Zach Pandl, Head of Research at Grayscale, presented a detailed roadmap for the tokenization of real-world assets (RWAs) at the EthCC conference in Cannes, France. He argued that investors should view tokenization not as a single trade but as a long-term evolution with distinct phases, each producing different winners.
The tokenization market, currently valued at approximately $27 billion, represents a mere 0.01% of global capital markets. However, projections from Boston Consulting Group (BCG) and Ripple suggest this figure could balloon to nearly $19 trillion by 2033, indicating massive growth potential. Pandl noted that major financial institutions are already aware of the opportunity, with stablecoins and tokenization being their primary points of focus, though capital allocation strategies are still being formulated.
Pandl's phased framework begins with an initial stage favoring projects that closely resemble today's traditional finance systems. "In the early stages of the tokenization process, you will see things that have success that look more similar to how the financial system works today," he stated. This phase is characterized by institution-centric, permissioned networks that address practical concerns like privacy, identity, and control.
He specifically highlighted the Canton Network, backed by Wall Street giants including DRW, TradeWeb, Goldman Sachs, and Nasdaq, as a potential early-phase winner. Pandl described it as "a perfectly reasonable investment" for investors seeking nearer-term traction, even if it represents only a slightly upgraded version of the existing financial infrastructure.
The second phase envisions a hybrid model where institution-owned blockchains interconnect with a global shared state. Pandl pointed to Avalanche (AVAX) as an example, with its ecosystem of hundreds of sovereign, corporate-owned subnets connected to a primary Layer-1 network.
For the long-term, Pandl identified Ethereum's Ether (ETH) as the more ambitious but slower-moving bet. He believes the market will eventually shift toward "global decentralized finance," but cautioned that neither the technology nor institutional readiness is fully there yet, making ETH an investment for those willing to wait for a fundamental shift away from financial intermediaries.
Beyond direct blockchain investments, Pandl also highlighted chain-agnostic service providers like Chainlink as compelling "picks-and-shovels" plays that may offer attractive exposure to the tokenization trend.
