BlackRock built three model portfolios that Ondo Finance turned into single blockchain tokens, extending tokenization from individual assets to investment strategies. The portfolios target high income, diversified growth and high growth.
Each strategy is represented by one token that investors can hold in a wallet. BlackRock constructed the underlying portfolios, while Ondo handled their tokenization, according to The Cryptonomist’s report citing CoinDesk.
BlackRock Designs Three Portfolio Strategies
The BlackRock portfolios are High Income (BLKHIon), Diversified Growth (BLKDIGon) and High Growth (BLKGRWon). The report, citing Crypto Briefing, said they are available to eligible non-U.S. investors.
The tokens can trade peer-to-peer across wallets, exchanges and decentralized venues, including 1inch. Investors hold a token representing the strategy, rather than separately managing and rebalancing several positions.
Under the arrangement, BlackRock licenses its portfolio construction and receives fees on the underlying funds it sponsors. It contractually owes nothing directly to token holders, according to the report’s account of Crypto Briefing’s coverage.
The report describes tokens that can move across wallets and platforms while remaining visible onchain. It says they could potentially serve as loan collateral or integrate into other financial products.
Those possible uses remain conditional. The report presents the ability to represent an entire strategy as the development beyond tokenizing individual Treasury funds, private credit, stocks or ETFs.
Model Portfolios Hold Roughly $9.8 Trillion
Model portfolios contained roughly $9.8 trillion in assets as of June, according to Broadridge figures cited in the report. These are ready-made fund combinations used by wealth managers.
Lisa O’Connor, BlackRock’s global head of model portfolio solutions, described the delivery model in the announcement cited by CoinDesk. “Tokenization creates new ways for portfolio strategies to be delivered through digital infrastructure,” O’Connor said.
Crypto investment firm Pantera described the development as moving “from single securities to onchain portfolios,” according to CoinDesk’s coverage cited by The Cryptonomist. Pantera said the practical change reduces the positions and rebalancing decisions investors must manage themselves.
For related coverage, BlockTelegraph has reported on blockchain infrastructure for asset distribution, financial institutions adopting blockchain and institutional crypto infrastructure.
Other Firms Test Different Portfolio Structures
In August, Bitwise launched Automated Token Portfolios with Coinbase and a16z-backed Glider. Eligible non-U.S. investors can track Bitwise-curated baskets of tokenized stocks, with Glider software handling automatic rebalancing.
The report distinguishes that structure from Ondo’s approach. Ondo puts exposure inside one transferable token, while Bitwise keeps individual tokenized stocks in investors’ wallets and uses software to manage allocations.
Tom Staudt, ARK Invest’s president and chief operating officer, told CoinDesk that tokenization could broaden investment access. Staudt identified private equity, private credit, crypto and international markets among the areas that previously posed access challenges.
Ondo Describes Further Infrastructure Needs
John Hoffman, Ondo’s head of portfolio products, described a more automated goal in a June interview with CoinDesk. “Our end state will be portfolios that are professionally managed, real-time and adjusting to market circumstances and data changes,” Hoffman said.
Hoffman said reaching that goal would require a broader range of onchain assets and prime-brokerage infrastructure. It would also require asset-management strategies that can operate natively on blockchain networks.