Tokenized Stocks: A New Wave in the On-Chain Capital Market

In the rapid development of cryptocurrency and AI technology, financial tokenization is sparking a new revolution. Some well-known companies are competing for market dominance through tokenized stocks, and this trend may have a profound impact on global capital flows, trading efficiency, and market volatility.

Strategic Layout of Key Participants

Robinhood's ambitions

Robinhood plans to support tokenization of over 1,000 U.S. stocks by the end of this year. Its main features include:

• 24/7 trading
• Lower the investment threshold and achieve partial ownership
• Provide convenient investment opportunities for global investors

Currently, this service is limited to the EU market. Robinhood also announced the launch of a Layer 2 blockchain based on Arbitrum, further expanding the Ethereum ecosystem.

However, this innovation has also sparked some controversy. Some have pointed out that these tokenized stocks are not equivalent to real stocks; what users are actually purchasing are tokenized contracts rather than actual shares. This highlights the importance of clear communication by companies when promoting such products.

Kraken's new approach

Kraken has adopted a different strategy by collaborating with Backed to launch xStocks on Solana, offering over 60 tokenized US stocks and ETFs. Features include:

• Issued on the Solana blockchain
• Starting from 1 dollar
• Can be used in DeFi protocols to earn yields or as collateral.

Although Kraken has the Ink Layer 2 network based on OP Stack, it has chosen the Solana ecosystem in the field of tokenized stocks, and the long-term effects of this strategic choice are worth paying attention to.

Other players' movements

• A trading platform: In collaboration with Backed, launched xStocks tokenization of US stocks and ETF products on its spot platform. These assets are pegged 1:1 to real stocks and support Ethereum and Solana networks.

• A cryptocurrency exchange: launched the first tokenized stock MicroStrategy, enabling 24/5 trading and fully on-chain.

Market Landscape and Historical Reference

Layout of potential giants

A well-known cryptocurrency exchange has not yet officially entered the market, but its movements are worth paying attention to. It is reported that the company is negotiating with regulators to seek compliant opportunities for tokenization of stocks. Its advantages include:

• A powerful portfolio covering multiple top DeFi protocols
• Advanced technical infrastructure, with its Layer 1 chain expected to achieve millions of TPS.

The Importance of Compliance

Compared to the Mirror Protocol launched in 2020, the current tokenization of stocks model adopts a more compliant and regulated approach, avoiding the risks of repeating past mistakes. With the entry of traditional players and crypto giants, the scale of tokenized stocks is expected to far exceed previous levels.

The Transformation of On-Chain Capital

By the end of 2025, the market value of on-chain tokenized stocks is expected to exceed $20 billion and may even reach $50 billion. The financial infrastructure of this "super tokenized stock" will usher in a new phase of deep integration between traditional finance and blockchain.

Compared to traditional methods, on-chain stocks have the ability to trade around the clock, with lower transaction costs, and no longer rely on intermediary channels. Especially in overseas markets, on-chain assets can almost be obtained with "zero threshold" exposure to US stocks, forming a broad and inclusive capital channel.

In the short term, on-chain stocks may exist more as a complementary mechanism to the traditional stock market. In terms of market volatility, the on-chain market may be more stable due to deeper liquidity, but it may also experience severe fluctuations during sudden events due to the lack of traditional circuit breaker mechanisms.

As major platforms deepen their布局, the proportion of tokenized stocks in the entire financial market may significantly increase in the next two to three years. It may even prompt traditional exchanges to build their own on-chain platforms to provide products that meet regulatory requirements.

Currently, some projects have gone live, such as Coinx on a certain DEX platform. Although still in the early stages, its "on-chain priority price discovery" mechanism may become an important way for the future collaboration between traditional and on-chain markets.

The development of tokenization stocks has not only brought new investment opportunities but also comes with higher risks. The financial market is entering a multi-layered integration phase between on-chain and traditional mechanisms. This transformation of the on-chain Capital Market has only just begun.