# Ondo Finance: Tokenization and the $100T On-Chain Market

**Podcast:** The Milk Road Show
**Published:** 2026-10-16

## Transcript

At some point, All assets will be on chain.
I think this market is over $100 trillion in time as all markets move on chain, all assets move on chain.
Ondo just crossed $4 billion in total value locked.
It is putting BlackRock portfolio strategies on chain and Wall Street is coming to crypto in a big way.
What does this mean?
What does tokenization actually look like?
And what do investors need to know about all this?
Hello and welcome to Milk Road Crypto, the show that knows that the best time to be bullish is when the market is panicking during a tiny pullback.
I'm your host, John Gillen.
Today is Thursday, October 15th.
We'll be releasing this episode tomorrow on the 16th.
And today we are joined by Managing Director and Head of Product Portfolios at Ondo Finance, John Hoffman.
Before Ondo, he ran the ETF business in the Americas at Invesco and led distribution at Grayscale.
John is an expert on all things Wall Street and crypto.
He's going to share a lot of wisdom with us in this episode, and he's going to tell us all what's going on at Ondo.
If that sounds good to you, make sure you like and subscribe.
Share this episode with somebody who's going to enjoy it.
And as a reminder, our podcast today is free and that would not be possible without our wonderful partners at Nexo, the digital asset platform that lets you trade, earn and borrow all in one place, all from one account.
So keep an ear out for more information on them later in the show.
But for now, welcome to Milk Road Crypto, John Hoffman.
Sir, how are you?
Thanks for having me on today.
Long time listener of the program.
So it's an honor to be here with you today.
Well, I'm a big fan of your work too.
I've been following Ando for a long time.
John, I thought a great place to start the conversation would be with you just introducing yourself a little bit to the audience and telling us about your story.
As I said, you spent almost 20 years at Invesco in ETFs and you were at Grayscale as well.
And now you have jumped over from TradFi to digital assets.
Talk to me a little bit about that transition and what that's been like for you.
Yeah.
So I started my career in management consulting.
I was actually buying ETFs in my personal account in the early 2000s and thought it was a tremendous technology for delivering investment returns.
And I joined the ETF industry in the early 2000s when it was a relatively small, unknown category.
Spent nearly 20 years working in various capacities on the ETF space, watching it go from kind of a cottage industry to now a mainstream technology.
As it relates to crypto and maybe...
John, just setting up Ondo, where I currently lead the product portfolios business.
I think that by way of introduction, Ondo is really focused on building the infrastructure to power open, always on global capital markets.
And it's really about improving the investment experience for everyone.
And so I made the transition to crypto a couple of years ago.
When you think about crypto, we're 15 years into this technology.
and a lot of truly innovative technologies, they take time to ultimately deliver the promise that they set out on the front end.
And I think that we're at a point now in crypto where the promise that was originally set out upon is now starting to manifest.
And, you know, Ando is really leading that charge on the tokenization front.
Gotcha.
Yeah.
I want to talk about what Ando is doing on that front.
But I think that the thing that stood out to me about Ando so far has been the growth.
It took stable coins, I think, about three years to hit a billion dollars.
Ando hit that with their tokenized stocks in just under eight months.
And it seems like...
There's like a big push towards this across the regulatory backdrop from the SEC and the CFTC, but also across Wall Street.
What do you make of the speed at which Wall Street is moving towards tokenization?
And talk to me a little bit about that.
Yeah.
So to your point, I mean, stable coins, I think it was three years to reach a billion in TVL.
Tokenized treasuries did that in about 18 months.
Ando Stocks, which is the platform that tokenizes U.S.
equities and ETFs, reached that milestone in eight months.
And so when you zoom out and actually think about where those markets went, stablecoins are now a $300 billion market.
I think there's nearly $9 trillion annually of transaction volume moving on stablecoin rails.
And so certainly very significant.
In terms of the speed of adoption as it relates to tokenized equities, I think there's kind of two factors there.
One is, you know, we're talking about a global borderless technology, right?
Anyone with an internet connection and a wallet, you know, can access this.
And so when you think of the addressable market, you know, really it's, you know, 8 billion people, which is different than how traditional finance has, you know, been built, which is very much driven by, you know, local markets, local regulation.
This is a global borderless technology, more akin to the internet.
versus kind of like the traditional individual library market, if you will.
The second element, I think, is really around demographics, right?
You know, you look at the demographics globally and, you know, just here in the U.S., $85 trillion is going to transition from Gen X, Gen Y, Gen Z over the next seven to 10 years.
And those generations that are inheriting that capital, they've already started to inherit that capital are more digitally native.
You know, I know my kids can move around an iPad and, you know, a remote control or anything a lot faster than I can.
You know, a lot of these folks grew up with this technology, you know, attached to their high chair.
And so they trust the technology.
They understand the technology.
And I think that's really going to speed up the adoption here, you know, these would be, you know, traditional analog technologies.
All right, John, like we said, you spent a lot of your career in the ETF space.
I've heard you say that tokenization looks a lot like the early days of ETFs.
I wonder if you could elaborate on that because ETF businesses now, I think it's like $16 trillion of assets are in ETFs or something like that.
But what makes you think this is the analog to tokenization that's appropriate here?
And what do you think that means for the growth of tokenization?
Yeah, look, it's an analog for me because, you know, I think we're all shaped by our perspectives.
My perspective was very much in the ETF industry.
I think you could translate that more broadly as well.
Look, ETFs are a mainstream technology today, right?
In the U.S., we've had...
16 consecutive months of $100 billion of net inflows.
It's a commonly accepted way to invest in the US and globally, quite frankly.
When I started in that market, that was not the case.
Back in the early days, there was actually an article written that referred to ETFs as weapons of mass destruction, and it pontificated that passive investing was going to be the demise of capitalism in America.
And clearly there was other motivations there to attack the ETF as a structure.
We heard a lot in the early days, my current technology works great.
I don't need something new.
I think even Jack Bogle was very adverse to ETFs in the early days, somebody that pioneered the mutual fund.
And I remember when we were doing fixed income ETFs, there was criticism.
How could you take something that trades OTC by appointment over the phone and bring it on exchange and allow it to trade electronically throughout market hours?
And so I remember we used to do events.
And one of the things we would say sometimes when the audience wasn't paying attention to kind of wake them up was, if you don't like change, you will hate irrelevance.
And then people started kind of listening.
I think it's a similar.
situation here with tokenization.
It's the early days.
I hear a lot of people say, is this a solution in search of a problem?
The markets are tremendously efficient.
Not everything worked in the ETF.
We tried a lot of things.
I remember active non-transparent was a big strategy there that never really worked.
In the tokenization market, we're in the very early stages.
There's tremendous technology here that ultimately will reshape markets, but there's still a lot of skepticism.
And so it reminds me.
of those early days of ETFs.
There's a lot of education that has to happen here.
And I think that, look, in 15, 20 years, hopefully faster than that, probably faster than that, we're all going to wake up and this is going to be a mainstream technology.
And, you know, we'll be talking about the next innovation that people feel, you know, isn't needed that will ultimately, you know, transform how they how they invest.
This pullback on Bitcoin is scaring a lot of people and I am not one of them.
So if you want to see what I'm not selling and why, what's on my watch list and when I'm going to be deploying more capital into these markets, you can join Milk Row Pro today.
It's just a dollar.
The link is in the description.
I answer questions day and night in Discord.
I'll see you there.
Well, John, I appreciate the sense of humor, but also the perspective.
Education is a big part of what we focus on here at Milk Road.
I want to get an education on some of the products that Ando has been launching because you guys have been very busy this year.
Last month, you launched something called Ando Intelligent Portfolios.
And as intelligent as they may be, I think a lot of people are still kind of confused as to what this product is.
What is this in plain English?
How does this work?
Tell us about this.
Yeah.
So, John, maybe if I could spend a moment just setting up Ondo because it really builds on how we got to Ondo Intelligent Portfolios.
And I mentioned that we're focused on building the infrastructure to power these open, always on global capital markets.
And we started by tokenizing treasuries.
We took the most liquid assets to start with.
We're number one in tokenized treasuries today with two capabilities, over two and a half billion dollars of TVL.
Next, we built Ondo Stocks, which is focused on tokenizing stocks and ETFs.
And that, as we talked about, ramped up very quickly to over a billion dollars.
We've got over 450 listings there.
We've done over $30 billion of notional volume since that launched.
And we're number one in tokenized stocks and ETFs.
We then launched Ondo Perps, which is a perpetual futures exchange that is using RWA perps, right?
So what's cool about this is you can actually take the Ondo stocks and use those as collateral on the perps exchange.
So again, it's kind of a modular build.
Each element is building on the next one.
The last thing, which we very recently launched, which you just touched upon, is Ondo.
intelligent portfolios.
So we had to start by getting the assets on chain.
Now what we're doing with onto intelligent portfolios, it's really about assembling these assets into professionally curated investment strategies that are delivered to investors globally in a single on-chain token.
And so that was the launch of OnDo Intelligent Portfolios.
It's a new category in a lot of ways.
We started with seven capabilities there, seven different portfolios.
But again, it's really about delivering a single portfolio token powered by best-in-class asset allocation and security selection.
And I think in a lot of ways, John, this launch is, again, using my ETF parallels here, this is the spy moment for the tokenization market.
You know, we're not tokenizing a fund here.
We're opening a completely new category, you know, professional portfolio construction, asset allocation, security selection, automatic rebalancing, you know, digital return patterns that are instantly accessible to anyone in the world.
I have to do caveat that outside the United States today that has an internet connection and a wallet.
That's an important caveat.
John, I think, you know, as you alluded to, people already have ways to get allocations and access to stocks, to ETFs.
Differentiate this product for me.
What makes it different from what's already on the market?
What makes it more attractive?
Talk to me about that.
Yeah, so it's a great question.
I think there's a number of factors to think about, you know, vis-a-vis.
I'll do this kind of vis-a-vis what's available, you know, in traditional finance today.
There's an element of 24 by seven.
So these tokens can trade 24 by seven, 365.
So there's an element of timing.
Access, right?
I touched upon that briefly.
Nearly anybody with an internet connection in a wallet has access.
Control, I think, is a really interesting factor here.
I use the word control, but what I mean by that is...
You know, you could self custody this asset.
You could also send it peer to peer.
So, John, I could send you, you know, shares of Tesla directly without an intermediary, which opens up all sorts of new paradigms with this element of control.
But I could also take this asset because I control it and bring it to DeFi.
and perhaps lend that asset to unlock additional utility.
And again, there's certainly lending markets today in TradFi, right?
I can lend my ETF shares or I can lend my stock, but ultimately my broker dealer is the one that facilitates that and determines who they're going to lend to and the counterparties and the rates associated with that.
This control element here, I can choose who I'm lending to.
I can choose what type of risk I want to take on.
I can control the terms of that loan, which I think is about, to some degree, precision and control is kind of how I would think about that element.
The real element here, which again is still in the very early days.
is the automation portion of this.
When you move the asset from an analog technology to digital, so that it is a digital asset, instantaneously, it is native to this digital market where we think that AI is going to play an increasingly important role.
And so now this asset can directly interface with AI.
Think about it like email.
Email wasn't just about moving from speeding things up and enabling me to send something to anybody in the world.
Now with my email, I can plug in the AI agent to respond to my email.
I can have the agent schedule for me.
And all of that is unlikely.
I certainly couldn't have my AI agent do that with my mailbox out in front of my house.
So I think there's a similar element here of what this is going to enable from an AI.
element too.
And then lastly, just like the personalization and customization elements, which, you know, I think are different here vis-a-vis, you know, what's been built in on traditional analog rails.
Okay.
That's very helpful.
I wanted to ask you specifically about this.
I'm glad you brought it up.
They're called intelligent portfolios, and I've heard you make comments about, you know, the intersection.
collision, whatever you want to call it, of AI and tokenization.
How is artificial intelligence or super intelligence involved in these products today?
How might they be in the future?
What does that look like right now?
Yeah, so the branding on these of intelligent portfolios, I think there's, you know, kind of a today thing and a tomorrow thing, you know, from a today perspective.
You know, these are intelligent in the sense that, you know, the first portfolios were built by professional allocators.
You know, as you mentioned, some of the portfolios are powered by BlackRock, the world's largest asset manager.
So there's an intelligence layer in the composition.
The second is the intelligence around the programmability piece.
Right.
So these run on smart contracts.
So the invest.
divest, rebalance, that all happens automatically through the smart contract.
So there's an element of intelligence vis-a-vis the smart contract.
And then how we constructed these is different than how vaults are constructed today or other on-chain portfolio strategies.
There's actually a custodian here that custodies the underlying asset.
So a qualified custodian.
holds the underlying composition, which we think is, you know, an intelligence improvement on, you know, some of the current structures in the digital asset realm.
As it relates to the go forward, you know, there's a connotation that you can pull on there with, you know, this is the asset.
but artificial intelligence, which will be the intelligence layer to power, you know, this will be the asset or the value transmission layer that is going to intersect with that intelligence layer.
And so we're kind of laying the breadcrumbs there to the intersection with AI in terms of how this product line is named.
Gotcha.
Okay.
Yeah, that's really helpful context because people use the word intelligent and it always means different things and the future can be different than today.
So helpful context on that.
I do want to ask about this.
The branding on these says powered by BlackRock and BlackRock and Ando have had kind of a longstanding relationship.
Tell us a little bit about BlackRock's involvement with these products, what that partnership has been like and what the nature of that relationship is today.
The launch of intelligent portfolios started with seven capabilities that really span income capabilities.
Three of them are oriented there.
Two of them are thematic.
So think of like an AI portfolio.
a mag 7x with crypto and then two of them are growth oriented growth strategies.
The other way you can think about this is by the powering of them.
And so as you pointed out, three of the portfolios are powered by BlackRock in that BlackRock provided the investment strategies.
So they did the asset allocation, the security selection.
They did the waiting for uh three of the the ondo intelligent portfolios and so you know blackrock is obviously the largest asset manager in the world um you know i think if what that means to me is you know they are having the most client conversations they're closest to what's happening in the market uh they're picking up on trends and obviously they've been a tremendous you know organization in terms of innovation and being client led in the products that they develop And, you know, their work here indicates to me that, you know, they're seeing the direction that we just talked about, this convergence of digital assets and crypto.
And actually, there was a paper that they issued last week called the.
the machine economy which talks about this convergence of AI and digital assets and so three of the portfolios are powered by BlackRock I think you know they're clearly very forward looking on where this industry is headed and you know it's been great to be in market with three of these portfolios that are powered by BlackRock.
Gotcha.
Awesome.
So that's a helpful context there.
BlackRock, I believe, is the first strategy partner you've had on these, but Ondo could very easily bring in more.
How do you see that happening?
Are there other asset managers you'd like to see engaging with these products as well?
Is that a focus for you in terms of growing the product?
And talk to me about that.
Yeah.
So again, using that ETF analogy here, I mean, you know, this to me was the SPY moment of this market, right?
SPY was just the S&P 500.
You couldn't have done leveraged inverse currency commodity, you know, smart beta, single stock.
You couldn't have done all of those things until you had done SPY.
So we view this as the starting point.
This first capability set is a passive allocation.
Where I think this will go is you'll see capability that is actively managed.
You'll see the combination of perpetuals and prediction markets and options.
all packaged into a single intelligent portfolio.
You'll see more managers.
You'll see some of the world's greatest asset allocators and risk managers and portfolio managers powering intelligent portfolios in the future.
And so that's where we think it's headed.
There's probably a day where...
through a different platform, you know, anybody would be able to spin up a portfolio to offer.
But at the, you know, our focus right now is really on curating best in class asset managers and asset allocators to bring that capability to people that, you know, may not have had access to that in the past.
And so that's where we're focused today.
This was the starting point.
That lineup is certainly going to progress, you know, across that paradigm that I described.
Okay, so definitely sounds like more to come there.
John, I think a great question to ask about this is just who is actually managing the portfolios?
Because, you know, you see intelligent portfolios, you could think maybe AI is running it, you see powered by BlackRock, you think maybe BlackRock is running it.
Is it Ando?
Is it the user themselves?
Talk to me about who's actually managing the portfolios day to day.
And, you know, if I'm a user engaging with these products, who's running my money, basically?
Yeah, yeah.
It's a great question.
So maybe I'll describe the workflow.
So I'll use Mag7X as an example here.
So the ticker is Mag7XON for Onbo.
John, you would come into this product in stablecoin.
So you would deliver USDC to the smart contract.
So your wallet would interact with the smart contract.
That USDC...
you would receive instantly MAG7x token.
So if you were buying $1,000, you deliver $1,000 of USDC and you would receive the MAG7x token right at that instant.
Behind the scenes and mechanically and programmatically, that $1,000 is going to interact with the smart contract, which has the methodology for in this case, investing that capital.
And so instantaneously, the smart contract would be executing the underlying basket.
So in this instance, it would be buying the seven MAG7 stocks plus Ibit and Etha, the Bitcoin and Ethereum.
Those tokens would be delivered, again, instantaneously to the qualified custodian, and you would be now long MAG7X tokens.
So this is an automated process as it relates to the smart contract.
There's a tremendous number of checks and balances that are done on chain to ensure the security and kind of quality of that.
But ultimately, this is machine run.
There are humans that are watching the process and ensuring that everything is working efficiently, but the actual movement is all automated.
And so when you think of what that means, vis-a-vis traditional structures, you're taking a lot of the human element out of this, right?
And so that enables us to deliver these.
lower cost structure than traditional vehicles.
It takes a lot of the middlemen out of that equation and streamlines the process for the end investor.
And that's ultimately what onto intelligent portfolios are doing.
Okay, I think that's very helpful context because these new products can be sometimes confusing.
So just hearing the machinations of how it works, I think is helpful.
John, I want to talk about the tokenization race because there are a lot of other players in this race.
There's a lot of other people competing for capital, for market share, and equities and treasuries.
There's a lot of different asset classes at play too.
Let's just start with treasuries.
Like we said at the beginning of the show, you guys crossed $4 billion in TVL.
You're still the biggest tokenized treasury platform.
You're ahead of Franklin.
You're ahead of Cirq.
BlackRock, many others.
How have you guys been able to reach and maintain such a dominant position on tokenized treasuries?
What's giving you that advantage in that marketplace, in that asset class?
Yeah.
So look, I think it's very much a, I wouldn't call it competition, right?
I think that in a lot of ways, it's a coopetition, right?
We're actually working very, very closely with all of the names that you just mentioned to pioneer this category together.
So in the case of OUSG, which is our US Treasury Fund available to US investors and USDY, which is the permissionless Treasury product for folks outside the US.
You know, some of that capital is actually managed by some of the names that you just mentioned.
So it's really been about, you know, combining our technology and our ability to develop technology, you know, with their expertise in capital markets.
And, you know, we are, as it relates to kind of the rankings that you mentioned, you know, number one in tokenized Treasury.
is number one in tokenized stocks and ETFs, but it's really hasn't been about being number one.
It's really been about empowering investors.
coordinating that with the existing ecosystem to deliver a better capability set for investors.
The product has to be better.
If there's switching costs or in this example, new learnings and new technologies, the product has to be that much better for people to come to it.
And we've approached it by really partnering with the various elements of the ecosystem to develop something that is better for end investors.
And that's kind of our North Star is really about.
Is this better for end investors?
Gotcha.
Okay.
So you're focusing on good products and coopetition.
I'm trying to start a fight, John, but coopetition is a good way to frame it.
Let's talk about tokenized stocks because this has gotten very crowded, right?
Like there's Robinhood, Coinbase, Binance is also a big competitor in this space.
And a lot of these platforms have very large distribution networks through their users they already have.
Talk to me about the tokenized equity space and how Ando plans to differentiate itself and continue to thrive and grow despite all this competition that's in this space.
Yeah, look, I think the competition is fantastic.
And I think that, as you've pointed out, we're in the very, very early stages of this market.
And so I think we'll really worry about competition when this market has matured.
But at this point, there's so much education that has to happen.
There's tremendous uncertainty out there as it relates to these products.
There's a giant education gap.
that needs to be closed.
And so as more people come into this market, that's going to alleviate that burden as we collectively educate the end user.
And the model that we pioneered as it relates to stocks in the early days was very much critiqued by others in the market.
And now we see it as a point of validation.
Nearly every other issuer of tokenized stocks has kind of followed the model that we pioneered which tells us that the strategy that we deployed was the effective one despite a lot of naysayers in the early days and some of the most outspoken critics of this model.
you know, have, you know, capitulated to this model because it works.
And so, you know, what I would say is more competition is good for this space, just as the ETF market.
Again, when I started, there were three issuers.
I think there's over a thousand issuers today.
They're all growing.
They're all, you know, prospering because it's a very large market.
And the more education that can happen collectively, you know, the better for the product line.
And I think we're in that stage as it relates to stocks vis-a-vis, you know, we're doing to compare that to others.
As I talked about, we've been building sequentially.
We started with treasuries, then stocks, then perps, now onto intelligent portfolios.
Each of these things build on top of each other and we are kind of snapping these Lego pieces together.
to create better solutions for clients.
And so as it relates to our moat and kind of where this will be longer term, there are capabilities that only we can deliver at this point in time.
And we'll continue to do that with an eye towards adding value to end customers.
At the end of the day, capital is going to flow to where it's treated best.
And our focus is on building capabilities that empower investors globally.
You know, one of the weird things about crypto is that the longer you're in it, the more accounts you seem to end up with.
You buy in one place, trade somewhere else, earn yield somewhere else, and if you actually need capital, you end up having to sell something that you probably wanted to keep.
That's why we at Milk Road are partnering with Nexo.
These guys keep the whole thing under one account.
You can buy, trade crypto, earn interest on what you already hold, and even borrow against your capital without having to sell it.
All in one spot, all in one account, all on Nexo.
So if you need liquidity, but you don't want to give up your position, or you're already holding crypto and you want to be able to do more with it, I think Nexo is worth your time.
We love working with them.
I think you will too.
Tell them Milk Road sent you.
I think this maybe segues into a question that I had in mind, but just like so people understand, there are different versions of tokenized products.
They're not all...
created the same way.
They're not all brought to market the same way.
Just so people understand Ando's offering.
For example, if I'm a taxi driver in Brazil and I buy some Apple stock on Ando, what do I actually own?
Is it the same thing that an investor on Wall Street would get if they bought Apple in the legacy system?
Is it a different product that has different rights?
What are the distinctives that are different?
What is the same?
And what is Ando's product actually offering when they bring this to market?
Yeah.
So, you know, using this example of the taxi driver in Brazil, right, that maybe has an Apple phone and has, you know, followed U.S.
capital markets for a long time, but has been excluded from, you know, this market in certain capacities.
You know, in the first instance, this is about them getting access to the world's most innovative companies.
Right.
And what have produced, you know, tremendous returns from an investment perspective.
This taxi driver in Brazil buying one share of, we'll say, Apple on a, you know, that would be the tokenized version.
What actually happens there is, again, they would deliver stable coin instantaneously.
We are acquiring a share of Apple.
That share of Apple is sitting in an entity.
An equity linked note is issued.
So the actual thing that this taxi driver would own is a token that is an equity linked note that seeks to provide the economic return of Apple stock.
And so some people ask, well, how do I know that you hold the shares of the Apple stock?
You know, each day we actually or we don't.
We have a third party that's unaffiliated with Ondo, a trust company that looks at that account and produces a daily attestation report showing every position that we have.
So anybody could see that we are fully collateralized every single day.
And so, you know, it is providing the economic seeking to provide the economic return of Apple stock.
I think to your point, it doesn't have all of the rights that.
you would have if you had owned Apple in the U.S.
But what we have seen is this particular capability has found product market fit, very, very fast adoption, which tells us that there is an audience of people that really are seeking the economic participation and are okay without having all of the rights that would come along with holding the stock outright in the U.S.
Okay, perfect.
Just really helpful context on that.
John, I want to talk about some of the critics because you've alluded to a few times, like in the early days of ETFs, there were a lot of people who you wouldn't have guessed would be opposed to ETFs who were opposed to it and vocal.
One institution that caught my attention was the IMF.
They recently said that tokenized stocks are much more volatile than their non-tokenized counterparts.
raising fears and concerns about the volatility of these markets and them unwinding really quickly and things like that.
How do you respond to critics like this who say things like this advancement in tokenization is actually going to bring more and different kinds of risks that are not worth taking on?
What is your reaction to that?
And how do you deal with an institution like the IMF putting that out into the market?
Yeah.
So again, I think that we have to decompose that statement.
to the idea that there are different models as we talked about.
And we are seeing most of the market converge on the model that we pioneered with this instant liquidity, leveraging traditional financial liquidity.
That's what we built this model on.
There are other models that are not constructed that way.
And the stock does decouple.
you know, at certain points in time.
And there is higher volatility.
But to say that all tokenized equities, you know, create higher volatility or less liquid, I think we have shown through the data set on our capability that that's not necessarily accurate.
So again, reminds me of, you know, 20 years ago in ETFs when, again, you know, leveraged in inverse ETFs were going to increase liquidity in the market.
And, you know, that was going to ruin.
the U.S.
capital markets, we've seen that that didn't play out.
Reminds me of when passive ETFs were growing, that it was going to ruin capitalism.
That didn't necessarily play out here as well.
So it's something that, look, we certainly take for it's important to look at.
This is the IMF.
I wouldn't dismiss it, but I think it's also important to unpack it.
And I think that that statement may have been related.
to other models which have diverged significantly in underlying price and have had higher volatility because of the way that they're constructed.
We leverage TradFi liquidity and in that model, we have not seen that and we measure that very, very closely every day.
I'm very diplomatic of you.
Well done, John.
Okay, I want to ask a question about the US because as we discussed, most of Ando's products are for investors outside of the US right now.
I think in August, you made a comment saying that there was, quote, a path here in the US.
The Clarity Act failed, but the SEC and CFTC have been very forthcoming with supportive regulation, innovation exemption.
Just give me a quick touch on what your outlook is for US markets and trying to bring Ando products onshore in the US.
What does that look like for you right now?
would say like, look, on the back of Clarity Stalling Out, it was very, it was great to see the SEC move quickly with the innovation exemption.
And we hope that the SEC continues on that track.
You know, I think this is very much a starting place, you know, and at Ondo, we have the licenses, registrations, the infrastructure, you know, to turn this on in the US.
We've got a broker dealer, a transfer agent, an RIA, you know, we have the licenses and tech staff to do that.
But I'll go back to you know we want to make sure that what we roll out is not just a re-platforming you know of the existing world for the sake of doing it right we want to make sure that it's actually an improvement and that it truly adds value you know to customers and so we don't want to see the features and the benefits that helped us find product market fit outside the us fall away with customers here in the US.
And so we're studying this very, very closely.
We're talking to clients, we're validating the models that we've seen success with in other markets.
And we're watching the US market very, very closely.
And when the time is right, we'll announce our plan here.
And ultimately, we want to make sure that it's a step function improvement on capability that is currently available or relative to what's currently available here today.
Gotcha.
Well, I'm trying to get you to spill the beans, but we'll just keep an ear out for more information on that.
It's all ongoing.
I understand that.
John, we're getting close to time here, but I want to get your thoughts on the outlook here because the institutional bull run in crypto and digital assets has been very strong.
It seems like Wall Street is moving in this direction as sort of a breakneck speed.
What is the next steps look like?
What is the end of 2026 look like?
What are you watching for?
Just give us a little bit of the roadmap ahead from your seat.
Yeah, look, I think that if you just take a big step back, if this technology is better, faster, cheaper, more accessible.
Every market that has digitized through time has gotten bigger.
It has gotten more efficient.
It has got more accessible.
Costs have come down.
I think we're going to see that play out with this technology.
In terms of when, ultimately, this isn't a big bang moment where we wake up and everything is done.
This is going to be a progression over a period of time.
We're seeing the early signs that this technology is truly disruptive and innovative.
If I forecast out, I won't put a time on it, but at some point, all assets will be on chain.
I think this market is over $100 trillion in time as all markets move on chain, all assets move on chain.
You intersect that with what we talked about on AI earlier.
AI is probably kind of the front end to markets at some point.
And I think you move from...
you know, individual decisions to, you know, people thinking about, you know, more outcome oriented and goals based thinking that the AI ultimately, you know, gets them to that outcome.
If the technology is better, it will prevail.
There are certainly a lot of incumbents and legacy technologies that don't want to see this happen.
But in time, as I said, on the front end, you know, capital will flow to where it's treated best.
And it's just a function of time.
you know, for this to fully unlock everywhere.
That's wildly bullish.
And I agree with you on all of this.
John, something I hear a lot from our community is sort of like this dislocation that's happening and frustration because a lot of our audience are self-directed investors who are very market savvy, very paying attention and see that future that we're moving towards.
And I do think Wall Street is moving as fast as it can.
However, it feels like it's taking a really long time.
And I'd love to hear your perspective on that.
Like, what would you say to people who are maybe feeling frustrated or impatient with what's playing out here?
And how do you manage it?
motions through a big change in the markets like this.
What's your outlook on that?
Yeah.
So when I started in the ETF market, I thought, wow, this is such a superior technology for delivering investment returns to what's currently available.
By next week, everybody's going to figure this out and ETFs are just going to be the biggest thing.
And a week went by and it was a couple of dollars came in.
And we have to think that technology is 33 years old.
And mutual funds are still larger than ETFs, right?
Despite being a far superior technology.
And so, you know, this does take time because in finance, there's switching costs, there's capital gains, there's taxes.
You know, you can't just instantaneously change the asset base.
I do think it's going to happen a lot faster here, though, because you will be able to actually switch the.
um you know the form factor i think you take one of these things out of the equation meaning you know today you could deliver stock uh to our our broker dealer and receive tokenized equities on the back end and keep the same cost basis so like one of the major frictions that was you know uh uh in in the migration from mutual funds etfs was taxes um you are going to see much wider on ramps open uh whereby people will transition entire portfolios you know from kind of the analog world to the digital world but retain the same cost basis potentially.
So I think this will be faster.
What I would say is this is happening, it's speeding up, and it's going to happen a lot faster than the 33-year progression that I had there.
For folks that see it, there's ways to capitalize on this from an investment perspective.
But look, patience is a critical, patience and emotions, I should say.
You touched on both of those.
are probably the most important part of investing, right?
And so another element of where I think AI will be very valuable is taking the human emotion out of investing and being more pragmatic about it.
I think we'll see a future that's powered in that way as well.
John Hoffman, Managing Director and Head of Portfolio Products, Ondo Finance.
Thank you so much for being on Milkard Crypto.
I really enjoyed this conversation.
I know our audience will too.
Where can we send people to find more of you and your work online?
Yeah, so I'm John Hoffman 2038 as my X handle.
For more on Ando, Ando.finance, you can certainly learn more about the capabilities and what we're doing.
And John, I really appreciate the time here.
It's fun to be on a program that I listen to.
I'm very flattered that you listen to the program.
Keep it up.
I'm going to keep following you as well.
And yeah, man, I'm really excited to have you back in the future and you kind of catch up on what Ando's doing and how all this is playing out.
So thank you so much for being here.
Thanks, John.
And thank you all for joining us.
I hope you all learned something today.
I know I did.
So until next time, stay safe, stay educated, stay bullish, and we will see you all on the next episode of Milk Road Crypto.
Thanks for being here, everyone.
Bye.
Everything you hear on Milk Road is for informational purposes only.
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