BlackRock and Ondo Finance Push Tokenization Toward Onchain Portfolios

BlackRock is exploring the next phase of tokenization by moving beyond individual assets to package entire investment strategies into blockchain-based tokens. Through a partnership with Ondo Finance, the asset manager has introduced Intelligent Portfolios, which allow investors to hold a single token representing a pre-built strategy focused on high income, diversified growth, or high growth.

While traditional mutual funds and ETFs have long bundled assets, putting these portfolios onchain offers new utility. These tokens can move across wallets and platforms, remain visible on the blockchain, and potentially serve as collateral for borrowing or integration into other DeFi products.

Pantera noted in a recent report that this shift represents a move from single securities to onchain portfolios, which reduces the number of positions and rebalancing decisions investors must manage themselves. According to Broadridge, model portfolios held approximately $9.8 trillion in assets as of June, highlighting the scale of the market that tokenization could eventually tap into.

Lisa O'Connor, BlackRock's global head of model portfolio solutions, stated that tokenization creates new ways for portfolio strategies to be delivered through digital infrastructure. Other firms are also experimenting with this space, such as Bitwise, which launched Automated Token Portfolios in August with Coinbase and Glider to allow eligible non-U.S. investors to follow managed portfolios while retaining custody of individual assets.

Tom Staudt, president and chief operating officer of ARK Invest, suggested that tokenization could eventually expand the range of assets available to everyday investors, including private equity, private credit, and crypto. When combined with AI, this could enable the creation of highly personalized portfolios tailored to an investor's specific goals, risk tolerance, or tax situation.

John Hoffman, head of portfolio products at Ondo, previously envisioned a future where autonomous software continuously monitors markets and adjusts capital allocation in real-time. However, he noted that achieving this requires a broader universe of onchain assets, prime-brokerage infrastructure, and native blockchain management strategies.

Dan Romero, chief business officer at Tempo, compared the current evolution of tokenization to the rise of stablecoins. He suggested that as more of the investable universe moves onchain, developers will be able to build new financial products and experiences that mirror the disruption seen in the neobank sector.