RWA Infrastructure: Issuance, Distribution, and Data on Ethereum

Transcript

Hello. As today's panel moderator, I'm Chloe Han from Flow Traders. Good evening, everyone. I'm Chloe Han from Flow Traders. I'm honored to moderate today's panel session. To give a quick context here, Korea's tokenized securities framework will take effect in February 2027, with the first phase focused on institutional private funds and bonds. So under today's topic, today we will focus on real and production-grade lessons across three practical layers. So infrastructure, regulated infrastructure with Securitize,

product design with Ondo Finance, and risk data with RedStone. To kick things off, please introduce yourself in 30 seconds, including one live tokenized product or use case you work on. Hey guys. Gabriel here from Securitize. I lead DeFi growth at Securitize. For those who don't know, Securitize is the leader in tokenization right now. We focus on real-world assets, money market funds, bringing these assets on-chain.

Currently, we have almost $5 billion worth of AUM that sits on-chain. We work with a variety of industry-leading asset issuers like BlackRock. Recently we just announced a new fund with Cathie Wood's ARK Invest. So yeah, that's about me. Hi, Armand Khatri, Head of Ecosystem at Ondo Finance. Ondo is also a leader in tokenization. And similarly, we work with a lot of asset managers, including a number of Korean firms that we're very happy to be partnering with.

Hi everyone, Marcin here, co-founder of RedStone, oracles and Credora ratings. I landed today at 10am flying from Warsaw, Poland, so sorry if I'm a bit jet-lagged, but I do appreciate always if someone says something in Polish, so let me give it a try. Hello everyone. I'm really happy to be here. Thank you all for the introduction. Let's start with Securitize under regulated infrastructure.

In Korea, the market is set to launch under a private, permissioned ledger model. So one of the key operational questions is how to define the boundaries between traditional market entities and blockchain ledger. As we know, Securitize acts as a transfer agent for funds like BUIDL, while fund assets and NAV and custody sit off-chain. So, Gabriel, my first question is, how do you divide those roles?

And second, when something goes wrong, for example, lost wallet or court order, who has the final authority to correct this record? Yeah, for sure. Maybe to zoom out a little bit to share about how we tokenize assets in the first place. We generally follow the native tokenization route. So when we issue tokens on chain, they are the securities themselves. So we had this conversation previously via DMs. To us, there is no discrepancy between what we issue on-chain and what is issued off-chain.

So the token itself is the security, whereas compared to a different model where you are basically creating a token that points to something else that owns a security that is held elsewhere. So to your point, in the native route that we are going down, is that the functions are generally the same. We want to preserve the same attributes that is typically available in regular securities. So that means you have the same controls as any other issuer in traditional finance.

You as a public company, you'll be able to have some level of control for your securities, where you would be able to list your securities, where would you be able to communicate with your investors, investors, share splits, that kind of functions. As a transfer agent, you'll be able to enact those controls whenever you see fit, because you as the company, as the issuer of the shares, you owe that obligation to your investors.

I think the key point here is having that level of control and the investors having real full ownership that is native and direct. One more question is, could you walk us through like BUIDL or another live fund as an example? For the fund like BUIDL, we have BlackRock as basically the asset issuer and also the fund manager of the fund itself.

So that means they are the ones that are taking the assets, taking the subscriptions from the investors, they are the ones that are actively running the strategy. So buying like the US Treasury bills from the markets and then offering that in a very packaged solution to those investors. And then Securitize plays the role of the transfer agent and also the tokenization platform. So for example, whenever somebody loses access to their private keys, us as the transfer agent will be able to essentially burn the lost shares and then remit it to like a new wallet address that is owned by the investor.

So being able to control to that level of detail and retain the same attributes of any regular security. I think that's very important, especially when we operate in a fully regulated and compliant environment. Thank you, that's very clear. Next, let's move to Ondo Finance on product design. As Korea plans to begin with institutional money market funds, but the challenge is not just putting these funds on chain, it's allowing investors to subscribe and redeem outside traditional market hours.

So we are very curious about how Ondo made 24-7 minting and redemption possible in practice. So my first question is, what design choices were most critical for enabling 24-7 minting and redemption? And second is, what matters most for real institutional adoption? Yeah, I think when Ondo builds products, we think about a couple of mandates. But where we've really led and innovated is making sure that a user, if they're subscribing to an on-chain product that has price discovery that happens off-chain,

ensuring that that subscription is happening at the same price that they're seeing this asset at off-chain. So how do you do that? Well, you could either do it in an AMM or a decentralized exchange, which is sort of how most assets have traded on-chain to date, or you could come up with a net new process for these subscriptions, these mints and redemptions. And what we've innovated on is introducing this request for quote model that allows a user to say, well, this money market fund or this tokenized stock like Nvidia, Apple, Tesla is trading at this price.

I know that if I buy it, regardless of the size that I buy it in, I could then sell it at the same price that I'm seeing it trade at in the future. So that to us has been very important. You combine that with a compliance toolkit that tokens can be frozen automatically if they fall into the hands of the wrong people, like a sanctioned wallet, as well as this ability for the token to be accessible, so it's not just accessible by your end users, but it's also accessible by a major theme that we heard of earlier from you know, Joe Lubin, Tom Lee, and Joseph, which is agentic commerce.

And AI cannot KYC to use your product. So you're going to have to have products that could be fully accessible by these agents in a way that they could be utilized when they need it, they could be bought at prices that make sense, they could be sold at prices that are, you know, what's actually trading. And then the agent can move on to whatever their next opportunity is. Thank you, Armand.

That's a useful perspective as Korea thinks about building real liquidity into tokenized products. Now let's turn to our final panelist, RedStone on trusted data. So for a tokenized fund to be accepted as institutional collateral, lenders may need to consider more than its NAV. For example, how current the valuation is and whether redemption is available. So RedStone has used TSSO, Trusted Single Source Oracle, for funds like BUIDL and VBILL.

So could you briefly explain what TSSO does, and besides the NAV, what additional data or risk signals should be provided to lenders to manage the risk? Yeah. Right, so maybe let's start that RedStone is way more than an oracle. We are an infrastructure for settlement and pricing of tokenized assets in general.

And here, maybe to warm up the audience a little bit, please raise your hand if you have or you are or have ever holded RWA in your wallet. Okay, I believe it's like a pretty minor part of the audience over here, and if you look at the numbers, it's actually pretty critical, because there is 38 billion dollars of tokenized real-world assets on chain, while DTCC is holding like 117 trillion, so it's just a drop. And the major problem for that is inaccurate pricing, but also lack of liquidity. So with Securitize, we co -designed this Trusted Single Source Oracle, where the single fund admin signs data before it's being delivered on-chain with RedStone

infrastructure, and then on-chain the signature verification happens, tying also with the previous update that was delivered. With this, on-chain settlement is a new product that we are creating, where we initialize a hub where on one side we have liquidity providers such as market makers, banks and entities with large books, and on the other we have RWAs that want to have instant settlement, liquidations and deleveraging. So we matchmake both of those parties so that the collateral can be used in lending markets such as Morpho, Aave, Kamino and so on, without the need for actually creating the on-chain liquidity. As Armand mentioned, keeping large on-chain liquidity is just expensive,

so you need to find ways to create solutions that allow for instant and direct liquidations and redemptions. So this is how it operates. The third area that we expand on is Credora, which provides risk intelligence. If you're holding any of those RWAs, we are able to give you a score between A to D, whether it's a private credit, money market fund, tokenized insurance, or any other strategy, because the yield itself doesn't tell you the whole story. It has to always be yield with the risk exposure that you're accepting by holding a specific asset.

I have one final question to Marcin. So what do you think is the biggest bottleneck blocking scale of on-chain markets using RWAs as collateral? Yeah, so as mentioned, I do believe the largest problem right now is this lack of on-chain liquidity. No one wants to create very big on-chain markets with tokenized stocks, private credit and similar assets without being ensured that when there's going to be a Black Swan event, there's going to be a way to exit that.

So this is exactly what we are doing with Settle. To give you a practical example, imagine tokenized private credit from Apollo ACRED, for example, via Securitize, or via Ondo with ETF of Janus Henderson, is used as collateral on Morpho, and a user is borrowing USDC against that. We are creating a flash request-for-quote auction whenever there is a liquidation threshold hit, so that any of the liquidity providers can take that asset on their balance sheet, wait until the redemption period, and close the position immediately in an atomic transaction.

So it's an infrastructure gadget that will allow to scale finally the tokenized RWAs from billions to, in my opinion, trillions. And we are bringing that not only on Ethereum, but also other ecosystems such as Base, Arbitrum, Ink, but also Stellar and non-EVM ecosystems. Thank you, Marcin. We are almost out of time, so let's do a quick final round. I have one final question for you guys. So let's just imagine that a Korean finance institution has a budget approval today, and they want to make a production-grade tokenized money market fund when the new framework takes effect in February 2027,

and they came to you for advice. Then, in the next 90 days, what is the single most important decision they must make? Shall we start with you, Gabriel? Yeah, for sure. I think with any product, we really have to stem from the very first question, where is the demand coming from? Because if there is no demand for the product, then nothing else matters. So really, if you want to create this product, you really need to identify who's actually going to be buying this product.

And then that's where you start and dig through the details, right? Thank you. Yeah, I would ask why is the money market fund coming on chain? You go on chain for a number of reasons. Perhaps it's distribution, it's accessibility to new audiences. Perhaps it's agentic finance. But without knowing what the North Star is for why we're going on-chain, it's very hard to give a specific answer. But from there, you could then determine what is the best path, who is the best partner to go on-chain with.

Yeah, I believe the natural part of tokenization is 24-7 markets, global distribution, no borders, making it cheaper. But the one value we are still lacking, and I believe is going to be a killer aspect, is this instant swaps between various tokenized products so that you never have this window where there's no yield accruing. So you buy a tokenized stock, and then you want to exit. You can exit instantly to, for example, a money market fund and hold it throughout a specific period. So it just increases the capital efficiency.

And this is literally what we are creating. Thank you so much to our panelists for providing this practical lesson today. In this panel session, through leading global companies, we were able to hear practical know-how and real cases. Thank you so much everyone. A round of applause, please.