Will On-Chain Repo Reach $1 Trillion? One Reason Yes, One Reason No

Matteo Pandolfi of Pareto puts a number on the table: on-chain repo reaches $1 trillion within five years. He makes the case using the current pipeline of traditional institutions entering the space and the hybrid infrastructure model that does not require full on-chain execution. Craig Burchell of FalconX gives you both sides. The bull case: the facilities are already being built, the demand is real, and you are watching it happen in real time. The bear case: the standardization problem. The reason centrally cleared repo works in TradFi is that everything operates under the same agreement and can be automated like clockwork. Getting an entire ecosystem on a standardized on-chain repo form is a gargantuan challenge. On-chain is probably one of the best places to try, but that is still essentially standing up a new exchange from scratch. To open the segment, Craig walks through the Aave deleveraging crisis as the clearest example of what a mature on-chain repo market changes: nobody wanted to sell their positions. They needed short-term liquidity. The cascade did not have to happen. This clip is from a longer conversation on bringing the repo market on-chain. Full episode here: ⁠https://youtube.com/live/E_X1rmunes4⁠  Bits + Bips: The Interview drops every Thursday — subscribe to catch it. Heads up!  If you haven’t yet, be sure to subscribe to Bits + Bips, since the show will migrate there in a few weeks. Follow us on Apple Podcasts, YouTube, Spotify, X, Unchained and wherever you get your podcasts.