Podcast Summary: How I Invest with David Weisburd

Episode E308: The Future of LP Liquidity

Date: February 19, 2026
Host: David Weisburd
Guest: Yuval (Canton Network executive)

Episode Overview

This episode delves into the evolving world of liquidity for Limited Partners (LPs), the potential of blockchain to address illiquidity in private markets, and the operational frictions that inhibit efficiency in institutional investing. David Weisburd and Yuval discuss the roles of leverage, tokenization, and standardization in unlocking new forms of utility for LPs and private asset owners, as well as personal reflections on risk-taking in one’s career.

Key Discussion Points & Insights

1. The Realities and Merits of Leverage

• Leverage is often seen as risky, but, like a mortgage, it’s simply a tool to enhance the utility of one’s assets if used with understanding and discipline.
• Memorable Quote:

  "To me, leverage is just driving utility out of your assets. There could be bad leverage, and there's good leverage." – Yuval (00:52)

Key Points:

• Being professional and aware of the risks can make leverage a useful tool.
• Availability of attractive lending terms depends on the asset class and collateral type.

2. Streamlining Finance With Canton and Blockchain

• Financial services are largely about managing ledgers; current inefficiencies exist primarily due to operational friction across those ledgers and record-keeping.
• Blockchain (and Canton in particular) aims to synchronize these ledgers for capital markets and private assets.

Canton’s Core Focus:

• Announced partnership with DTCC for 24/7 real-time US Treasury movement (01:52).

• Active projects in private equity, private credit, insurance, commodities, and mortgages.

• Memorable Quote:

  "What we're doing is we're focusing on capital markets to begin with ... we just announced with DTCC, the first US treasury that would be able to be available on Canton so you'll be able to move US treasuries in real time, 24/7." – Yuval (02:18)

3. LP Liquidity, DPI, and Tokenization – The Realities

• DPI (Distributed to Paid-In capital) is a huge challenge for LPs, who are increasingly fixated on capital returns amidst private equity illiquidity.
• Yuval notes that tokenization isn't a magic fix—issues of operational inefficiency, not just the ledger structure, drive friction.

Two Big Points:

• Operational inefficiency (slow onboarding, capital calls) is as much a bottleneck as technological limitations.
• Expanding utility for LPs (enabling borrowing against positions, not just outright sales) could change the calculus for managing liquidity.

Memorable Exchange:

"Today the only way for LPs for the most part, to get money out is by selling their holding ... if we increase the utility of these assets and you gave LPs tools to borrow more efficiently against some of their holdings, that's also can alleviate ... I have to get the money out, I have to sell my position versus I can just borrow against my position." – Yuval (05:48)

4. Tokenization of Private Investments: Use Cases

• Example: An LP with a $10M Citadel position could, in theory, borrow against their stake directly if tokenized/custodied properly.
• The challenge today is not legal feasibility but the high operational cost, which makes otherwise attractive loans impractically expensive.

"What we're trying to do is reduce the opex and the friction associated with these products to be just as efficient as, you know, buying and trading equities." – Yuval (07:37)

5. The Challenge of Standardization

• The biggest obstacle to large-scale blockchain adoption in finance isn’t technology per se, but the lack of standardized data models and contracts, especially in private markets.
• Yuval’s team is developing templates to capture the core similarities of various financial contracts, but acknowledges it remains a fundamental industry challenge.

"It's the biggest challenge of the industry ... how do you standardize these contractual agreements in order to have this kind of scaling." – Yuval (08:44)

6. Progress and Transparency Metrics

• Adoption is happening via key clients (e.g., Broadridge with US Treasury repo, Zinnia with life insurance), but much volume reporting remains private due to client confidentiality.
• Daily activity: Tokenized US Treasuries in the trillions, with hundreds of billions transacted daily on Canton (subject to improvement in transparency).

"To date we have seen the digitization or tokenization of a few trillion dollars of U.S. treasuries and activity on a daily basis is in the hundreds of billions of dollars across the network." – Yuval (12:09)

7. Why Financial Inefficiencies Persist

• Technological solutions do not always triumph; persistent inefficiencies often exist because they represent significant profit centers for entrenched players.
• The settlement lag in syndicated loans, for instance, is not due to lack of technology but resistance from those benefiting from the status quo.

"Efficiency is, I always say, friction. You can think of friction as cost. And cost means revenue to someone." – Yuval (13:53)

8. Career and Risk-Taking – Timeless Advice

• The best career advice Yuval would give his younger self: take more risk, especially early in one’s career, because early mistakes rarely carry catastrophic downside but can greatly improve long-term upside.

"I wish I took more risk early in my career ... the trajectory of mistakes you do early on ... creating the right starting point requires taking risk." – Yuval (15:14 & 16:22)

• Discussion of survivorship bias and the tendency of young people to be too conservative.

Memorable Quote:

"Most people are too conservative. So telling people to take risks brings them back closer to efficient frontier ..." – David Weisburd (17:20)

• Closing aphorism on success:

"A students work for B students, by companies founded by C students." – (17:51)

Notable Quotes & Timestamps

• "To me, leverage is just driving utility out of your assets. There could be bad leverage, and there's good leverage." – Yuval (00:52)
• "What we're doing is ... we just announced with DTCC, the first US treasury that would be able to be available on Canton ... move US treasuries in real time..." – Yuval (02:18)
• "Today the only way for LPs ... to get money out is by selling their holding ... if we increase the utility ... and you gave LPs tools to borrow more efficiently against some of their holdings ... I can just borrow against my position." – Yuval (05:48)
• "What we're trying to do is reduce the opex and the friction associated with these products ..." – Yuval (07:37)
• "It's the biggest challenge of the industry ... how do you standardize these contractual agreements in order to have this kind of scaling." – Yuval (08:44)
• "Efficiency is, I always say, friction. You can think of friction as cost. And cost means revenue to someone." – Yuval (13:53)
• "I wish I took more risk early in my career ... the trajectory of mistakes you do early on ... creating the right starting point requires taking risk." – Yuval (15:14, 16:22)
• "A students work for B students, by companies founded by C students." – (17:51)

Important Timestamps

• Leverage and utility: 00:00–01:44
• Canton’s blockchain solution and use cases: 01:52–03:05
• DPI/headwinds for LP liquidity: 03:05–04:48, 04:48–06:54
• Tokenization and operational friction: 06:54–08:14
• The challenge of standardization: 08:14–09:59
• Progress and asset onboarding: 11:18–12:47
• Market inefficiencies and incentives: 12:52–14:58
• Career advice, risk, and long-term trajectory: 15:05–17:50

Summary Takeaway

This in-depth conversation highlights the immense promise—and persistent obstacles—in making LP investments more liquid and efficient. While technology like blockchain can unlock new forms of financial utility, the real bottlenecks are often structural, with operational complexity and vested interests maintaining inefficiency. For LPs and institutional investors, future opportunities will require not just new tools but also new operating models, and perhaps a bit more willingness to take smart risks—both financially and personally.