stages: Tokenized stocks currently average around $300 million in monthly trading volume. But it’s the growth rate that matters — up 350% in the past month — and many important new initiatives, like Robinhood’s equity tokens and Ondo Global Marketplace, are still in their early stages.

If the adoption rate keeps up this positive momentum, the $1 billion daily trading volume threshold could be achieved in 2-4 years, depending on several potential catalysts:

● Regulatory clarity on tokenized asset packaging and native issuance of shares on the chain

● Specific financial application chains reaching scale in performance and liquidity, such as Robinhood Chain, Ondo Chain, Provenance Blockchain (and there will surely be more in the future)

● Removal of user experience (UX) barriers, allowing retail investors to access on-chain assets without wallets or gas fees

● Portable compliance layer that abstracts KYC/AML checks and natively binds to tokens, unlocking cross-border liquidity safely and compliantly

When this happens, it will look so obvious in retrospect, like tokenization’s “ETF moment.” Today’s early adopters are focused on applying a better set of rails, but the biggest story is a tectonic shift in the future of capital markets. Once the migration is complete, blockchain will be recognized as the default destination for capital formation, price discovery, and value transfer—the first and last stop for issuers and investors. Having worked on some of the earliest blueprints for tokenization, I can say with conviction: the rails are in place, liquidity is flowing, and the momentum is real. The gravity well has been created, and now we just have to wait and see.