Podcast Summary: The Wolf Of All Streets
Episode: Wall Street’s Big Crypto Bet – The Truth About Tokenized Securities | Michael Sonnenshein
Host: Scott Melker
Release Date: May 18, 2025
Introduction
In this episode of The Wolf Of All Streets, host Scott Melker engages in an insightful conversation with Michael Sonnenshein, the Chief Operating Officer of Securitize. The discussion delves deep into the burgeoning field of tokenized securities, exploring how traditional Wall Street institutions are embracing blockchain technology to revolutionize asset management and investment strategies.
Tokenization of Securities: Current Offerings
Michael Sonnenshein opens the dialogue by clarifying Securitize’s focus:
"We are not going to tokenize everything. And I think when a lot of folks think about tokenization, you know, hopefully more folks are thinking about securitized than ever, but we actually just focus on tokenizing securities." [01:15]
Securitize has successfully tokenized a variety of securities, including treasuries, private credit, venture capital, and public equities. A flagship product discussed is Biddle, a tokenized treasury fund developed in partnership with BlackRock.
Advantages of Tokenization: Liquidity and Yield
One of the standout features of tokenized securities like Biddle is the ability to offer daily dividends and 24/7 liquidity, a significant improvement over traditional investment vehicles:
"The fact that you can own Biddle and get that payout on a daily basis means you get immediate access to capital as an Investor. You also get 24,7 liquidity." [05:31]
Michael explains that tokenization facilitates real-time tracking of ownership through blockchain technology, enabling seamless distribution of dividends and enhancing compounding benefits for investors:
"No, no, no. It improves the compounding. Right. So if you're, if you reinvest those dividends on a daily basis, for sure." [06:14]
Institutional Collaborations: BlackRock and Beyond
A significant portion of the discussion centers around Securitize’s collaboration with major institutions like BlackRock. Michael recounts the partnership's inception and its impact:
"We started working with BlackRock, call it about 18, 20, 24 months ago. And really the thought was working on bringing a tokenized treasury, you know, money market like fund to market." [02:42]
This collaboration has not only validated Securitize’s offerings but also demonstrated the scalability and attractiveness of tokenized securities to large asset managers.
Expansion into DeFi and New Products
Securitize is expanding its utility by bridging tokenized securities with Decentralized Finance (DeFi). Michael introduces S Tokens, a construct that allows investors to engage in various DeFi strategies using their tokenized assets:
"Investors are essentially buying assets from Securitize... and they are able to actually vault that asset to be able to then mint a tracking asset or another asset on top of it." [24:17]
This innovation enables investors to earn additional yields on their existing investments, thereby enhancing overall returns.
Building Converge: Securitize's Blockchain Initiative
To further support institutional DeFi activities, Securitize is developing its own blockchain named Converge, in collaboration with Athena. Michael outlines the rationale behind this initiative:
"We think Converge can really be this, this kind of substrate, this, this common denominator for institutional defi." [26:57]
Converge aims to provide a highly performant platform tailored for institutional-grade DeFi applications, ensuring scalability and security.
Regulatory Environment and Industry Outlook
A pivotal part of the conversation addresses the evolving regulatory landscape. Michael highlights the positive shift in regulatory attitudes towards crypto:
"It's been really great to have that open dialogue and be able to talk openly about projects and spitball ideas." [20:53]
He emphasizes the importance of collaboration with regulators to craft sensible frameworks that support innovation while ensuring compliance:
"Let's continue to work collaboratively with them to create sound frameworks." [46:03]
Future of Tokenized Securities and Democratization of Investments
Looking ahead, Michael envisions broader adoption of tokenized securities beyond large institutions:
"If you have X amount of treasury as a dao... there's probably some other portion of your balance sheet that you may be comfortable with perhaps being not as liquid." [31:27]
He anticipates that advancements in tokenization will democratize access to high-yield investment opportunities previously reserved for accredited investors, thereby leveling the playing field for retail investors.
Personal Insights and Industry Evolution
Reflecting on his decade-long journey in crypto, Michael shares his perspective on the industry’s growth:
"We've just continued to kind of persevere and keep building. So, yeah, I think we're infinitely further along than anyone could have even dreamed." [48:54]
He expresses optimism about the future, noting that the foundational infrastructure for tokenized securities is firmly in place, setting the stage for unprecedented growth and innovation.
Conclusion
The episode concludes with a reaffirmation of the transformative potential of tokenized securities. Michael underscores the synergy between traditional finance and blockchain technology, advocating for continued collaboration and responsible innovation to unlock new investment horizons.
"2025 is definitely shaping up to be a very exciting year for growth across the ecosystem, tokenized securities and certainly beyond." [43:59]
Subscribers and interested listeners are encouraged to follow Michael and Securitize for ongoing developments in this dynamic space.
Follow Michael Sonnenshein:
- Twitter: Unshine
Learn More About Securitize:
- Website: Securitize.io
This summary encapsulates the key discussions, insights, and forward-looking statements made by Michael Sonnenshein during his conversation with Scott Melker, providing a comprehensive overview for those interested in the intersection of Wall Street and cryptocurrency.