Launching Crypto's Largest Tokenized Fund On Solana | Michael Sonnenshein
🎯 Summary
Podcast Episode Summary: Launching Crypto’s Largest Tokenized Fund On Solana | Michael Sonnenshein
This 34-minute episode of Lightspeed features host Jack Kubeneck interviewing Michael Sonnenshein, the COO of Securitize and former CEO of Grayscale. The discussion centers on Sonnenshein’s career transition from spearheading the launch of the Bitcoin ETF at Grayscale to driving the tokenization of traditional assets (RWAs) at Securitize, specifically highlighting the recent launch of BlackRock’s Biddle treasury fund on the Solana blockchain.
1. Focus Area
The primary focus is the tokenization of Real-World Assets (RWAs), specifically bringing traditional funds onto public blockchains. Key sub-themes include the strategic importance of multi-chain deployment (Solana integration), the bridging of Decentralized Finance (DeFi) and Traditional Finance (TradFi), and the evolving nature of investment access and utility unlocked by on-chain assets.
2. Key Technical Insights
- Multi-Chain Strategy: Securitize operates as a blockchain-agnostic platform, integrating with 10 public blockchains (including Solana, Ethereum, etc.) to maximize distribution and access for asset issuers like BlackRock and Apollo.
- Solana’s Suitability for RWAs: Solana is viewed by issuers as a highly performant blockchain, favored for its speed, low gas fees, and fast settlement cycles, making it purpose-built for RWA applications.
- Bridging RWA Utility with DeFi: The partnership with Athena (Converge chain) aims to create a settlement layer that allows tokenized RWAs to be plugged directly into DeFi applications (like lending/looping), unlocking new utility and yield opportunities that don’t exist in TradFi.
3. Market/Investment Angle
- Tokenized Treasury Growth: BlackRock’s Biddle tokenized treasury fund has achieved over $2 billion in AUM in just over a year, demonstrating massive, rapid market penetration, potentially beginning to displace the role of non-interest-bearing stablecoins for collateralization.
- Democratization of Access: While products like Biddle remain institutional (high minimums), tokenization generally democratizes access to previously exclusive assets (like private equity or top-tier manager funds) by opening new distribution channels, even if investor qualifications (accredited status) still apply.
- Shifting Investment Focus: The market is moving beyond pure crypto speculation. Investors are starting to view their crypto wallets as homes for traditional investments, with tokenized treasuries growing at an estimated 20 times the rate of stablecoins in their early days.
4. Notable Companies/People
- Michael Sonnenshein: Former CEO of Grayscale, now COO of Securitize. His career arc represents the shift from bringing crypto into traditional wrappers (ETFs) to bringing traditional assets onto crypto rails.
- Securitize: A platform that sits between asset issuers and public blockchains, enabling the tokenization process.
- BlackRock: Issuer of the Biddle tokenized treasury fund, highlighting institutional adoption at the highest level.
- Athena/Converge Chain: A partner focused on leveraging DeFi expertise to build utility around tokenized RWAs.
5. Regulatory/Policy Discussion
Sonnenshein noted that his work at Grayscale culminated in the successful lawsuit against the SEC, which unlocked the Bitcoin ETF. In his current role at Securitize, the process still involves navigating regulatory rules, but the focus is on issuing securities only to KYC/whitelisted addresses. Securitize maintains its own digital ledger via a digital transfer agent, providing a necessary compliance and reconciliation layer above the public blockchain.
6. Future Implications
The industry is heading toward a convergence where the two worlds—traditional brokerage accounts and crypto wallets—blend. The next major unlock for RWAs will be leveraging them within DeFi to generate additional, stacked yield (e.g., using tokenized treasuries as collateral to mint a tracking asset for DeFi strategies). Sonnenshein believes the utility unlocked through composability is the key differentiator, not just cost savings, though lower costs are expected as the technology matures.
7. Target Audience
This episode is highly valuable for Finance Professionals, Asset Managers, Blockchain Strategists, and Institutional Crypto Investors interested in the practical application, regulatory landscape, and market trajectory of Real-World Asset tokenization.
🏢 Companies Mentioned
💬 Key Insights
"the things today that are good for tokenization or good candidates for adoption and tokenization are things that are liquid, things that have very frequent pricing."
"I'm not that bullish on tokenizing real estate at the moment."
"It actually allows them to continue to earn the yield on the RWA that they bought, but then also use that value, use that collateral to then go unlock additional yield opportunities."
"The biggest wave of adoption has really centered around bringing these assets into the world of DeFi. One construct that I know we at Securitize are really proud of is really starting to bridge that gap. So today, investors can, for instance, buy RWAs through Securitize... and they're actually able to vault their asset in a way that then allows them to mint another tracking asset on top of it to then go use in DeFi."
"The RWA space, not to keep using the acronym that I'm not sure is going to stick, doubled in size in the last year and like within that tokenized treasuries is probably the fastest growing segment. It's grown like over 500% in the last year and it's probably now growing at like 20 times the rate that stablecoins grew in their earliest incarnation."
"We're at this crossroads where our investors going to start thinking about their wallet as a home for not just crypto assets, but also things that they historically would think about as investments that may be held in a Schwab, a Fidelity, or JP Morgan account, right? And I'll be going to start to see those two worlds kind of blend together."