The "Godfather of DeFi" operates RWA, and the tokenization asset management platform Superstate has raised hundreds of millions of dollars in two years.

Author: Nancy, PANews

Tokenization is becoming one of the few narratives in this round of the crypto cycle that can make Wall Street bow and regulators nod. In this wave of RWA enthusiasm, the tokenized asset management company Superstate, orchestrated by the "DeFi father" and founder of Compound, Robert Leshner, has quietly grown into an important player in tokenization with compliance as its foundation, attracting hundreds of millions of dollars in funding.

has launched three tokenized products, receiving hundreds of millions of dollars in funding support.

Tokenization is becoming a new growth engine for the global financial market, and the trend of bringing real-world assets on-chain is rapidly heating up. From proof of concept to explosive growth on a scale of hundreds of billions of dollars, RWA has attracted Wall Street giants vying to establish a foothold. Amidst this wave, Superstate, which was established just over two years ago, has secured a place in the tokenization market.

Superstate is another venture by Leshner in the crypto industry. He is better known as the founder of Compound, which ignited the liquidity mining craze in June 2020 with its "lending is mining" mechanism, once elevating Compound to the top position in DeFi, with TVL peaking at several tens of billions of dollars.

However, as the DeFi market continues to languish, user activity has plummeted, capital outflows are evident, and TVL is steadily declining. The once-hot on-chain financial ecosystem has entered a cooling period. In this retreat, Leshner chose to leave Compound and turned to the more reality-based RWA track, founding Superstate.

The leaders of DeFi are starting new ventures, and VCs are naturally eager to invest. Superstate completed two rounds of financing in its early stages, with participation from well-known institutions such as ParaFi Capital, 1kx, DRW, CoinFund, Galaxy Digital, and Hack VC, raising a total amount of tens of millions of dollars.

Superstate's positioning is very clear, developing compliant access on-chain financial products linked to real assets for institutional investors under the U.S. financial regulatory framework. Currently, Superstate has launched three tokenized products covering three major sub-sectors: government bonds, crypto arbitrage, and equity assets, gradually building a diversified on-chain asset portfolio.

In February 2024, Superstate launched its first on-chain fund product, USTB. On the surface, it appears to be a short-term U.S. government bond fund, but it is registered with the SEC and fully compliant, with ownership registration regulated by U.S. federal laws; at the same time, its ownership records also exist in token form on Ethereum and are synchronized with the daily net asset value (NAV) through smart contracts, allowing users to conduct on-chain subscriptions, redemptions, and trading settlements.

USTB is primarily aimed at qualified institutional investors in the United States, supporting subscriptions and redemptions in US dollars or the stablecoin USDC. The product circulates on Ethereum, Solana, and Plume Network. Compared to traditional zero-yield stablecoins, USTB provides actual interest returns for on-chain funds while retaining the on-chain liquidity of the assets, significantly reducing the opportunity cost of the funds.

This design also makes USTB the underlying yield asset for an increasing number of DeFi protocols. For example, Frax Finance uses it as collateral in their stablecoin system, Omni Network has included USTB in their protocol's balance sheet, Sky announced an investment of $300 million for tokenized asset allocation, Arbitrum and Ethena Labs have listed it in their RWA investment portfolio, and the U.S. compliant stablecoin USD uses USTB as part of its underlying support assets.

As of August 6, the asset management scale of USTB has grown to nearly 420 million USD, with a 7-day yield of 4.04%, ranking only behind Franklin, Ondo, and WisdomTree among tokenized U.S. Treasury bond funds.

After achieving significant results with its first product, Superstate is launching its second investment product, the Superstate Crypto Carry Fund (USCC), in July 2024. This is an on-chain crypto arbitrage fund aimed at qualified purchasers, with its core strategy based on the "cash and carry" mechanism from traditional finance.

In traditional finance, USCC mainly focuses on the positive basis of Bitcoin and Ethereum futures markets. By buying spot assets and simultaneously selling futures contracts of the corresponding duration, it locks in the spread profit, thereby constructing a risk-neutral and stable return investment portfolio. Moreover, USCC also integrates Ethereum staking and short-term U.S. Treasury bonds to enhance overall capital efficiency and strengthen the portfolio's ability to withstand volatility.

It can be said that USCC represents another exploration of the integration of on-chain asset composability and off-chain compliance. As of now, the asset management scale of USCC has surpassed $220 million, with an annualized strategy return rate of approximately 16.17%, significantly higher than the industry average level of traditional arbitrage products, and it has established partnerships with protocols such as Morpho, Frax, Resolv, Steakhouse Financial, and Anzen.

Layout tokenized stocks, promote the process of tokenization compliance.

In May of this year, Superstatee further expanded its product line by entering the tokenized stock sector and launched a new platform called Opening Bell. This platform supports the direct issuance and trading of publicly registered stocks on the blockchain network, with initial support for Solana, and plans to gradually expand to more blockchain ecosystems. Investors can directly hold and trade these compliant stock assets through their crypto wallets, enabling direct interaction between traditional equity and DeFi protocols. Currently, Opening Bell has partnered with Upexi, SOL Strategies, Galaxy, and others to promote the tokenization of its stock assets on-chain.

To promote the adoption of tokenization in the financial markets, Superstate has also launched the Superstate Industry Committee (SIC), which has attracted more than fifty members from traditional and crypto sectors, including 1KX, Aave, Uniswap, Solana Foundation, BitGo, Galaxy Digital, Bitwise, Maple Finance, and Plume.

Leshner saw the trend of integration between DeFi and traditional finance as early as the Compound era, but progress was hindered by regulatory pressures. Before officially founding Superstate, Compound partnered with Fireblocks and Circle to launch a fixed-rate product for enterprises and institutions called Compound Treasury, deploying USDC with a guaranteed interest rate of 4% into the Compound protocol, which at that time far exceeded the yield on U.S. Treasury bonds. However, due to severe fluctuations in the DeFi market, declining yields, and compliance pressures, Compound Treasury ultimately announced its closure in the first quarter of 2023.

"The main limitation of DeFi is that crypto-native assets are the only assets that can interoperate," Leshner stated at the launch of Superstate. He is very optimistic about the potential of asset tokenization, having repeatedly expressed in public that the transfer of asset ownership in traditional financial markets is a complex and inefficient process, with a significant amount of backend, settlement, and clearing processes involved every time ownership changes. Tokenization is a more efficient way to record ownership, eliminating cumbersome intermediaries and significantly reducing transaction and settlement costs. In his view, tokenization will become the core trend in future financial markets, bringing various assets such as stocks, bonds, and real estate onto the blockchain to achieve a more efficient, transparent, and compliant market structure.

At the same time, Leshner has always prioritized compliance as a core strategy. He believes that appropriate regulation should not be an obstacle, but rather a tool to make DeFi more inclusive, secure, and widely accepted. As the SEC's guidance in the field of crypto assets and tokenized securities gradually takes shape, several guidelines have been issued, and exemptions may even be established. It is predicted that by the end of 2025, the tokenized securities market will truly take off in a more mature regulatory environment.

Focusing on compliance, Superstate has ramped up its efforts this year. In addition to registering as a transfer agent with the SEC in the United States, aiming to fully incorporate tokenized assets into the existing financial regulatory framework, it is also actively promoting breakthroughs in tokenization policies and the construction of industry standards. For example, a few months ago, Superstate, in collaboration with the newly established Washington lobbying organization Solana Policy Institute (SPI), submitted a proposal named Project Open, advocating for the issuance and trading of securities on public blockchains, and submitted related legal framework proposals, arguing for the allowance of traditional assets like stocks and bonds to be tokenized, and providing specific regulatory exemptions for non-custodial blockchain protocols.

It is worth mentioning that Leshner himself is also actively involved in the current popular cryptocurrency stock play, such as exchanging NFT CryptoPunk #5577 for $5.15 million worth of preferred shares in GameSquare; he also invested approximately $2.03 million to acquire a majority stake in the liquor company LQR House Inc., attempting to establish a crypto treasury plan, which once sparked a control dispute within the company.