1. The Core Reframe: Not a Single Trade, a Long Roadmap
When Grayscale Research head Zach Pandl addressed the EthCC conference in Cannes, his central message was a reframing of how investors should think about tokenisation as an investable theme. The conventional approach — identifying a single blockchain or protocol as "the tokenisation winner" and allocating accordingly — misses the structural reality of how major technological transitions in financial infrastructure actually unfold. Pandl argued that tokenisation should be understood less as a trade and more as a decade-long or multi-decade roadmap, with genuinely different networks and protocols winning at different stages of that progression. That phased framing has practical investment implications: the assets that offer the best near-term return from institutional adoption are not necessarily the same assets that will capture the most value in the long run, and positioning exclusively in either may mean being right at the wrong time.
2. The Scale of What Is Being Discussed: $19 Trillion
The ambition behind Pandl's three-phase framework is calibrated to the scale of the addressable market. Estimates for the eventual value of assets that could be represented on public blockchains — equities, bonds, real estate, private credit, commodities, fund shares, and other traditional financial instruments — typically reach into the tens of trillions of dollars. Pandl's reference to a $19 trillion opportunity positions tokenisation not as a niche application but as a potential reorganisation of how global financial assets are issued, transferred, settled, and custodied. Against that backdrop, the current tokenised asset market — which various estimates place between $26 billion and $35 billion across all asset categories as of early 2026 — represents a fraction of a fraction of the eventual addressable market. That gap between current reality and eventual potential is precisely what gives the phased framework its analytical value: the path from here to $19 trillion will not be linear, and each phase of the journey may reward different network architectures.
3. Phase One: Canton Network and the Institutional Entry Point
The first phase of tokenisation is already underway, and Pandl identified the Canton Network as a likely near-term winner in this environment. Canton is a permissioned blockchain network backed by a consortium of major financial institutions including DRW, TradeWeb, Goldman Sachs, and Nasdaq — all organisations whose participation provides both the capital and the institutional credibility required for regulated financial activity to migrate onto blockchain infrastructure. Pandl described Canton's approach as offering a "slightly upgraded version" of today's financial system — retaining the compliance controls, identity management, and governance structures that institutional participants require while adding the operational efficiencies that blockchain settlement provides. He characterised it as a "perfectly reasonable investment" for investors seeking nearer-term traction, acknowledging that Canton's permissioned architecture represents an incremental rather than transformative change in how global finance operates. The value proposition for institutions is not decentralisation — it is efficiency gain within familiar compliance parameters.
4. Why Permissioned Systems Win the First Phase
The institutional preference for permissioned systems in the first phase of tokenisation reflects specific requirements that permissionless public blockchains currently do not fully satisfy. Regulatory compliance frameworks require that participants in financial transactions be known, verified, and subject to applicable jurisdiction. Anti-money laundering and know-your-customer obligations require identity verification that permissionless systems cannot enforce at the protocol level. Capital adequacy requirements and custody regulations impose operational constraints that require the governance structures of permissioned systems. And the institutional investors who would anchor the first wave of tokenised asset adoption — pension funds, insurance companies, sovereign wealth funds — operate under fiduciary obligations that require demonstrable regulatory compliance before deployment. Canton's architecture addresses all of these requirements by design, making it the path of least resistance for the first large-scale institutional tokenisation flows.
5. Phase Two: Avalanche and the Hybrid Model
The second phase of tokenisation, in Pandl's framework, involves a hybrid architecture that combines institutional-controlled blockchain environments with connections to a global shared state. The defining characteristic of this phase is interoperability — the ability for assets tokenised on institution-owned, compliance-controlled chains to interact with the broader crypto ecosystem without requiring a complete restructuring of the compliance framework that governs them. Pandl pointed to Avalanche as an example network well-positioned to capture value in this phase. Avalanche operates through a primary layer-1 network with hundreds of sovereign, institution-owned sub-networks — called subnets in the Avalanche terminology — connected to it. This architecture allows a bank to operate a fully controlled, compliance-compatible tokenisation environment while maintaining a connection to the liquidity and composability of the broader Avalanche ecosystem. The hybrid model represents a middle path between the fully permissioned world of Canton and the fully permissionless world that characterises Ethereum's current DeFi ecosystem.
6. Phase Three: Ethereum and the Global Decentralised Layer
The third and most ambitious phase of tokenisation — the one that would justify valuations in the tens of trillions of dollars — requires a globally accessible, permissionless platform on which any asset from any jurisdiction can be issued, traded, and settled by any participant without requiring institutional gatekeeping. In this phase, the network effect of having the world's assets on a single, open infrastructure would generate compounding value for every participant — borrowers, lenders, traders, and infrastructure builders alike. Pandl identified Ethereum as the protocol with the best chance of serving this function in the long term, consistent with Grayscale's prior published research positioning Ethereum as "the common global platform" that could capture the long-tail value of open financial infrastructure. The important qualification is timing: Ethereum's moment as the dominant tokenisation platform is not the current phase, nor the near-term phase — it is the eventual endpoint of a transition that begins with permissioned systems and moves progressively toward openness as regulatory frameworks evolve and institutional familiarity with permissionless networks deepens.
7. Chainlink as Cross-Phase Infrastructure
An asset class that Grayscale has separately identified as positioned to capture value across all three phases of the tokenisation roadmap is Chainlink — the oracle network and cross-chain interoperability protocol. Chainlink's role is not to compete with Canton, Avalanche, or Ethereum for the role of the primary tokenisation platform; rather, it provides the data and communication infrastructure that all of those platforms need to function effectively. Its oracle system feeds real-world pricing data from traditional financial markets into smart contracts. Its Cross-Chain Interoperability Protocol enables tokenised assets to move between different blockchain environments. Its integration with institutions including S&P Global, FTSE Russell, and J.P. Morgan's Kinexys positions it within the institutional infrastructure that will underpin the first phase. Grayscale has described Chainlink as "the critical connective tissue between crypto and traditional finance" — infrastructure that becomes more valuable as the total volume of tokenised assets grows across all networks.
8. Why Tokenisation Remains in Its Infancy
Despite the attention the tokenisation narrative has received, Pandl's framing explicitly acknowledged that the trend is still in its earliest stages. The current tokenised asset market, while growing, represents an extraordinarily small fraction of the total global asset base. For context, global fixed income markets alone represent more than $120 trillion in outstanding value — making the current $26-$35 billion tokenised asset market equivalent to roughly 0.02-0.03% of just one component of the addressable opportunity. The gap between the current state and the eventual scale described by the three-phase framework is enormous, and bridging it requires not just technological development but regulatory evolution across multiple jurisdictions, infrastructure investment at institutional scale, and the gradual building of the trust and operational familiarity that large financial institutions require before migrating core processes onto new infrastructure. None of those changes happen in a single quarter or even a single year.
9. The Investment Sequencing Implications
Pandl's three-phase framework has direct implications for how investors should sequence their tokenisation exposure. Near-term traction — 2026 and 2027 — likely comes from Canton-style institutional implementations, where the participation of established financial institutions creates the regulatory credibility and capital allocation that drives near-term activity. Canton itself is not publicly tradable in the conventional sense, but exposure to the networks and protocols that institutional tokenisation deployments run on and connect to — including those that provide oracle data, custody infrastructure, and cross-chain communication — can be accessed through public crypto markets. The middle phase — hybrid architectures like Avalanche — represents the intermediate-term opportunity where institutional and open-market ecosystems begin to connect. The long-term thesis on Ethereum remains intact but is priced on a longer horizon. Investors who structure tokenisation exposure as a phased allocation across all three themes, rather than concentrating in a single network, are positioned for returns across the full roadmap rather than betting on the timing of any single phase.
10. The EthCC Context: Tokenisation at the Intersection of DeFi and TradFi
Pandl's remarks at EthCC occurred in the same week that Australia passed its comprehensive crypto licensing legislation, Brazil's B3 exchange announced its bitcoin and macro event contracts, and Aave V4 launched with its real-world asset and institutional lending architecture. The convergence of regulatory, exchange infrastructure, and protocol developments in a single week underscores the accelerating pace of institutional engagement with blockchain infrastructure. EthCC itself — the Ethereum Community Conference — historically focused on protocol development and DeFi applications; the presence of Grayscale's research head framing a three-phase institutional tokenisation roadmap at the conference signals how thoroughly the institutional and crypto-native communities have converged around the tokenisation theme as the most commercially significant near-term application of public blockchain technology.