![[███░░░░]: Who Graduates Next?](/_next/image?url=https%3A%2F%2Fstorage.ghost.io%2Fc%2Fdf%2F2c%2Fdf2c7059-8617-4d25-9617-996aea279325%2Fcontent%2Fimages%2F2026%2F10%2FProgress-Bar.jpg&w=3840&q=75)
Welcome to the TAC's Progress Bar, where we combed through 694 relevant tokenization news stories from the week, analyzed the key stories on our weekly podcast, then distilled what you need to know into a few hundred words in this newsletter. Delivered to your inbox in time for Friday happy hour in NYC (usually).
Some tokens will need to graduate to tokenized equity to keep growing. Or even have a shot at longevity.
This week we're doing something different. Charlie gave me the whole podcast episode to walk through the Centrifuge transaction from the inside: how a governance token becomes tokenized equity, why 98.5% of voters said yes, and why I think it's the first of many. I've summarized the very high level below but the podcast episode (also below) has far more detail.
I've also had inbound from various projects and have separately been tracking over 25 projects that should and can convert.
Find out of your project is a candidate here.
Also in this issue: William Sanders does the math on how wide the SEC actually opened the door to tokenized stocks on AMMs.
First, the metrics.
Market KPIs (brought to you by RWA.xyz)
📈 RWA market cap was up 0.3% WoW to $38.7 billion
🏆 Biggest RWA winner: Tether Gold (XAUT) added $310M
🏆 Biggest network winner: Ethereum added $140M
📈 Stablecoin market cap was down 0.2% WoW to $294.9 billion
🏆 Biggest stablecoin winner: USDT added $313M
🏆 Biggest network winner: TRON added $225M
📈 Onchain risk free rates:
SOFR: 3.90% (steady WoW at last week's elevated level)
Aave / DeFi: just above 4% (up 11 bps WoW, about a point more yield than a month ago)
Tweet of the week
"TODAY: Chainlink announced it is working to enable financial institutions to connect to @swiftcommunity's blockchain ledger through the Chainlink platform. Swift moves the equivalent of the world's GDP roughly every three days"
-- @chainlink (Chainlink)
The threshold question
When does it make sense to convert from a token to tokenized equity?
Before I answer that I want to note that equity (and other securities) moving at the speed of crypto with all the features of DeFi IS the endgame.
It's why over a hundred projects met with the SEC since the crypto task force was established.
It's why massive institutions like BlackRock and others have partnered with networks, DeFi apps, and have distributed almost $40B institutional grade assets onchain.
It's why the SEC has recently released guidance about wallets, DeFi front ends, digital transfer agents, AMMs for trading tokenized equities (more on that below)... you get the idea.
And the answer to the question is simple.
For projects trying to support this transition where the token stops being an asset and becomes a tax on the business. Deals get lost or scoped down because the token is in the room. Converting into tokenized equity fixes that. Holders own the actual business, and institutions can finally buy in.
It's also the first step toward the endgame: network tokens doing network jobs, and real equity, issued onchain, plugged into DeFi. Capital markets moving at crypto speed.
How Centrifuge is doing it
Before the mechanics, a thank-you. Going first is hard and scary. You catch arrows no matter what, even when you're doing the right thing. A truly decentralized project has thousands of people with an opinion, and you have to listen to all of them while holding on to what's actually best for everyone. Bhaji, Anil, Martin, Jeroen, Eli, and the rest of the Centrifuge team have shown real mettle through this whole process. It's been inspiring to work alongside them, and anyone thinking about doing this should know up front that it takes that kind of conviction.
- Learn the rules of the game. Governance mechanics, holder distribution, and every contract the deal touches. You have to build the playbook of procedures to get it done while ensuring you don't accidentally blow up material relationships along the way.
- Put it to the community. You have to listen to it all and respond appropriately. This entailed tracking every question across the forum, X, and the press, clustering them, and answering them in weekly FAQ releases.
- Vote. 98.5% in favor, with turnout 5.6 times the previous record for any Centrifuge vote. In prep for the vote we built an analysis of all prior votes to determine a likely outcome. My assessment ended up being way more conservative at a likely "yes" but by a much smaller margin (roughly 70%).
- Conversion. Holders will eventually go through eligibility checks, then exchange for a natively onchain share class. Behind that one flow sit months of legal, tax, regulatory, and smart contract work.
As I'm writing this I'm realizing how much context is getting compressed. Thank yous and shout outs need to go out to the entire Centrifuge team, various lawyers, tax consultants, the teams at Galaxy and CoinList, and numerous others. The podcast episode goes in quite a bit more detail on the mechanics and I'm also happy to discuss the playbook in more detail.
Who's next?
As mentioned previously I've been discussing token-to-equity conversions with numerous very well known projects. I've also built a list of over 25 token projects that are ready to graduate. We're not publishing the full list and methodology publicly because it would send trading activity for those projects into a tizzy.
What we'll do instead is send you a report about a project you're curious about. The report will cover whether the project should graduate and whether a tokenholder vote would be likely to succeed.
Use this link to get your report.
Disclosure: I advised Centrifuge on this transaction through my advisory, Tesseract. Nothing in here is legal or financial advice nor an offer of securities.
The Token-to-Equity Playbook
This week on The First Trillion, Charlie stress-tested the Centrifuge conversion phase by phase. We covered why some token projects should stay tokens and others shouldn't, the data that showed CFG trading as levered ETH beta, how we managed a decentralized community through a request for comment without straying into securities offers, how the vote landed at 98.5%, and how the conversion will work. Charlie dug up the precedents, from Bitfinex's 2016 hack-recovery equity to Across's recent conversion, and we ended on the roughly 25 projects that look like the next candidates.
The episode is available below and we've summarized it for you here.
Contributor spotlight: How wide is the SEC's door for tokenized stocks on AMMs?
The SEC's Innovation Exemption finally lets AMMs list tokenized securities without registering as an exchange or ATS. The catch is in the caps: each project can list 75 Tier 1 and 250 Tier 2 symbols, with per-symbol volume capped at 0.25% and 2.5% of prior-month average daily volume. William Sanders turns those percentages into dollars. Across the top 75 Tier 1 names, the cap works out to roughly $700 million a day, about a third of Uniswap's daily volume. Enough to matter, he argues, but not a merger of DeFi and TradFi liquidity. He also flags a problem baked into the order: the cap is defined against data an AMM can't know in real time.
Stay ahead of the curve
Be sure to follow us on X, LinkedIn, and Spotify for real-time updates, behind-the-scenes insights, and the occasional hot take that didn't make it into the Progress Bar or the First Trillion podcast episode or summary.
Until next week,
The TAC Team
