Mert Mumtaz on tokenized private shares: Republic's mirrored assets, Robinhood's chain, and what Erebor means for crypto

Summary

Mert Mumtaz — co-founder of Helios, a blockchain infrastructure company — walks through two parallel experiments in putting private and public equity on-chain, and what the regulatory environment shifting under the crypto industry actually means in practice.

Republic and Robinhood: two very different bets

Republic's private-share product is more constrained than the headlines suggest. Purchases are capped at $5,000, buyers are locked up for roughly a year, and the token is a mirrored asset — a note that tracks share price and pays out only on a liquidity event. Holders are not acquiring actual equity. Mumtaz reads the $5,000 cap as regulatory water-testing rather than a product design choice, though the cap also functions as a rationing mechanism: if SpaceX shares were released on-chain at market demand, they would be bid up immediately.

Robinhood's version is structurally different. It launched on Arbitrum, an Ethereum L2, with a stated intention to migrate to a proprietary, optimized chain built for real-world assets. Mumtaz argues the vertical-integration logic holds — Robinhood already has the users, the liquidity, and the distribution, and owning the chain gives it full control over UX and compliance rules. The execution risk is hiring the blockchain engineering talent to run it.

How the tokenized public equity actually works

The on-chain public stock tokens — Tesla, Nvidia, Meta — are available through Robinhood and Kraken in Europe, with a company called Back handling the regulatory layer. The mechanism: users go through KYC to buy from the primary market, then withdraw the token to a self-custody wallet. At that point, European securities law treats the certificates as digital assets, not regulated securities, as long as US investors are excluded in the fine print. The tokens are fully backed one-to-one by a custodian. Supply is capped — Mumtaz says roughly $100 million can be issued at this stage — and volume is running in the tens of millions, so liquidity is thin.

The composability angle is real: a holder can post Tesla stock as collateral in a DeFi protocol and borrow against it, or swap a memecoin directly into an equity token. Mumtaz frames Patrick Collison's stablecoin description as the right analogy — dollars on superconductor rails, now extended to equities.

The Terra Luna question

Mumtaz takes seriously the systemic risk of removing a circuit breaker from financial instruments. Terra Luna's collapse is the reference point: an algorithmic system with no backstop that spiraled because no one could pause it. His answer is that "decentralized" does not mean "uncontrollable" — it means the controls are programmable and transparent. USDC can freeze balances on a per-wallet basis today. Robinhood, running its own L2, can encode the same kinds of halt rules that traditional exchanges use. The difference is that the code is auditable: anyone can read what the issuer is allowed to do before they do it. The GENIUS Act on stablecoins, which Mumtaz calls significant, sets clearer standards on backing and audit frequency that address the Terra-style failure mode directly.

Erebor and the banking access problem

The FT reported on a new bank being assembled by Palmer Luckey, Peter Thiel, and Joe Lonsdale. Mumtaz frames the problem it is meant to solve through a personal example: his Canadian co-founder had a mortgage approved, then rescinded, after the bank identified his employer as a crypto company — even though Helios is effectively a cloud infrastructure provider with no token. The debanking issue has two dimensions: basic access (getting accounts, mortgages, payroll infrastructure) and technical interoperability (moving USDC earned on-chain into the traditional financial system without friction). Mumtaz credits Nic Carter and Mike Solana's Operation Chokepoint reporting for the detailed account of how systematic the debanking was under the prior SEC and banking regulatory posture.

On the policy side, Mumtaz notes — with some uncertainty about the details — that Fannie Mae and Freddie Mac are reportedly being advised to consider crypto assets held on centralized exchanges like Coinbase as eligible mortgage collateral. Whether that extends to volatile tokens like Farcoin, he says, depends on the specific rules around asset quality.

The broad takeaway is directional: two years ago under Gary Gensler, Mumtaz says, none of this was imaginable. Robinhood, Coinbase, and potentially Circle are now racing to build competing chains for tokenized assets. The infrastructure is early and the liquidity limits are real, but the regulatory and competitive environment has shifted fast enough that the next phase of competition is already forming.