Meanwhile, the reverse pathway is also taking shape, with on-chain assets entering traditional markets through compliant restructuring. In a notable move, a Nasdaq-listed company recently rebranded as Tron Inc., integrating its public chain ecosystem and TRX token into its core strategy, a clear sign that the fusion of crypto assets and mainstream finance is no longer just theoretical but is materializing within formal regulatory frameworks.
Golden opportunity or hidden trap? The answer depends on whether the loop can be closed:
Can real-stock backing and transparent custody be guaranteed?
Can liquidity and market-making be sustained long term?
Can regional compliance keep pace with innovation?
HTX Ventures will break down the business model, market players, regulatory landscape, typical risks, and future evolution in this report, helping you determine whether tokenized stocks are the golden gateway to RWAs or merely a grayscale trap in the capital markets.
I. Why Are Crypto Investors Interested in Stocks?
Since blockchain’s inception, almost every asset that can be tokenized has either already been or is in the process of being brought on-chain. From the earliest stablecoins to traditional financial assets such as real estate, bonds, and funds, and now the increasingly popular tokenized stocks, every innovation milestone has sought to break down the hurdles and barriers in traditional finance through blockchain.
At its core, tokenized stocks are about converting stock assets in the traditional financial market into digital tokens on the blockchain. In this way, 24/7 global trading, fractional share purchases, and more efficient cross-border transactions could become a reality. The reason why this model has drawn much attention is that it directly addresses long-standing pain points faced by retail investors globally, especially those from emerging markets, such as the difficulty in opening accounts, remittance hurdles, and mismatched trading hours.
However, tokenized stocks are not a new concept. They first appeared briefly in 2020, when exchanges like FTX and Binance all tried to launch such products but ultimately failed under intense regulatory pressure.
II. Lessons from Early Attempts at Tokenized Stocks: FTX and Binance
In 2020, FTX was one of the first exchanges to explore tokenized stocks. It partnered with the German securities firm CM-Equity to purchase real shares for custody and then issued tokenized versions of those stocks as ERC-20 tokens, representing companies such as Tesla, Apple, and Coinbase. These tokenized stocks were then sold to global users on its platform.
FTX’s initial rollout was impressive and attracted many retail investors from emerging markets. But this model quickly caught the attention of securities regulators in Europe and the U.S. Germany’s BaFin and the U.S. SEC both issued stern warnings that such offerings qualified as public sales of securities, which mandated them to comply with securities regulations and obtain relevant licenses. Unable to meet these compliance requirements, FTX was forced to swiftly delist its tokenized stock products.
In 2021, Binance introduced a similar product and used almost the same model to trade tokenized stocks of Tesla, Coinbase, and Apple. However, Binance’s effort was also short-lived and was shut down soon afterward under pressure from regulators across multiple countries.
The setbacks faced by FTX and Binance sent a clear signal: the primary challenge facing tokenized stocks is not technology but compliance and regulation.
III. Why Are Tokenized Stocks Back in the Spotlight?
Despite having previously faced strong regulatory pushback, tokenized stocks made a comeback in 2024–2025, once again becoming the center of market attention. There are four primary reasons behind this:
Policy and Political Factors: In 2024, Donald Trump openly endorsed crypto development, fueling market expectations about a more lenient regulatory climate. SEC Commissioner Hester Peirce also expressed interest in a regulatory sandbox environment, suggesting a gray zone in policy interpretation.
Entry of Traditional Financial Institutions: Traditional giants like BlackRock and Franklin Templeton have begun tokenizing funds, bonds, and other assets through blockchain. Their participation serves as an example, encouraging other traditional players to test the waters.
Mature Technical Conditions: Unlike in 2020, rapid advancements in blockchain technologies like Solana, Base, and Arbitrum have slashed on-chain transaction costs, improved speed, and made liquidity easier to achieve.
Persistently Strong Demand from Retail Users: Retail investors in regions such as Southeast Asia, South Asia, and the Middle East still have a strong appetite for U.S. stocks. These users hold substantial amounts of USDT but are locked out of traditional U.S. stock markets. Tokenized stocks directly fill this gap.
IV. Why Are Tokenized Stocks Closely Tied to the Shadow Dollar System and the Stablecoin Hype?
As a “second-layer evolution” of on-chain dollars via stablecoins, tokenized stocks directly convert retail users’ shadow dollars into shadow U.S. stocks, transforming RWAs from “assets in static custody” into “composable dynamic assets”. The hotter stablecoins get, the more room this model has to grow, but at the same time, regulators’ concern over the shadow dollar will rise accordingly.
Stablecoins Are Essentially the Global “Gray Channel” of the Shadow Dollar System
● Dollar-pegged stablecoins (USDT and USDC) are no longer just “crypto payment tools”; they now function as “dollar proxies” that bypass traditional cross-border clearing networks.
● In many emerging markets, stablecoins act as local users’ shadow claims on the dollar. In countries like the Philippines, Pakistan, Argentina, and Vietnam, users may not hold local currencies, but with stablecoins, they effectively hold “dollars”.
● Therefore, from a retail investor’s perspective, holding USDT is almost equivalent to having dollar deposits, only more flexible. Users can move in and out of the crypto market at any time and even swap directly into tokenized stocks.
● As soon as tokenized stocks entered the picture, they naturally became a new use case for stablecoins: USDT and USDC could directly represent the on-chain shadow prices of Apple and Tesla, eliminating the need to convert to fiat currency or open an account with a U.S. broker.
The Hotter Stablecoins Get, the More Room RWAs Have to Grow
● With a circulation of over $115 billion at one point in 2024, USDT has become the world’s largest “dollar alternative”, circulating much faster than traditional dollar wire transfers.
● With tremendously liquid stablecoins, on-chain RWAs (bonds, funds, real estate, and stocks) naturally need new “reservoirs”; otherwise, USDT would remain locked in CEXs for futures trading, disconnected from real-world assets.
● Tokenized stocks are one of the most accessible and liquid RWAs in the world. Retail users are already familiar with the underlying assets, and market makers can price them based on actual secondary-market quotes, making them far easier to trade than real estate, art, or accounts receivable.
Shadow Dollar System + Tokenized Stocks Turn U.S. Stocks Into Second-Layer Dollar Assets On-Chain
● From a regulatory standpoint, the pairing of tokenized stocks and stablecoins effectively creates a “shadow U.S. capital market”:
○ Stablecoins act as a shadow substitute for the dollar;
○ Tokenized stocks turn the equity returns of U.S. companies into shadow assets;
○ Together, they allow non-U.S. residents to trade “shadow U.S. stocks” with “shadow dollars” 24/7.
● This combination circumvents the U.S. brokerage system, the SWIFT network, and even the U.S.’s direct tax reporting framework (in theory).
● That’s why regulators are highly sensitive to it. What they’re keeping an eye on isn’t just the mechanics of the tokens, but the “spillover of dollar influence“.
This Explains Why Kraken, Bybit, Robinhood, and Backed Dare to Make a Comeback in 2024–2025
● Stablecoins have proven themselves worldwide with fast transactions and convenient cross‑border payments, while on‑chain RWAs now enjoy an endorsement from prominent companies such as BlackRock and Franklin Templeton.
● Platforms like Kraken and Bybit see this “shadow dollar” system as their chance to bring retail users in from the gray zone.
● Robinhood’s pilot launch of tokenized stocks in the EU reflects its confidence in USDT-driven traffic in non-U.S. markets, where it can tap into user groups it previously couldn’t reach through on‑chain notes.
V. The Three Main Models of Tokenized Stocks
Although “tokenized stocks” sounds simple, it follows more than one path in actual implementation. Depending on whether actual stocks are held in custody and how the tokens are issued and traded on-chain, there are three mainstream approaches in the market:
The first is Real Stocks in Custody + On-Chain Token Issuance, the second is the Contract for Difference (CFD) model, and the third is pure DeFi synthetic assets.
The three models have respective pros and cons, and the regulatory pressure they are facing, their liquidity design, and user-fit scenarios are also notably different. Understanding these differences is key to making sense of the entire tokenized stock sector.
Model 1 | Real Stocks in Custody + On-Chain Token Issuance
This is the mainstream approach currently adopted by Kraken and Bybit, and it is the most robust approach from a compliance standpoint.
How It Works
● Licensed issuers or brokers (such as Backed Finance or Dinari) purchase real stocks (e.g., Apple or Tesla) from the traditional secondary market.
● These stock assets are then held in custody by regulated custodians (such as BitGo or Anchorage), ensuring that all holdings are authentic and verifiable.
● Based on the shares held in custody, issuers mint corresponding tokens on-chain at a 1:1 ratio. For example, 1 Apple share = 1 AAPLx (or bAAPL), which are deployable on networks like Solana or Base.
● Users can purchase these tokens on platforms like Bybit and Kraken using USDT, thereby indirectly gaining the on-chain assets pegged to real stocks.
Key Features
This seemingly ideal model actually comes with the following limitations:
● Though pegged to real stocks, most tokens do not grant voting rights or dividends. Platforms like Robinhood and Kraken clearly state on their websites: “This is not shareholder rights.”
● If users wish to redeem tokens for actual stocks, they typically must complete rigorous KYC verification, follow the custodian’s redemption process, and possibly pay extra fees. Some issuers even disallow retail users from redeeming fractional shares.
● Therefore, the vast majority of users purchase these tokens purely to capitalize on stock price fluctuations, and very few actually exercise shareholder rights.
Why Are Kraken and Bybit Still Doubling Down on This Model?
● Compliance Buffer: Since the tokens are backed by real stocks held in transparent custody, it is possible to shift most of the responsibility to issuers (e.g., Backed) when under regulatory pressure.
● DeFi Composability: Tokens are transferable on-chain and composable across chains. For example, Kraken’s AAPLx can be sent to a Solana wallet and used for liquidity provision on Jupiter or for yield farming on Kamino.
● Stronger Appeal to Retail Users: Compared to CFDs or synthetic assets, tokenized stocks backed by real stocks sound more authentic, which helps lower users’ psychological barriers and makes market education easier.
Special Case | Robinhood’s Full-Chain Integration Approach
Robinhood takes an even bolder path. With its U.S. broker license, it is already capable of handling real stock trading and custody in-house. The company is currently developing Robinhood Chain to link stock accounts directly on-chain. It aims to integrate in-house custody, on-chain issuance, and matching, while connecting to Bitstamp for global liquidity. This model is essentially a “brokerage version of Binance Chain”, where Robinhood controls the entire process from note issuance and market-making to data flow, keeping all profits, users, and traffic within its own ecosystem.
However, it is worth noting that such a highly closed compliance framework and technical barriers make this model not easily replicable by ordinary exchanges or wallet providers in the short term. The investment required to build this ecosystem is far beyond the reach of smaller players.
Model 2 | CFDs: A Simple Wrapper with a Classic Approach
Compared with real stocks in custody, CFDs (Contracts for Difference) may seem the simplest but are one of the most widely adopted approaches by exchanges today.
How It Works
● Typical players like Bybit CFD and PrimeXBT employ similar structures.
● Users select products like “Apple CFD” via MT5, MT4, or Bybit’s built‑in CFD page and open positions based on expected price movements.
● The counterparty to each trade is the platform itself or an external liquidity provider (LP), without needing to hold the underlying stock or keep physical items in custody.
● Spreads, slippage, and leverage parameters are set entirely by the platform. Trades are essentially bets on prices against the platform or its LPs, without stock delivery or shareholder registration.
Why Are CFDs So Popular?
● Fast Deployment: Upon connection to mature LPs and real-time stock data, trading starts once orders are listed.
● Lower Compliance Pressure: In most jurisdictions, CFDs are classified as derivatives. As long as there is no physical stock delivery, they typically fall outside the strictest securities regulations.
● High User Acceptance: Most crypto traders are already familiar with BTC and ETH futures and can switch to U.S. stock futures without extra learning, as the operational logic is identical.
Bybit’s Dual-Track Strategy
Bybit’s moves in recent months provide a typical example:
● On the one hand, it has partnered with Backed to introduce xStocks (like AAPLx and TSLAx), catering to users who prefer “real-stock backing” and competing directly with platforms like Kraken and Robinhood.
● On the other hand, Bybit has continued to offer its traditional CFD products to meet demand from speculative traders seeking high leverage and around-the-clock opportunities to profit from price swings.
This dual-track hybrid model enables Bybit to serve both conservative users who prefer the assurance of real stock-backed assets and high-frequency speculators pursuing leveraged volatility within a single trading system, thus maximizing both liquidity sources and user base.
Risks: What Users Should Watch Out For
While CFDs are simple and accessible, the risks associated with them must not be overlooked:
● No Shareholder Rights: CFDs grant no voting or dividend rights and are not tied to any shareholder register.
● Counterparty Is the Platform or LPs: User profits mean losses for the platform or LP. If trades are too precise, some platforms may manage their risk through slippage or forced liquidation mechanisms, creating the possibility of negative equity and widened slippage.
● Essentially a Regulated Betting Market: Therefore, CFDs are better suited for short-term trading on price fluctuations and do not share the long-term value characteristics of stocks.
Model 3 | Pure On-Chain DeFi Synthetic Assets
Compared with the first two models, pure on-chain DeFi synthetic assets represent the most fundamental approach to decentralization. Representative projects include early-stage Mirror Protocol and the currently active Synthetix.
How It Works
● Users stake stablecoins (such as UST or sUSD) in smart contracts as collateral to mint synthetic assets.
● The protocol calls oracles to fetch real-time stock prices of underlying assets. For example, Apple stock is traded at $180.
● Based on oracle data, smart contracts automatically mint synthetic tokens for corresponding stocks such as “mAAPL” or “sTSLA”. These tokens only track stock prices and do not represent actual stock ownership.
● Users can use tokens for liquidity provision (LP) through on-chain DEXs (such as Terraswap, Uniswap, Curve), trade freely, or build indices or apply leverage.
Key Advantages
● Fully On-Chain: These assets are not reliant on centralized matching or custody, with issuance, circulation, and burns all executed by smart contracts.
● Flexible Composition: These assets can be combined with other modules in the DeFi ecosystem to derive collateralized loans, options, structured products, and more.
Limitations and Risks
● No Real-Stock Backing: Synthetic assets depend entirely on oracle-fed prices and have no backing from actual stock ownership.
● High Systemic Risk: If an oracle is compromised or malfunctions, the price peg will fail, and the contract may lose its repayment capacity.
● Liquidity Depletion Risk: Unlike centralized market making, the market depth of on-chain LP hinges on continuous order placement and profit distribution from users. Without sustained incentives, liquidity can drop rapidly.
Mirror Protocol’s failure is a classic example: after the collapse of the Terra ecosystem and UST’s depeg, all synthetic stocks on Mirror, like mAAPL and mTSLA, became worthless.
Synthetix is still running, with some sAAPL and sTSLA circulating on Optimism and its main protocol as collateral or in synthetic debt pools. However, both its user base and TVL have shrunk dramatically from their peak. Purely DeFi-based tokenized stocks are far less popular than stablecoins and leveraged ETH products.
Three Models of Tokenized Stocks
VI. Players Breakdown: Who Are Involved in this Sector
The current wave of tokenized stocks has already formed a clear supply chain, linking upstream issuance, custody, platform liquidity, and end-user distribution.
Backed Finance: The Core Issuer Behind the Scenes
● Headquartered in Switzerland, Backed is one of the leading issuers of tokenized stocks. It is purchasing real stocks through traditional brokers and uses Chainlink’s Proof of Reserve (PoR) to disclose custodial details on-chain in real time.
● Its major clients include Kraken, Bybit, and Ondo. Backed’s tokenized stocks are considered “compliant spot assets eligible for listing” that CEXs can list quickly for retail traders.
● The core logic is that issuers bear the responsibility for securities compliance and custody, while CEXs handle only frontend KYC/AML to minimize direct exposure to securities issuance liabilities.
Ondo & Securitize: Alliance-Oriented Player and Traditional Digital Securities Service Provider
● Ondo spearheaded the “Global Stocks Alliance”, partnering with Solana Foundation, BitGo, Fireblocks, Jupiter, and others to develop standards for cross-chain operations, custody, and liquidity.
● Securitize is an early player in digital securities, primarily serving traditional enterprises by offering equity tokenization and connecting them with qualified investors. Positioned toward the B2B market, it does not directly target retail users.
Dinari: Tackling U.S. Compliance Head-On
● Based in the U.S., Dinari aims to deliver truly compliant tokenized stocks, “dShares”, by obtaining compliant licenses such as Reg D and Reg CF and securing ATS (Alternative Trading System) qualification.
● Unlike Backed, Dinari hopes to offer users optional shareholder privileges (e.g., dividends) in the future. However, the extremely high cost of U.S. compliance poses major challenges, requiring sustained investment in broker licenses, custodial infrastructure, and legal counsel.
● Dinari currently follows a B2B model, partnering with wallets or exchanges to introduce tokenized stocks as white-label products.
Kraken: A Leading Compliant CEX
● Kraken has long positioned itself as a compliance-focused CEX, supported by European and U.S. users’ trust in licenses and compliance.
● Its xStocks module works closely with Backed: Backed is responsible for the custody of real stocks, while Kraken provides matching, listing, wallets, and API integration. Its PoR is publicly verifiable, and the tokens can be transferred on-chain to networks like Solana for secondary liquidity through LPs and DEXs.
● Kraken pays special attention to compliance boundaries, implementing IP blocking and timezone-based KYC restrictions for U.S. users to stay clear of SEC red lines.
Bybit: Dual-Track Hybrid Strategy Balancing Spot and Derivatives
● The biggest difference between Bybit and Kraken lies in the fact that Bybit operates two parallel product lines: tokenized real stocks and CFDs (Contracts for Difference).
● CFDs are offered by Bybit through integrations with external liquidity providers (such as IS Prime and Finalto) and the MT5 system, catering to the needs of high-frequency speculative traders and generating revenue from spreads and fees.
● For tokenized real stocks, Bybit partners with Backed to list xStocks (like AAPLx and TSLAx), serving users who prefer “real-stock backing”. Both user groups can be converted simultaneously on the platform.
Robinhood: Integrated Chain of Proprietary Brokerage
● Robinhood holds a U.S. broker-dealer license, which allows it to offer real stock trading and custody.
● It has developed the Robinhood Chain, moving stock accounts on-chain, supported by its proprietary wallet and trading/matching systems. Pilot programs have been launched in the EU (Robinhood Europe), where over 200 stocks and ETFs are packaged into token products for EU users to trade, thus bypassing U.S. regulation.
● Bitstamp provides a liquidity bridge, allowing users to later use the tokens as collateral or incorporate them into structured products in DeFi scenarios.
● This “internal broker chain” approach enables Robinhood to close the loop across issuance, custody, matching, and liquidity, dramatically improving user retention and data control. However, it requires strong compliance credentials and substantial capital, making it challenging for smaller players to replicate in the short term.
Republic: Specializing in Rare Non-Listed Equity
● Unlike other projects that target publicly listed stocks, Republic focuses on tokenizing rare private equity in non-listed companies (such as SpaceX and OpenAI). It typically adopts an SPV (Special Purpose Vehicle) note model, allowing retail investors to invest indirectly in equities that were previously out of reach.
● The risk lies in potential authorization issues for certain private equity tokens. For instance, OpenAI has publicly stated that related products launched by Robinhood Europe were unauthorized, and the SEC has launched an investigation.
VII. Global Regulatory Overview
U.S.: Securities Law as a Hard Constraint
● Core Principle: Tokenized stocks ≠ non-securities. As long as stocks are mirrored into tokens, and related products and services are offered to U.S. users, SEC securities regulations are automatically triggered.
● Compliance Requirements: Issuing and selling tokenized stocks requires a broker-dealer license, ATS (Alternative Trading System) license, and a custody and information disclosure architecture in line with securities law. Meanwhile, compliance counsel is also required to review the issuance documentation.
● Regulatory Stance: The SEC has always made its stance clear – “Tokenization doesn’t change the nature of the underlying asset.”
● Lessons Learned: FTX and Binance attempted tokenized stock offerings in 2020–2021, but they lacked proper compliance credentials. Under pressure from the SEC, FINRA, and BaFin, they were ultimately forced to delist the products.
EU: Dual Oversight under MiFID II and MiCA
● MiFID II: Any product that involves securities sales and targets retail or institutional investors must strictly comply with the Markets in Financial Instruments Directive. It is prohibited to label something a “token” to evade existing obligations under securities law.
● MiCA: MiCA primarily governs crypto assets and stablecoins, but tokenized stocks with real equity backing may also fall under its regulatory framework.
● Regional Practice: Robinhood Europe has carried out pilot programs in the EU, offering tokenized stock products through an SPV structure. Once a token is deemed to represent an actual security, additional exemptions should be applied for or information should be fully disclosed as per local requirements.
Asia and the Middle East: Active Gray-Zone Pilots
● Regulators, including Singapore’s MAS, Switzerland’s FINMA, and the UAE’s ADGM/DFSA, have created regulatory sandboxes for RWAs (real-world assets), allowing small-scale pilot tokenization programs, provided they mainly target non-U.S. clients and qualified regional investors.
● Hong Kong remains cautious on security tokenization. Most RWA activity there centers on bonds, funds, and structured notes, with large-scale tokenized stock operations yet to be approved.
VIII. Real-World Use Cases | How Global Retail and Institutions Are Participating
The adoption of tokenized stocks extends beyond retail investors.
From individual traders to high-frequency speculators, from small and medium-sized CEXs and regional wallets to traditional brokers and DeFi protocols, everyone can find their own entry points and viable paths in this sector.
1. Ordinary Retail Investors
● The most straightforward use case is to buy small amounts of xStocks, using USDT to access tokenized stocks of companies like Apple and Tesla and track their price fluctuations.
● The primary demand is to address the pain point of users who don’t have U.S. brokerage accounts but want a low-barrier way to get started.
● Key Understanding: It is important to clarify that holding tokens does not confer shareholder rights such as dividends or voting rights.
2. High-Frequency Speculators
● This group focuses on tokenized stocks in order to exploit short-term price spreads and volatility arbitrage.
● CFDs are the most suitable, as they support leverage, flexible hedging, and T+0 position closing.
● Key Understanding: Traders must grasp slippage, leverage risk, and counterparty trading mechanisms where positions are taken against them to avoid forced liquidation or negative equity.
3. Small and Medium-Sized Exchanges/Regional CEXs
● Without full broker-dealer licenses, these platforms can adopt a hybrid model combining CFDs and tokenized partnerships.
● They provide spot and CFD matching at the frontend and partner with issuers like Backed and Dinari at the backend to onboard real note-backed tokens, capturing gray-zone traffic and earning fee revenue.
● Key Understanding: It is essential to define reasonable service regions to steer clear of strictly regulated markets like the U.S.
4. Traditional Brokers
● Brokers with mature legal and financial capabilities favor a model combining self-built chains and proprietary licenses.
● Robinhood and Bitstamp are already exploring this path in European and U.S. markets: On-chain accounts and in-house custody allow them to profit from both matching and custody.
● Key Understanding: Mature licensing systems, compliant custody, and multi-jurisdictional legal support are needed.
5. Wallets/Agents
● In emerging markets, some wallets or OTC teams prefer to use white-label tokenized products and list notes from issuers like Kraken or Backed into their own apps or mini-programs to capture traffic and earn matching commissions.
● This model works especially well in regions like Pakistan or the Philippines where retail investors face high barriers to opening accounts and gray-market demand is high.
● Key Understanding: It is critical to find credible issuers and ensure compliance to mitigate local regulatory risk.
6. DeFi Protocols
● Tokenized stock assets can be combined with on-chain bonds or stablecoins to serve as essential building blocks for composite derivatives within the DeFi ecosystem.
● Common use cases include providing bilateral liquidity in LP pools or serving as collateral and leverage within lending protocols like Aave and Compound.
● Key Understanding: The security of oracles and clearing mechanisms must be ensured to avoid oracle attacks or price failures that hit projects like Mirror.
IX Risk Points | Truths and Common Pitfalls
While tokenized stocks may seem to offer global users a convenient channel to trade U.S. stocks, the underlying risks and operational hurdles are often underestimated. Below are the five key risks to watch out for:
Risk 1 | Most Tokens Do Not Grant Shareholder Rights
Platforms such as Robinhood, Backed, and Kraken clearly state in their official FAQs:
“This token does not represent actual shareholder rights.”
In other words, users only hold on-chain instruments pegged to stock prices and are not shareholders in the traditional sense.
● Users cannot automatically access companies’ annual reports, participate in AGMs (Annual General Meetings), or vote as shareholders;
● Dividends are generally excluded unless the issuer has explicitly designed a profit-sharing mechanism, which is extremely rare in reality.
Therefore, for most users, what they hold is merely a price proxy, rather than an actual shareholder stake.
Risk 2 | Redeeming Real Stocks Is Far More Complicated Than It Seems
Although most tokenized note products theoretically support 1:1 redemption, the barriers are high in practice:
● There is usually a minimum redemption threshold (e.g., at least 1 share, with some products requiring 100 shares or more);
● Cooling-off periods are often imposed, ranging from 30 to 90 days;
● Users must redo full KYC, submitting documents like proof of address;
● Most redemptions incur additional fees, typically ranging from 0.5% to 2% of the face value.
As a result, the vast majority of retail users rarely opt for redemption in practice.
Risk 3 | Insufficient Liquidity Can Lead to “Empty Pools”
Although tokenized stocks are traded through on-chain liquidity pools or CEXs, actual order book depth is often limited:
● For example, the main LP pools of Backed’s AAPL and TSLA on Solana generally hold only a few million dollars;
● Day-to-day market-making is largely sustained by orders from a small number of liquidity providers such as Kraken or Bitstamp;
● Once mainstream market makers pull out or an exchange delists a token, users may have to offload their holdings through OTC or other non-mainstream channels, significantly heightening liquidity risk.
Risk 4 | Oracle Failures Pose Critical Hidden Threat to On-Chain Synthetic Assets
Pure DeFi synthetic assets rely on oracles like Chainlink and Pyth to feed real-time stock prices. In cases of false pricing attacks, API errors, or oracle manipulations, the synthetic tokens minted by smart contracts will no longer be accurate:
● A classic example is the Mirror Protocol in the Terra ecosystem: After UST depegged and LUNA collapsed, oracle failures caused many synthetic assets like mAAPL and mTSLA to plunge to zero.
Risk 5 | Cross-Border Compliance and Regulatory Crackdowns Can Happen Anytime
Tokenized stock projects can trigger oversight from regulators such as the SEC and FINRA as soon as they target U.S. residents or involve cross‑border securities sales:
● Robinhood Europe launched tokenized shares of OpenAI and SpaceX without official authorization. Regarding this, OpenAI has publicly denied issuing such shares, and a regulatory investigation has been triggered.
● Cases like Binance and FTX offer valuable lessons. The former was forced to delist, while the latter ultimately faced bankruptcy liquidation due to compliance failures.
X. Future Outlook | Three Potential Evolution Paths
As part of RWAs, tokenized stocks are just getting started. Over the next three years, it may evolve along three primary paths:
Scenario A | Brokers Go On-Chain with Proprietary Closed Loops
Robinhood is highly likely to double down on its all-in strategy: building its own blockchain, securing compliance licenses, managing custody of real stocks in-house, issuing tokens on-chain, and integrating matching and settlement into a proprietary system.
If the SEC allows for greater flexibility in compliance pathways, Robinhood could achieve a fully integrated “broker + wallet + blockchain” stack.
If successful, this path would resemble a “compliant Binance Smart Chain”, with the key distinction that its underlying assets would be real stocks and ETFs rather than crypto-native tokens.
Scenario B | Breakthroughs First Made in Regional Gray Markets
Regions such as Abu Dhabi, Singapore, and Switzerland have already incorporated RWAs into their official innovation pilots, opening the door for early experimentation with the implementation models of tokenized stocks and other gray-zone assets.
In the future, we may see more region-specific models:
● Americas and the EU will primarily rely on local licensing systems and domestic brokers;
● Emerging markets in the Middle East, Southeast Asia, and Africa are poised to become major distribution hubs for tokenized stocks operating in regulatory gray zones worldwide.
Kraken, Bybit, Ondo, and other platforms are expected to intensify their presence in these regulatory gray zones, focusing on non-U.S. user traffic and the opportunities created by licensing flexibility.
Scenario C | DeFi Composition and Modular Pathways
If the DeFi space continues to gain momentum in the new cycle, tokenized stocks may evolve into composable financial Lego blocks, becoming an integral part of on-chain RWA composition strategies.
● For example, tokenized bonds (e.g., Ondo T-bills), tokenized stocks (e.g., Backed AAPLx), and stablecoins (e.g., USDC) can be bundled into structured on-chain notes or index products.
● Tokenized stocks can also be added to liquidity pools (LPs) for bilateral market-making, providing greater depth for on-chain funds.
● Users can also use these assets as collateral in lending protocols such as Aave and Compound to enable higher leverage, creating more complex, yield-generating strategies within the DeFi ecosystem.
Once this DeFi composition pipeline is fully operational, on-chain RWAs will no longer be simply about note issuance or unidirectional transfers; they will form a closed-loop liquidity system that is collateralizable, composable, and redistributable.
Scenario D | Non-Compliant Perpetual Futures and Gray-Zone Matching
Apart from mainstream compliance pathways and on-chain DeFi composition, a gray-zone branch remains active in the market and should not be overlooked:
If regulatory pressure fails to create globally consistent constraints, we may see the rise of small and medium-sized trading platforms offering non-compliant perpetual stock futures.
● These platforms may operate as CEXs or depend on anonymous on-chain derivatives protocols, directly tapping retail capital flows and offering matching services for perpetual stock futures with USDT.
● Perpetual futures function much like traditional CFDs but can be designed with higher leverage, automatic renewal, and no requirement for holding real stocks or custodial assets. They are purely instruments for price speculation.
● Some projects may encapsulate their frontends on-chain (e.g., cross-chain DEXs or anonymous derivatives pools), leveraging on-chain liquidity and anonymous accounts to attract risk-seeking users while minimizing the cost of compliance traceability.
Once the market’s demand for short-term leverage on tokenized stocks continues to rise, these non-compliant matching and perpetuals may quickly gain traction in regional markets, serving as a gray-zone workaround that circumvents regulation and satisfies the needs of high-frequency speculators.
Nonetheless, this branch is also extremely risky:
Any involvement of cross-border fund flows or U.S. users may trigger compliance actions from regulators such as the SEC, CFTC, or other jurisdictional bodies at any time. Users then face potential losses from sudden liquidity crunches, platform shutdowns, or extreme slippage.
XI. Reverse Integration: When On-Chain Assets Begin Entering the Stock Market
If tokenized stocks represent the migration of traditional financial assets onto the blockchain, something that happened recently may mark the beginning of a reverse trend: On-chain assets are now attempting to penetrate the traditional financial system, seeking to establish their credibility in mainstream capital markets through more compliant and structured means.
On July 25, a Nasdaq-listed company formerly known as SRM Entertainment officially rebranded as Tron Inc. and adopted a new ticker symbol, TRON. The company announced the divestment of its toy business and restructured its core assets around a TRX treasury strategy to support the development of the TRON DAO ecosystem, using TRX, the native token of the TRON blockchain, as its primary strategic reserve asset. It currently holds more than 365 million TRX, which are staked and managed through on-chain protocols such as JustLend to generate returns.
The day the news broke, Tron Inc.’s stock price surged by more than 55%, becoming the talk of the market. This not only represents a high-profile comeback of a crypto firm through a backdoor listing but also signals that on-chain native assets are exploring new avenues for building compliant financial structures.
It is worth noting that this is not the first time a publicly listed traditional company has disclosed its crypto holdings. Back in 2020, MicroStrategy became the exemplar of “crypto-holding listed company” for its ongoing BTC purchases, which were fully reflected in its financial reports. Companies like Tesla, Block, and Coinbase have also reported holdings of BTC, ETH, or stablecoins in their financial reports. What sets Tron Inc. apart from these companies is that:
● It is among the few listed companies whose core assets are public-chain tokens (TRX), with a corporate strategy centered on building an on-chain ecosystem.
● The project team does not hold direct equity but exerts “shadow control” through DAO governance and advisory structures, seeking to bridge on-chain governance with traditional equity structures under a compliant framework.
● Its asset operations rely more heavily on on-chain protocols (e.g., JustLend), and its yield mechanisms are more natively Web3.
This type of operation is no longer mere capital maneuvering but an active reshaping of the narrative: transforming tokenized assets into financial units that are recognizable, measurable, and compliantly tradable in traditional financial structures. Following stablecoins and crypto treasuries, this may become the next proving ground for connecting public blockchain ecosystems with TradFi.
Thus, we are now witnessing a “two-way embedding” between tokenized stocks and equitized on-chain assets:
● On the one hand, real-world assets like U.S. stocks and bonds are being brought on-chain, enriching the on-chain finance ecosystem and strengthening its ties to reality;
● On the other hand, native crypto assets are making their way into mainstream capital markets through compliant pathways, gaining additional liquidity and institutional backing.
This trend is no longer just an idea on paper. Instead, it is gradually materializing through cases such as exchanges like Kraken and Bybit promoting the tokenization of real stocks, and Tron Inc. going public via a backdoor listing. Together, they sketch out an early blueprint of an “on-chain Wall Street”: a bridge between decentralized asset structures and traditional market architectures.
Whether this ecosystem will eventually form a closed loop will depend on market-making capabilities, the regulatory climate, and the resilience of its institutional design. However, one thing is certain: the line between tokens and stocks is being redrawn.
XII. Conclusion | Treat or Trap? It All Comes Down to the Closed Loop and Structural Design
From the tokenization of real stocks driven by Kraken, Bybit, and Robinhood, to the compliant token issuance roles undertaken by Backed, Dinari, and Ondo, and finally to the reverse entry of on-chain assets into traditional markets represented by Tron Inc., the real competitive edge in this round of asset restructuring has never been just about smart contracts or product design; it lies in whether a complete on-chain financial closed loop can be built and sustained.
From a macro perspective, this model is a second-layer extension of the stablecoin system:
Stablecoins have enabled global retail traders to bypass traditional bank settlement networks, while tokenized stocks now connect these shadow dollars to “shadow U.S. stocks”. Together, the two form a kind of on-chain “Gray Wall Street”, breaking apart the closed-off capital markets of the real world into a 24/7, modular, composable on-chain marketplace.
For this model to truly take root, it requires a clear chain of accountability and strong compliance backing:
Real equity backing is essential to preventing hollow arbitrage; transparency in custody and issuance is critical to maintaining user trust; sustained market-making and liquidity are needed to support on-chain trading depth; and regional licenses together with cross-border compliance mechanisms are required to mitigate constraints imposed by the SEC, the EU, and other regulators worldwide.
Any slip in this process could render users’ notes worthless, turning them into stranded assets that grant no rights and cannot be redeemed.
For retail traders, tokenized stocks may be nothing more than a speculative channel for testing gray-zone pathways, while genuine shareholder status and long-term returns remain rooted in traditional brokerage systems.
For small and medium-sized CEXs, wallets, OTC desks, and DeFi protocols, this may be the fastest way to activate dormant stablecoin liquidity in the wallets and rapidly plug into the RWA sector.
Conversely, Tron Inc. has provided a radical yet pragmatic possibility: bringing crypto into traditional capital markets and establishing an institutional connection with stocks.
Whether it’s a treat or a trap ultimately hinges on who can build a bidirectional, composable, and operational closed-loop structure. Those who successfully navigate this path may be the ones to lead the next wave of assets and liquidity.
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About HTX Ventures
HTX Ventures, the global investment division of HTX, integrates investment, incubation, and research to identify the best and brightest teams worldwide. With more than a decade-long history as an industry pioneer, HTX Ventures excels at identifying cutting-edge technologies and emerging business models within the sector. To foster growth within the blockchain ecosystem, we provide comprehensive support to projects, including financing, resources, and strategic advice.
HTX Ventures currently backs over 300 projects spanning multiple blockchain sectors, with select high-quality initiatives already trading on the HTX exchange. Furthermore, as one of the most active FOF (Fund of Funds) funds, HTX Ventures invests in 30 top global funds and collaborates with leading blockchain funds such as Polychain, Dragonfly, Bankless, Gitcoin, Figment, Nomad, Animoca, and Hack VC to jointly build a blockchain ecosystem. Visit us here.
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The post first appeared on HTX Square.
