SBET, Ethereum Foundation & Ondo | Global Markets on Ethereum

The Spaces featured Ondo Finance’s launch of Ondo Global Markets (OGM), a platform bringing permissionless, deeply liquid tokenized stocks and ETFs to Ethereum. Host Ben welcomed Ian de Bode (Ondo Finance), Tamash Stancheck (Ethereum Foundation), and Joseph Shalom (Sharplink Gaming) to discuss why OGM’s mint/burn model at reference prices and ability to tap TradFi liquidity is a step-change versus prior tokenization attempts. The panel detailed why Ethereum’s credible neutrality, security, uptime, standards (ERC-20), developer depth, and perceived regulatory comfort make it the default settlement layer for on-chain finance. They charted the convergence of TradFi and DeFi—ETFs wrapping crypto and real-world assets moving on-chain—driven by liquidity, improved infrastructure, favorable policy momentum, and an oncoming wealth transfer to digitally native investors expecting 24/7 atomic settlement. Discussion covered global access and democratization, institutional risk frameworks that favor EVM, and the role of privacy, MEV protection, and governance. Looking ahead, speakers expect a near-term education phase, a medium-term “tipping point” when a large index fund tokenizes (catalyzing trillions), and a longer-term shift where most assets live on-chain, aided by zkEVM scaling and AI agents. Pushback from incumbents was framed as rent-preserving friction that technology and capital efficiency will ultimately overcome.

Ondo Global Markets launch: permissionless, liquid tokenized equities on Ethereum

• Host: Ben (Ondo Finance)
• Speakers and roles captured from intros (for attribution in notes):
  • Ian de Bode (Chief Strategy Officer, Ondo Finance)
  • Joseph Shalom (CEO, Sharplink Gaming; previously at BlackRock)
  • Tomasz Stanczak (as transcribed: Tamash/Thomas; Co-Executive Director, Ethereum Foundation; founder/previous CEO of Nethermind)
• Launch context and disclaimer (Ben): Ondo Global Markets (OGM) brings tokenized stocks and ETFs on-chain, starting on Ethereum. Not financial advice; tokens not registered under the US Securities Act and not available in the US/US persons; additional restrictions apply.

Why OGM matters and what’s new (Ian)

• First implementation that combines permissionlessness with deep liquidity for tokenized stocks on-chain:
  • Permissionless: Enables true DeFi composability, peer-to-peer markets, and integration without whitelists. Ian analogizes to stablecoins—without permissionlessness, DeFi would not have bootstrapped.
  • Price parity and liquidity: OGM is designed so tokenized equities trade and redeem at the same price as the underlying (no persistent premiums/discounts), and in size without moving markets.
• Architectural innovation: OGM does not rely on on-chain DEX pools for primary liquidity. Instead, it programmatically taps into existing deep TradFi market liquidity (e.g., NYSE/Nasdaq/brokerage venues), allowing instant mint/burn at broker-equivalent prices and scale.
• User experience and utility:
  • Acquire at fair value, redeem at fair value, even for large orders.
  • Once held on-chain, tokens are 24/7 transferable and composable across DeFi protocols that support them—superior functionality vs. traditional brokerage accounts.
• Scope at launch: 100+ US stocks and ETFs available on Ethereum.
• Positioning vs. existing RWA/tokenized equity efforts: Acknowledges other projects (e.g., Superstate; projects on Solana) but emphasizes that prior models often struggled with permissioned constraints and persistent price dislocations/pegs.

Why Ethereum is the foundational settlement layer for tokenization

Security, neutrality, standards, and ecosystem maturity (Tomasz)

• Institutional trust and resilience:
  • ~10 years of continuous operation and strong security properties; highly decentralized validator/governance footprint.
  • Recognized by regulators and institutions; perceived credible and neutral.
• Mature standards and tooling:
  • ERC-20 and other canonical standards underpin tokenization and DeFi; extensive testing, audits, bug bounties, formal verification culture.
  • Rich middleware: MEV-aware trading, privacy solutions layered atop Ethereum, stablecoin rails, Layer 2s.
• Global developer base and infra:
  • Tens of thousands of developers, a million+ validators across thousands of operators; global conferences and grassroots communities facilitate adoption and support.

Credible neutrality and composability (Joseph)

• Credible neutrality vs. private chains:
  • Private databases/chains face inherent trust issues among competing firms and states (control vs. neutrality). Ethereum’s transparent, rules-based, credibly neutral layer eliminates arbitrary rule changes and reduces coordination costs.
• Composability as an exponential innovation engine:
  • On Ethereum, assets can be combined and recombined permissionlessly; this drives non-linear (J-curve) innovation compared with linear progress on closed systems.

EVM as the institutional “safe choice” (Ian)

• Risk mitigation: Risk-averse institutions choose technologies that won’t draw regulatory/reputational fire. “No one gets fired for picking EVM”; it is the default for many banks and large enterprises.

TradFi and DeFi convergence: from paradox to “on-chain finance”

• Joseph’s “two-sided bridge” paradox already underway:
  • TradFi wrapper for crypto: ETFs for Bitcoin and Ethereum pulled TradFi into crypto.
  • Crypto wrapper for TradFi: Tokenized Treasuries and other RWAs bring TradFi assets on-chain.
• End-state: Labels like “TradFi” and “DeFi” fade; it becomes simply “on-chain finance.”
• Institutional adoption curve (Joseph, Ian, Tomasz):
  • Short term: Education-heavy, paradoxical, pilots with permissions and guardrails.
  • Medium term: Institutions increasingly access DeFi liquidity pools where allowed; equalized liquidity across CEX, DeFi, and private venues.
  • The “tipping point” (Joseph): A single large S&P 500/large-cap mutual fund tokenizing could 10x total tokenization AUM overnight, catalyzing a rapid J-curve to trillions.

Why now? Infrastructure readiness, liquidity, regulation, and FOMO (Ian)

• Then vs. now:
  • 2016: Low institutional understanding, conflation of crypto assets with underlying tech, immature infra.
  • Now: Technical maturity; large on-chain liquidity pools (e.g., ~$250B stablecoins; nearing ~$10B tokenized Treasuries) and growing RWA categories (now including equities).
• Regulatory winds: In the US, renewed appetite for frameworks (e.g., stablecoin bill progress; market structure next). Many institutions prepared to be fast followers; the “moment to follow” is now.
• Institutional FOMO: Clear shift in tone over the past 12–24 months; urgency to identify partners and protocols.

Global access and democratization

Breaking geographic and venue barriers (Joseph, Ian)

• Democratization of access:
  • Tokenization lowers minimums and streamlines straight-through processing, enabling smaller ticket sizes and broader investor reach.
  • Atomic settlement and global rails allow “anything-for-anything” swaps—e.g., stablecoin<>BTC, SPY<>FTSE, Tesla<>NVIDIA—without venue/timezone restrictions and with drastically reduced counterparty/settlement risk.
• 24/7 liquidity and UX leap:
  • Crypto-native users expect 24/7, instant settlement. The “sell-to-cash-wait-buy” pattern in TradFi reveals hidden friction; tokenization collapses steps.
• Access for underserved markets (Ian):
  • Hundreds of millions have crypto exchange accounts (he cites ~400–500M), comparable to or exceeding global brokerage accounts. Tokenization lets these users hold both “crypto and stocks” in a single wallet.

Ethereum’s global community and infra (Tomasz)

• World-spanning validator/operator footprint and L2 foundations.
• Grassroots adoption via meetups and flagship events (e.g., Devconnect in Argentina, prior year in Bangkok) catalyzes education and local integration—especially relevant in markets facing currency/market instability.

Demographics as a demand driver: the great wealth transfer (Joseph, Ian)

• Multi-trillion asset handover from Baby Boomers to Millennials/Gen X:
  • Rising cohorts have lower trust in intermediaries, are crypto-native, and already allocate heavily to crypto.
  • They will buy individual stocks and indices on-chain, expect 24/7 trading and instant settlement—forcing product shift toward tokenized rails.

Forward outlook: 1, 5, and 10 years

• 1 year (Ian):
  • Heavy emphasis on user/institution education: advantages of tokenized stocks and RWAs become widely understood (similar arc as stablecoins).
• 5 years (Ian):
  • Tokenized forms of most assets superior to off-chain equivalents due to composability and programmability; standard “investment account” effectively becomes an on-chain wallet combining crypto and equities.
• 10 years (Tomasz):
  • “All assets on-chain” as a default trajectory; borderless operations, embedded compliance, resilience that compounds over time.
  • UX transformations via AI agents (agentic payments/interactions) that abstract blockchain complexity and enhance safety.
  • Massive scaling with zkEVM and L2 advancements reducing latency and costs faster than skeptics expected—supporting mainstream asset processing at scale.
• Market inflection (Joseph): Watch for a major flagship fund (e.g., large S&P 500 fund) to tokenize, catalyzing a step-change in tokenized AUM.

Addressing pushback and skepticism on tokenization

• Incumbent business model tension (Joseph):
  • Many legacy models monetize friction, intermediation, and settlement lags (e.g., T+1/T+2 risk capital, overnight financing, collateralization).
  • Instant/atomic settlement unlocks trillions in trapped risk capital and reduces counterparty/settlement risks—powerful economic incentives for buy-side and, ultimately, banks to adopt.
• Education gap and signal vs. noise (Tomasz):
  • Outsiders face hype and misinformation. Over time, as institutions learn from credible researchers/operators and see rigorous security/governance practices (testing, audits, bounties), skeptics flip to adopters—and often to leaders.

Specific Ethereum traits institutions probe (and how the EF community responds) (Tomasz)

• Fairness of market access and trade execution; MEV-aware designs.
• Privacy options for balances and order flow at the application layer.
• Governance robustness and low-risk profile—broad researcher/core-dev participation, exhaustive testing, formal processes, public roadmaps.
• Regulatory comfort with Ethereum’s open-source ethos and transparent, verifiable operations; privacy can be layered while retaining auditability.

Key takeaways and highlights

• Ondo Global Markets introduces permissionless, deeply liquid tokenized stocks/ETFs on Ethereum, with parity pricing and scalable mint/burn that leverages TradFi liquidity—removing a core bottleneck in prior tokenized equity models.
• Ethereum is the default settlement layer for institutional tokenization due to credible neutrality, security, standards, ecosystem depth, and regulatory familiarity; EVM is the “safe” institutional choice.
• TradFi and DeFi are converging rapidly; early paradoxes (ETFs for crypto vs. tokenized Treasuries) will collapse into a unified “on-chain finance” paradigm.
• Adoption drivers: infra maturity, large on-chain liquidity (stablecoins, tokenized Treasuries), regulatory tailwinds, institutional FOMO, generational wealth transfer, and global access/democratization.
• Watch for a tipping point: the tokenization of a single massive flagship fund could 10x the entire tokenized asset base and accelerate the J-curve to trillions.
• Skepticism will fade as economic benefits of instant settlement and capital efficiency become undeniable; education and credible security/governance practices are already converting detractors.

Closing sentiment

• Consensus among panelists: tokenization is inevitable—and it will (and should) start on Ethereum. The near-term will be education-heavy, but the medium term points to a world where on-chain representations become the superior format for most financial assets, delivering global, 24/7, programmable finance at scale.