Hi everyone. Um so you know I think uh as an industry right we uh go through a lot of like cyclical trends right and uh there's always this question of is it hype is there substance right but we do have things that persist right and uh I think uh right the original thing that that kind of uh got persistent traction right was DeFi um and I think it's becoming clear that, you know, tokenized assets have crossed uh kind of the the chasm, right? This this valley of death, right? Uh where it's looking like they're they're here to stay. And so, um rather than just like, you know, pontificate uh about this, you know, at you, I'd rather, you know, show you some of the the hard numbers, right?
So a year ago um I was at one of the stable summits and I said that tokenized assets are going to be the catalyst uh for scaling DeFi from billions to trillions. And so uh you know sitting here today uh you know looking at the growth um I I think I think this claim is going to turn out to be true. So uh right now right DeFi TVL is currently at around 110 billion. Um however of that 110 billion uh 12.7 billion around is in tokenized assets.
Now tokenized assets specifically as a whole right not just those uh utilized in DeFi but just issuance alone is at 24 billion which is up from 5 billion in 2022. Um so the the rate of scale there is is incredible. Uh now if we break down that 24 billion number uh we see that this is primarily led by private credit. Um, and so this kind of surprises people sometimes I think because uh what's usually the most visible are kind of these tokenized money market funds right tokenized uh treasury bills right like uh um Dennis mentioned earlier right like uh MT Bill um right uh and you have you know your biddles and your your uh superstates right and and your centrifuges right uh your Franklin Templetons um you know these are very in face. But actually, right, in terms of size, the tokenized treasury market is only 7.
5 billion, right? The private credit market is almost uh two times bigger. Uh and we'll we'll go into a little bit more of this uh soon. So, where are commodities? Um commodities are small um but growing.
Um primarily commodities right now is driven by tokenized gold, right? And so uh you know we have Pax G right which is from Paxos that is uh I I believe you know um three four five years old um at this point. Uh but you recently saw the introduction of of Tether um you know issuing um their own kind of goldbacked uh tokenized asset um and that is also kind of seeing rapid growth. So we should expect commodities to take a larger and larger share of the pie uh than they have um uh in in the past year or so. Um equities uh this seems to be like the dead horse that people have uh you know usually pointed to.
Oh, we're going to like tokenize the stocks and you're going to be able to buy like a share of Tesla or Amazon or SpaceX on chain. Um there does not seem to be much demand uh for this or you know another way to phrase it might be the regulatory red tape has uh been too too restricting. Um but right now equities are summing to kind of less than 300 million um in in terms of issuance. So very little issuance and very little adoption thus far. Now I want to take a look at the micro real quick.
Right. So, um these are all year-to-ate numbers. Uh Black Rockck's Bidd is up 343%. Uh Superstate, right? USB, another uh kind of tokenized money market fund, uh up 277% year-to- date, right?
Ono USG up 318%. Um it is clear that uh you know, treasuries are are growing at a at a break neck speed. Um, taking a look at private credit, uh, you have something like Maple, right? Syrup USDC. Uh, private credit is also up 204%.
That's year to date, right? We're only in June. Uh, if these numbers continue, right, we're looking at, you know, order of magnitude level growth over over the course of the year. Um, right. And and lastly, right, even Paxos, right, uh, holding up the the commodity side, right, is up 70% year to date.
So, um, issuance is great, but what does integration into DeFi look like, right? Like, there has to be a reason that we're tokenizing these assets, right? There has to be, um, you know, utility that we can get out of introducing tokenized assets into the money Legos of of DeFi. Well, um, in terms of pioneers, right, you're starting to see players like Sky and and Spark, right? uh diversify uh their their book uh into tokenized assets, right?
And so this has primarily been the uh driven through um acquisition of of kind of Treasury bill uh tokenized asset products. Uh but they're now extending into private credit and you know uh Grove is an example of a a new subdow that was just announced yesterday, right? that is going to be focusing specifically um on on private credit solutions and we'll introduce about I believe like one to to two and a half billion um in in growth o over the next uh year or so. So all in all that is to say right these tokenized assets are growing right issuance is growing uh and you know we're seeing integration into DeFi um but there's still something that's holding us back and there is a danger here that if we don't do this the right way you know we can really destroy some of these foundations that DeFi is is built on right and this problem is that tokenized assets are not cryptonative Um, what this means, right, is that the token itself is just a wrapper around the underlying asset. And this presents kind of several challenges when trying to uh do responsible risk management um especially in uh the automation kind of framework that we've come to expect in in DeFi.
So um this primarily plays out in a lack of transparency right uh metadata is not readily available and the data that is available doesn't necessarily have kind of strong uh guarantees of of correctness right and so um you may have you know the aggregate amount of reserves published but you may not know what the actual ual reserves are right um you may get periodic snapshots right over the course of a quarter or maybe annually or semiannually right but it's not this real time kind of stream of of metadata which is what DeFi protocols need uh to be able to uh appropriately handle tokenized assets at scale and so what we're seeing right now is that yeah you know we have uh right we we pointed out earlier right there's uh somewhere around 10 billion in tokenized assets uh integrated in DeFi right now um but the majority of that is right being manually managed right and if we really want to um kind of kick this up a notch right in terms of growth uh this is where we're going to have to kind of solve this problem and so um right it is this metadata that we need right to context these tokenized assets. And so that's kind of at Chronicle. Oracle specifically for tokenized assets, right? And the important thing here is not just, you know, the price of of the token, right? That this seems to be like the the thing in DeFi, right?
Where we obsess over the price, the price triggers the liquidation, right? And we call it a day, right? um an oracle for a tokenized assets needs to be much more expressive, needs to be able to uh have much more data, needs to be able to uh feed that data in a very dynamic type of way and that actually becomes very challenging from uh from an Oracle perspective in particular from a from a gas point of view. So um don't want to uh shill too long on on this point um but essentially right when you are what you should be looking at in a tokenized asset is that you're not getting data directly from the issuer uh you know the issuer has some degree of of moral hazard right and and presents kind of counterparty risk. Ideally, you really want to be at the custodian level where you have like the inside look at the reserves in in near real time, right?
Um this data can then be streamed, right? uh in a kind of cryptographically tamper-proof manner uh to any chain. And this is what is going to allow DeFi protocols, right, to uh responsibly kind of uh manage their their exposure to these uh to these tokenized assets, right? Um I I think people are underestimating right the risk that tokenized assets can uh can have. Um I and I think it's kind of this uh there there's a real danger that you know a major DeFi protocol you know could go insolvent um if we don't start uh being much more serious about risk management uh when it comes to them.
Um I think if you look at the history of of private credit in in DeFi right uh there's been several instances right um in particular right when when Alamita went down of you know protocols losing you know 50 million uh plus right and even uh some of maker's early early experiments uh with private credit right uh as well experienced uh you know losses in the millions that you know fortunately Maker was able to plug because of the the sheer you know scale of revenue that it generates. Um, but I I worry, you know, that uh, you know, we we are kind of sleepwalking and just saying, you know, growth at all costs is good and and not necessarily going back to dot our eyes and cross our teeth. So, I I leave you with this. You know, I think tokenized assets are are, you know, an amazing innovation that that we should all be adopting and are going to change kind of the face of DeFi. Um but please you know take a step back um be responsible you know let's build a sustainable ecosystem okay thank you so much appreciate [Applause]
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