Ben Strack

This is a segment from the Forward Guidance newsletter. To read full editions, <a href="https://blockworks.co/newsletter/forwardguidance" target="_blank" rel="noreferrer noopener">subscribe</a>.



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At the TokenizeThis conference in New York this week, I had the pleasure of moderating a conversation with executives from Dinari and STOKR on the potential for tokenized stocks.&nbsp;



I also caught a panel on the retail adoption of <a href="https://blockworks.co/news/stablecoins-tokenization-blackrock-galaxy-das">tokenized real-world assets</a> (RWAs) more broadly. The headwinds, tailwinds, what have you.



First things first: Stablecoins (primarily tokenized dollars, so to speak) are a nearly $230 billion market. Outside of that, onchain RWAs currently amount to $18.5 billion, RWA.xyz <a href="https://app.rwa.xyz">data</a> shows.&nbsp;&nbsp;



A recent report from Bitwise called Q1 “the best worst quarter in crypto’s history.” While asset prices fell, stablecoin market cap hit a new high and tokenized RWAs grew 37% quarter over quarter. Not to mention <a href="https://blockworks.co/news/sec-actions-timeline">regulatory progress</a>.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeXir0e-iHsrAEMugU0sgDEZRs2vC2kEYXV1ksIC6FqzK7pMWt_o3ri9GOnAQpMlkjAtzNDaORB5aHuBLaLi5Jr574Y0DI5y3CxvwrYLRoVr2PAzxf7dEqfTmems_AM5P9OXrRCpg?key=Twgt7dj90D-YE00D-_r3ls6g" alt=""/><figcaption class="wp-element-caption">Source: Bitwise</figcaption></figure>



You can see that big chunk in private credit, and the other substantial piece in the US Treasury debt category. Included in that is BlackRock’s tokenized money market fund, BUIDL, which recently hit the $2 billion Assets Under Management (AUM) mark.



<a href="https://blockworks.co/news/stablecoin-legislation-top-priority">Expected legislation</a> in the US that “allows on-ramps and off-ramps to proliferate” will be crucial, Neoclassic Capital managing partner Mike Bucella said on the TokenizeThis stage Wednesday. Stablecoins and tokenized Treasury products will thus be “the foundation” for more creative onchain offerings in the coming years.



“The boring stuff is an absolute necessity, because it exists in the offchain world,” he explained. “If you can’t do that in the onchain world, then you’re not going to sit there and wait for some interesting onchain yield product; you’re going to go offchain into the traditional markets.”



As for where we go from here, Dinari Chief Business Officer Anna Wroblewska argued that after stablecoins and money market funds, <a href="https://blockworks.co/news/dinari-tokenization-rwas-base">publicly listed US stocks</a> offer another easy access point for investors looking to move onchain.



Galaxy Digital tokenization head Thomas Cowan, however, noted the already-solid user experience to invest in stocks on venues like Robinhood. Therefore, he asserted, the next wave of growth could come in “places where there’s a clear lack of transparency [and] settlement risk” — i.e. private credit.



Sitting beside Cowan, 21Shares US sales head Anton Kozlov added that he also sees demand for tokenized private equity — pointing to SpaceX and OpenAI. Blockworks Research analyst Carlos Gonzalez Campo expects shares of such private companies <a href="https://blockworks.co/news/private-company-shares-tokenization">to be tokenized</a> within the next four years.



Crypto custody firm Taurus, in a recent report, pegged the “market opportunity” of fund tokenization at $1 trillion by 2030. While money market funds unlock use cases in collateral management, the report notes, Taurus is also bullish on tokenization within illiquid segments.



“Currently, if an investor needs to sell their stake in a private equity fund with a lock-up period of several years, their bank or asset manager must find a matching buyer through a manual process that can take weeks and relies primarily on emails and paper-based transactions,” the Taurus report states.



So while it’s safe to expect <a href="https://blockworks.co/news/tokenized-yield-funds-complement-stablecoins">stablecoins and tokenized yield funds</a> to continue growing, it remains to be seen which of these other onchain segments will next see big traction.



Meeting investors where they are, though, is a sentiment most agree on.“[Investors] want everything in a single window — kind of like a Robinhood experience — where you can access crypto, you can access stocks, down the road you can access tokenized private credit,” Kozlov said. “That’s the dream.”



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Bitwise

Which tokenized RWA segments will boom next?

Donovan Choy

This is a segment from the 0xResearch newsletter. To read full editions, <a href="https://blockworks.co/newsletter/0xresearch" target="_blank" rel="noreferrer noopener">subscribe</a>.



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In light of all the hype around real-world assets (RWAs) of late, I thought it’d be interesting to look at Ostium.



Ostium is a perps DEX on Arbitrum that lets you trade RWAs onchain. It’s not a new project: The team <a href="https://blockworks.co/news/funding-cryptography-nft-memberships-perpetual-exchangeshttps://blockworks.co/news/funding-cryptography-nft-memberships-perpetual-exchanges">raised</a> $3.5 million in a round led by General Catalyst and LocalGlobe in October 2023, and went live last year. 



What is new, however, is its recently-<a href="https://x.com/OstiumLabs/status/1906755528703066246">launched</a> points program, which has propelled TVL up tenfold from $5.5 million to $53.6 million.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeFfRjxTzVRCGjmRmx4U3mMu5d6IF4FSDgrtueHepbFXAe8RVJ8p-EsIRQxjdqSlmCW0QmPeF9-f2eqydBfrjtMLFfwKGVU54zq-pRjv_FgRPf40UlauIQE9sDICMeOHB8Ru2xUsQ?key=w7QRrfPqFdyJramqJs9xUnjv" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://defillama.com/protocol/ostium">DefiLlama</a></figcaption></figure>



What sets Ostium apart from competitor perps DEXs is its ability to long or short popular market indices (S&amp;P500, Nikkei 225, Dow), commodities (gold, silver, copper, crude oil) or forex (GBP, EUR, JYP) – with up to 100-200x leverage.



Unlike tokenized RWAs, tradable assets on Ostium are synthetic assets, so they’re not actually backed by actual collateral. Instead, asset prices are tracked by oracles. A custom-made pull-based oracle system was built for RWAs, and Chainlink Data Streams are used for crypto assets.



Despite its RWA niche, actively-traded assets on Ostium are generally varied. On its highest trading volume day (April 16), crypto assets formed the largest percentage of assets traded (53%), foreign exchange was 22%, commodities was 18%, and indices was 7%.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdaXeltHMEmZAsFDEfY8kSmOqAjx0vqvefd7BgyLghgmHToboIS9aEhpneLYRMy4SxvYwTZl0gfYn-t1M_YPrUJo3YoZuhXPHj3sTR4bOtf_ospEkxgdIXLif46gNujmCfTMdN_7Q?key=w7QRrfPqFdyJramqJs9xUnjv" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://dune.com/queries/4064767/6859929">Dune</a></figcaption></figure>



In the last seven days, Ostium has <a href="https://dune.com/ostium_app/stats">generated</a> $938 million in trading volume, which translates to about $411k in fees. For context, total trading volume on all Arbitrum DEXs was ~$3.6 billion in the last seven days, based on <a href="https://defillama.com/chain/Arbitrum?volume=true&amp;groupBy=weekly&amp;tvl=false">DefiLlama</a>.



<h2 class="wp-block-heading">Is Ostium the next Hyperliquid?</h2>



Both began as perps DEXs on Arbitrum. But here’s where they differ.



Ostium uses a two-tiered <a href="https://ostium-labs.gitbook.io/ostium-docs/shared-liquidity-layer/overview">liquidity layer structure</a> consisting of a “liquidity buffer” and a market making vault.



This market making vault works similar to Hyperliquid&#8217;s HLP vault, where the relationship between liquidity providers and the platform&#8217;s traders is of an adversarial nature, i.e. if traders win, LPs lose and vice versa.



(This is the same vault that Hyperliquid recently, controversially <a href="https://blockworks.co/news/hyperliquid-decentralization-validator-put">bailed out</a> in the JELLYJELLY memecoin debacle.)



Ostium’s two-tiered design, however, is meant to thwart this zero-sum relationship. Its “liquidity buffer” allows LPs to benefit from growth in trading volume and open interest instead of only trader losses. This way, Ostium LPs and traders are in a win-win relationship (see <a href="https://ostium-labs.gitbook.io/ostium-docs/shared-liquidity-layer/overview">docs</a> for a fuller explanation).



Ostium’s OLP vault is currently offering an above average 28.69% APY on USDC deposits to compensate for the risk of LPs potentially having to act as a counterparty.



The second key difference in protocol design lies in Ostium’s rejection of a central limit orderbook (CLOB) design, popularized by perps DEXs like dYdX and Hyperliquid. This is probably due to the fact that Ostium does not exist on its own L1 protocol, but I may be wrong.



Instead, Ostium opts for a pool-based design. This design solves the obvious problem of liquidity fragmentation and mirrors the price of RWAs offchain using oracles.



Ostium is an exciting project, but it’s still early days for the DEX in terms of trading activity. I’ve heard it described as the next Hyperliquid poised to ride the tailwinds of the burgeoning RWA narrative. That’s a neat mental model, but whether or not crypto traders want to abandon traditional exchanges to trade commodities and forex onchain is a whole other story.



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0xResearch Newsletter

The next Hyperliquid? A look at the RWA-based DEX Ostium

Katherine Ross

This is a segment from the Empire newsletter. To read full editions, <a href="https://blockworks.co/newsletter/empire" target="_blank" rel="noreferrer noopener">subscribe</a>.



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Apollo is doubling down on its push into real-world assets.&nbsp;



And, yes, I know we’ve been talking about RWAs a lot, but there are different layers to what’s being built in this space right now. We have institutions jumping in and out of FOMO, but then there is a group that is arguably crypto native and using this more bullish period to expand their footprints in crypto. This is the latter.&nbsp;



You see, Apollo is betting on Plume, the RWA network.&nbsp;



Here’s what I can tell you: Apollo made a strategic investment of around seven figures (the team at Plume wouldn’t disclose the full amount). The investment follows Plume’s $20 million Series A that was announced at the end of last year.&nbsp;



And, perhaps most importantly, Plume co-founder Teddy Pornprinya told me that the mainnet launch is slated for this quarter. I pushed to get a better sense of the timing, but Pornprinya only affirmed that it was “imminent.”



The team and Apollo have been working closely on ACRED, which is <a href="https://blockworks.co/news/apollo-securitize-partnership-institutional-adoption">Apollo’s offering with Securitize</a>, as well as “other initiatives.”



Apollo’s investment marks the first time it has made an investment into a specific RWA chain. Pornprinya called Plume an RWAfi, which piqued my curiosity.&nbsp;



While Plume’s generally known for its RWA work, Pornprinya said they have a core focus on the DeFi side of things, hence the “RWAfi” labeling.



There are “three core focus areas for us: One is on the infrastructure technology side, two is on distribution, and three is on composability — which is essentially leveraging our DeFi native team to build these different use cases,” he said.



To make RWAs more attractive to users onchain, you have to make them more crypto, Pornprinya told me. Hence the focus on developers and, of course, aiding builders on the go-to-market side of things — a notoriously challenging part of being in crypto. 



Pornprinya told me that, in his experience, Apollo is one of the more crypto-native institutions, especially with Christine Moy leading its charge into digital assets. Instead of evaluating where to go in crypto — like many institutions currently are — Apollo’s “pretty open” to getting involved on the “permissionless side of things” and innovating with RWAs.



“It&#8217;s no longer just holding a tokenized asset and just making passive yield from it. It&#8217;s taking that asset, throwing it into the DeFi ecosystem, and making more use of that asset and unlocking more liquidity for additional opportunities,” Pornprinya said.



By the numbers, Plume has roughly 200 projects currently working with them. They launched an eight-week testnet over the summer, which had roughly 18 million wallets, four million of which were unique. Mind you, that was eight months ago, but it makes me curious about the numbers we can expect out of the mainnet once it launches.



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