tl;dr
Rob Hadick of Dragonfly warns that while tokenized equities could revolutionize traditional finance, institutional control over blockchain infrastructure might undermine crypto's decentralized vision, creating a rift between Wall Street and the broader crypto ecosystem.
**Tokenized Equities: A Boon for Traditional Markets, a Question for Crypto?**
Rob Hadick, general partner at crypto venture firm Dragonfly, believes tokenized equities will significantly impact traditional financial markets but may not deliver the transformative benefits many in the crypto space have anticipated. Speaking at the TOKEN 2049 conference in Singapore, Hadick highlighted that while institutions are eager to adopt blockchain-based trading, their motivations and infrastructure choices could limit the broader crypto ecosystem’s gains.
**TradFi’s 24/7 Advantage**
Hadick emphasized that tokenized equities could revolutionize traditional finance by enabling 24/7 trading and improving economic efficiency. “They want 24/7 trading, it’s better for their economics,” he said, noting that financial institutions are pushing the U.S. Securities and Exchange Commission (SEC) to approve blockchain-based stock trading. This shift, he argued, reflects a desire for greater flexibility and reduced reliance on traditional market structures.
**Institutions Seek Control, Not Crypto Ecosystem Integration**
However, Hadick raised concerns about the implications for crypto. He pointed out that institutions like Robinhood and Stripe are building their own blockchains rather than relying on general-purpose networks like Ethereum. “They don’t want to share the economics. They don’t want to share block space with memecoins,” he explained, adding that control over privacy, validator sets, and execution environments is a top priority.
This trend could create “leakage” of value away from Ethereum and other major crypto networks. If financial institutions opt for layer-2 solutions or custom layer-1 blockchains, the flow of capital and utility back to the broader crypto ecosystem may diminish. “If they build their own L1s and L2s, it becomes a little less clear how value flows into the rest of the crypto ecosystem,” Hadick noted.
**The Hybrid Chain Dilemma**
While private permissioned blockchains have historically struggled, many institutions are now gravitating toward hybrid models—combining controlled environments with permissionless features. Hadick described this as a middle ground where companies maintain sovereignty while still engaging with blockchain technology. However, he cautioned that such approaches may not align with the decentralized ethos of crypto, potentially sidelining projects like Ethereum.
**Contrasting Visions**
Hadick’s skepticism contrasts with the optimism of figures like Fundstrat’s Tom Lee, VanEck CEO Jan van Eck, and Consensys founder Joseph Lubin, who argue that Wall Street’s adoption of blockchain could fuel Ethereum’s growth and elevate the broader crypto market. Yet, Hadick’s perspective underscores a growing divide: while tokenized equities may democratize access to traditional assets, their integration into the crypto space remains uncertain.
**SEC’s Role and Market Realities**
The SEC’s push to permit tokenized stocks on crypto exchanges signals a regulatory shift, with major players like VanEck and the New York Stock Exchange engaging in discussions. Nasdaq recently filed a rule change to list tokenized stocks, reflecting the sector’s rising profile. However, tokenized equities remain a small fraction of the real-world asset market, with only $735 million in onchain value—2.3% of the total, according to RWA.xyz.
**Looking Ahead**
As the race to tokenize traditional assets accelerates, the interplay between institutional priorities and crypto’s decentralized vision will shape the future. While tokenized equities promise efficiency and innovation, their success may hinge on whether they bridge traditional finance and crypto—or carve out a separate, self-contained path. For now, the jury remains out on whether this evolution will be a win for all.