BlackRock has designed three model portfolios that Ondo Finance has converted into single blockchain tokens, extending tokenization from individual assets to complete investment strategies. The portfolios target high income, diversified growth and high growth.

Each strategy is represented by one token that eligible investors can hold in a wallet. BlackRock constructed the underlying portfolios, while Ondo handled the tokenization, according to a report by The Cryptonomist citing CoinDesk.

BlackRock Creates Three Portfolio Strategies

The three portfolios are High Income (BLKHIon), Diversified Growth (BLKDIGon) and High Growth (BLKGRWon). The report, citing Crypto Briefing, said the products are available to eligible non-U.S. investors.

The tokens can be transferred peer-to-peer across wallets, exchanges and decentralized venues, including 1inch. Instead of managing and rebalancing several separate positions, investors hold a single token representing the selected strategy.

Under the arrangement, BlackRock licenses its portfolio construction and receives fees from the underlying funds it sponsors. According to the report’s account of Crypto Briefing’s coverage, BlackRock has no direct contractual obligations to token holders. That division of roles separates the portfolio methodology from the token itself: investors buy into a structure built by Ondo around BlackRock-designed allocations, not into a BlackRock product with direct obligations to them.

The report said the tokens can move across wallets and platforms while remaining visible onchain. It also said they could potentially be used as loan collateral or integrated into other financial products, although those uses remain conditional.

Representing an entire investment strategy with one token is presented as a development beyond the tokenization of individual Treasury funds, private credit, stocks or exchange-traded funds.

Model Portfolios Represent Roughly $9.8 Trillion

Model portfolios held roughly $9.8 trillion in assets as of June, according to Broadridge figures cited in the report. Wealth managers use these portfolios as ready-made combinations of funds. The tokenized strategies enter that established distribution format, applying blockchain delivery to a channel that already operates at trillion-dollar scale in traditional wealth management.

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 a move “from single securities to onchain portfolios,” according to CoinDesk coverage cited by The Cryptonomist. Pantera said the structure reduces the number of positions and rebalancing decisions that investors must manage themselves.

BlackTelegraph has also 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, while Glider software automatically rebalances the allocations.

The report distinguishes that structure from Ondo’s approach. Ondo places exposure to the strategy inside one transferable token. Bitwise, by contrast, keeps individual tokenized stocks in investors’ wallets and uses software to manage the allocations. The parallel launches leave the emerging category with two structural templates — embedded strategy exposure and software-managed baskets — both currently scoped to eligible non-U.S. investors.

Tom Staudt, ARK Invest’s president and chief operating officer, told CoinDesk that tokenization could broaden access to investments. He identified private equity, private credit, crypto and international markets as areas that had previously presented access challenges.

Ondo Identifies Additional Infrastructure Requirements

John Hoffman, Ondo’s head of portfolio products, described a more automated objective 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 achieving that objective would require a broader range of onchain assets and prime-brokerage infrastructure. It would also require asset-management strategies capable of operating natively on blockchain networks. Those build-outs outline the distance between today’sable strategy tokens and the continuously adjusting portfolios Hoffman described.

Source: BlockTelegraph | BlackRock