The tokenization boom behind stocks: Who's making money, and who's doing the heavy lifting for others?

Original author: @Decentralisedco

Original translation: AididiaoJP, Foresight News

Stocks On-Chain: Who Makes the Money?

In 2017–2018, Ethereum proved that smart contracts could work, and for a while we wanted to put everything on-chain. But over the following months, weak infrastructure taught the market a harsh lesson. The dream then changed: what if crypto assets could be bought, sold, and held in the same brokerage account as traditional assets? That's how crypto ETFs came about. Now we're once again at a similar crossroads: putting every kind of financial asset on-chain to make it more useful and more accessible than it is today.

Today, traders and investors hold over $6 billion in on-chain equity exposure through two paths.

The first is tokenization. A company buys shares, hands them to a custodian, and issues a corresponding token. All on-chain stock tokens combined are worth $3.21 billion, up 10% over 30 days. The second is the synthetic route: perpetual contracts pay out stock price changes, but no one actually buys the shares. On trade[XYZ] alone, open interest in equity, index, and ETF perpetuals stands at $3.01 billion, equivalent to 94% of the total value of all on-chain stock tokens.

So, starting from the $3 billion level, where does this go next? In our view, stocks on-chain unfold in four stages.

Today, most of what you buy is just a wrapper: an offshore claim issued by some entity. Next, tokens become collateral, letting you borrow against Nvidia even when the market is closed. Then brokers let you turn stocks you already hold into tokens without selling. That's where the trillion-dollar market lies—foreign investors alone hold nearly $20 trillion in US equities. Finally, companies record the shares themselves on-chain, and no wrapper is needed. A small group of public companies is already doing this.

What You Get Is Just an IOU

When you buy Nvidia through a broker, the name on Nvidia's shareholder register is Cede & Co, the nominee of the Depository Trust Company (DTC); your broker's ledger then shows you as the holder. Most stock tokens are, in essence, claims on that record.

Take Robinhood. BBVI, or Bitstamp Global (owned by Robinhood), buys the shares, and Alpaca holds them as broker and custodian. Then Robinhood Assets (Jersey) issues you a debt security. The practical meaning: one token is a debt worth one share. Dividend reinvestment and stock splits adjust how many shares each token represents. It carries no voting rights and gives you no ownership of the stock. If the issuer goes under, a securities agent sells the shares and pays holders.

Who is responsible for keeping the token price pegged to the share price? Those allowed to mint. Minters arbitrage between the stock and the token: buy whichever is cheaper, convert to the other side, sell, and pull the price back to par. At Robinhood, only BBVI can do this, and only from 2 a.m. Monday to 2 a.m. Saturday Central European Time. At other times no one can mint, so the token price depends on what other holders are willing to sell for.

Issuers differ on who can mint, where they can sell, and what you can do once you hold. They all buy shares through Alpaca. Binance, Robinhood, and Coinbase own their own exchanges, so they sell tokens to their own customers. xStocks is the exception. Kraken agreed to acquire it in December, but you can also buy xStocks-issued tokenized equities on OKX, Bybit, and Gate. Today, if you want to borrow against stock tokens, the xStock version is the most likely to work, since most lending markets support it.

Your Broker, Still the Same Old Face

The top 100 tokenized stocks added $950 million over 90 days, rising from $2.09 billion to $3.03 billion. Over the same period, holding addresses grew from 417,000 to 4.21 million, a tenfold increase.

Over the past three months, Binance and Robinhood together drove 86% of new holders. BNB Chain added 1.72 million addresses, and Robinhood Chain added 1.55 million. BNB Chain also brought in $517 million in value, more than all other chains combined. Given its huge non-US customer base, that's no surprise. But whether it can sustain that pace depends on whether people find use cases. Solana and Ethereum added 518,000 holders combined. Clearly, holder counts are driven by apps that control most of the value chain and already have massive distribution.

Of course, 4 million holders doesn't mean 4 million investors. Look at the holding structure across four chains' stock tokens: among 2.5 million addresses, 97.5% hold less than $100; only about 18,000 wallets hold more than $1,000.

Where's the money? xStocks' minting wallet holds $1.13 billion in unsold tokens on Solana and $552 million on Ethereum. Of the $2.6 billion held outside these two wallets, exchanges account for 40%. On BNB Chain, Binance's own wallet holds 81% of all bStocks, so most bStocks never leave the exchange. Wallets worth more than $100,000 account for another 40%; on Ethereum, such wallets make up 80%, half of which sit in 32 Safe multisig wallets, likely belonging to trading firms. Contracts account for 14%, including trading pools and lending markets. Wallets under $100,000 account for only 7%.

So stage one is essentially "a brokerage account plus a blockchain receipt." If the exchange holds the token for you, it's no more useful than the stock in your brokerage account.

Stocks Take a Second Job

Why put stocks on-chain? Two reasons: buying and holding are cheaper; and you can do other things with them.

Buying $1,000 of Nvidia xStock through the Jupiter router and immediately selling it costs about 20 cents in spread and pool fees. The Jupiter app adds another 0.1% on each side, for a total of about $2.20. At $100,000 scale, the router's round-trip cost is about 0.6%. Off-chain, the most expensive step for overseas buyers is getting money to a US broker. Indian app INDmoney quotes currency conversion at 0.5%–1.2%, with more fees after that. Revolut's standard plan charges up to 1% on anything over €1,000 per month. Conversely, if you already hold stablecoins, you skip these fees.

But more interesting is that composability of on-chain stocks makes financialization easier, and credit becomes cheap and accessible. Kamino accepts xStocks as collateral and lends USDC at 5.75%, with up to 73% loan-to-value on S&P 500 tokens. Jupiter Lend is 4.88%. Ether.fi lets you borrow at about 4% through Aave, with stock tokens included in the collateral mix, and you can spend the loan with its card. For US customers borrowing under $25,000, Schwab charges 12.075% and Interactive Brokers 5.38%. And if you're exactly the foreign retail investor these tokens target, you usually can't borrow at all. On-chain infrastructure is opening a new door for people who can barely touch US stocks.

How big can this get? Two reference points.

First, Wrapped Bitcoin, WBTC. In 2019, no mainstream lending market accepted WBTC as collateral, and supply was under 600 BTC. In January 2020 Aave listed WBTC, in May Maker opened a WBTC vault, and in July Compound accepted it as collateral. By the end of 2021, supply reached 258,000 BTC, 415 times the January 2020 level.

First, Wrapped Bitcoin, WBTC. In 2019, no mainstream lending market accepted WBTC as collateral, and supply was under 600 BTC. In January 2020 Aave listed WBTC, in May Maker opened a WBTC vault, and in July Compound accepted it as collateral. By the end of 2021, supply reached 258,000 BTC, 415 times the January 2020 level.

Second, stablecoins. In January 2020, stablecoins were worth about $5 billion in total, similar to stock tokens today. By May 2021, they broke $100 billion, because they became the underlying asset for borrowing, lending, and trading in every DeFi app. Lending markets and exchanges adopted them first, and supply then exploded. Stock tokens are at the starting point of that path. Kamino and Jupiter Lend hold $37 million in xStock collateral against $9.7 million in borrowings, only 6% of stock tokens outside Solana minting wallets.

Stablecoins also found jobs beyond trading: payments, remittances, agentic finance, all wanting to use them because of cheap transfers and near-instant settlement. What's the equivalent for stock tokens?

First, access. You live in Lagos or Jakarta, can't open a US brokerage account, but you can use USDT in your wallet to buy $50 of Nvidia. This is "a dollar deposit, stock edition," and it fits the holding data: 97% of positions are under $100. Second, spending, as Ether.fi's card already lets you spend a loan borrowed against stock tokens. Third, credit, which is where the money is.

But credit has a ceiling. Kamino lends up to 73% on S&P 500 tokens, 55% on Nvidia and Tesla, 40% on Apple, and 30% on Strategy, Circle, and Robinhood. Borrowers are still far from the limits, but the limits determine how far this stage can go. Lenders must be able to sell your collateral at any time, including Sunday—when the stock market is closed and token trading is thin. That's where stock tokens get a bit tricky.

Wall Street Closes for the Weekend, On-Chain Stocks Don't

Unlike regular stocks, on-chain stock tokens trade on weekends too, and the deepest, most active market on Sunday is perpetual contracts. If perps can track where the stock will open on Monday, lenders dare to let you borrow more; if they're way off, lenders have to lower the limits. So weekend prices may determine how much you can borrow against stock tokens.

How accurate is it, really? We took 19 stocks and indices, covering 30 weekends since March, and compared the move in trade[XYZ] perps from Friday's close to 8 p.m. New York time on Sunday with the stock's Monday opening gap.

When the gap exceeds 1%, perps get the direction right 69% of the time. But by Sunday night, they've only priced in about a quarter of the move, with a median of 26%. By 9 a.m. Monday, after overnight and pre-market trading, the priced-in share rises to 91%. On Monday, June 15, Strategy opened up 7.5%, while perps had already risen 6.4% by Sunday night. On Monday, September 21, Circle opened up 6.9%, while perps had moved only 0.1%.

So perps are a useful directional signal but a poor weekend price. A correct, continuous price feed is the constraint here. The better perps get at pricing weekends, the more stock tokens can serve as collateral; and the more collateral needs hedging, the larger perp volumes become.

Bring Your Stocks On-Chain

At the end of June 2025, foreign investors held $19.86 trillion in US equities, 18.3% of the total value of US stocks. Stock tokens currently equal only 0.016% of foreign holdings. $500 billion is 2.5%, and $1 trillion is 5%.

Crypto capital alone can't get there. If one-tenth of all stablecoins moved into stock tokens, that would add only about $31 billion, plus a bit more created by the gap. The rest of the growth must come from stocks already held in brokerage accounts.

That will only happen when established companies find tokenized stocks profitable. Once one company makes money, the floodgates open.

In 2021, Franklin Templeton put a US government money market fund on-chain, becoming the first US-registered fund to record share ownership on a public chain. For the next three years, it was largely alone. In March 2024, BlackRock launched BUIDL, when tokenized Treasuries had only 17 products and $1.1 billion. Then WisdomTree, Fidelity, Invesco, and JPMorgan followed, and today tokenized Treasuries have 109 products and $15 billion. Franklin proved the pipes work, and BlackRock's entry got everyone moving.

On the stock side, who moves first? Look at Robinhood. It's the only large traditional broker already issuing stock tokens, now covering more than 120 countries. In September, its token trading volume was $6.6 billion, 42% of all on-chain stock token volume. Robinhood Chain generated over $30 million in fees in September. Fees are indeed falling, but at least we know how big the possibility is.

The one with the most conversion potential is Interactive Brokers. It has 5.19 million accounts and $930 billion in client equity, with most accounts outside the US at the end of 2024. If clients converted 5% of that into tokens, the market would expand roughly 15 times.

Its CEO said in July 2025 that stock tokens "look like a great opportunity to do much worse than buying regular shares." The reason is that stock tokens have wide spreads, and thin liquidity naturally causes wide spreads. Its clients can already trade 24/5, with a borrowing rate of 5.38%, so a year ago there really was no incentive to offer tokens. But things are changing. The firm's overnight trading volume rose from 3.8 million a year earlier to 10.9 million in the second quarter. Clients clearly want more trading hours, and tokens are one of the easier ways to provide them.

Stablecoins have already shown that waiting costs too much. Circle launched USDC in September 2018, when stablecoins were only a few billion dollars, and today it accounts for 24% of supply. PayPal launched PYUSD in August 2023, when supply was $124 billion, and today it accounts for only 0.9%. Stripe paid $1.1 billion for Bridge in October 2024 rather than building infrastructure itself. When traditional players see evidence that tokenized stocks have found product-market fit, they won't be able to sit still.

Crypto exchanges already recognize the potential. Binance, Robinhood, Kraken, Coinbase, OKX, Bybit, and Bitget are all selling stock tokens. We believe Robinhood is to tokenized stocks what Circle was to stablecoins in 2018.

Real Shares Finally Go On-Chain

By stage four, the mask comes off. The company's transfer agent records the shares themselves on-chain, with no offshore issuer, no separate custodian, and no claim on someone else's account. The token is the share.

What does that bring? You get the rights attached to the shares, including voting and dividends. There's no arbitrage gap between token and share, because they're the same thing. As long as the transfer agent approves two wallets, the shares can move at any time, settling in seconds. The company can also see who really holds, rather than a single line reading "Cede & Co."

Has anyone done it? Yes, a small group. Galaxy and Forward Industries record shares on Solana through Superstate. Superstate is the transfer agent and updates the register as tokens move; Exodus also connects to Solana through it. Securitize is likewise a transfer agent and has done it for Currenc Group and itself: its stock has been a token on Avalanche and Solana since it listed on the NYSE on July 2; on October 8, fewer than 100 wallets held $329 million in SECZ. Figure issues shares on its own chain.

Native shares on-chain are already useful. Forward Industries' shares are the largest single-stock collateral on Kamino, at $23 million, more than all ten xStocks in Kamino's xStocks market combined.

Onshore markets are moving too. DTC's tokenization service was originally set for a full launch in October; Nasdaq plans to launch equity tokens in the second quarter of 2027; and the SEC's September exemption allows US venues to trade tokenized stocks in permissioned pools, capped at 0