Original Title: "Understanding On-chain Stock Trading in One Article: Why are Crypto Enthusiasts Investing in Stocks while Wall Street is Focusing on On-chain Transactions?"

Original Authors: Changan, Amelia, Biteye

Over the past year, a thought-provoking phenomenon has repeatedly occurred:

While the U.S. stock market and precious metals have repeatedly hit new highs driven by the productivity dividend and AI narrative, the crypto market has been plagued by periodic liquidity dry-ups.

Many investors have sighed, "The end of the crypto world is in the stock market," and some have even chosen to exit entirely.

But what if I told you that these two seemingly opposite paths to wealth are undergoing a historic convergence through tokenization? Would you still choose to leave?

Why, from BlackRock to Coinbase, do all top global institutions in their 2025 annual outlook overwhelmingly favor asset tokenization?

This is not merely a "stock relocation." Starting from the underlying logic, this article will comprehensively break down the underlying logic of U.S. stock tokenization for you and take stock of the current trading platforms and frontline KOLs involved in stock tokenization.

Core: Beyond On-chain

U.S. stock tokenization refers to converting shares of U.S. stocks (such as Apple, Tesla, Nvidia, etc.) into tokens. These tokens are usually 1:1 pegged to the equity or value of real stocks and are issued, traded, and settled through blockchain technology.

In simple terms, it brings traditional U.S. stocks onto the blockchain, making stocks programmable assets. Token holders can receive the economic benefits of stocks (such as price fluctuations, dividends), but not necessarily full shareholder rights (depending on the specific product design).

As shown in the figure, the TVL of U.S. stock tokenization has grown exponentially since the fourth quarter of this year.

(Image Source: Dune)

Having clarified the basic definition of U.S. stock tokenization and its differences from traditional assets, a more fundamental question arises: since the traditional securities market has been operating for hundreds of years, why should we go to such lengths to put stocks on the chain?

Because the integration of stocks and blockchain will bring many innovations and benefits to the traditional financial system.

1. All-Day Trading: Breaking free from the trading hours of the NYSE and Nasdaq, the cryptocurrency market can achieve 24/7 uninterrupted trading.

2. Fractional Ownership Reduces Investment Threshold: In the traditional stock market, the minimum purchase is usually 1 lot (100 shares). Tokenization allows assets to be divided into tiny fractions, enabling investors to invest $10 or $50 without having to buy a full share of stock. Ordinary investors worldwide can also equally share in the growth dividends of top companies.

3. Cryptocurrency and DeFi Interoperability: Once stocks are tokenized, they can seamlessly interact with the entire decentralized finance ecosystem. This means you can do things with tokenized stocks that are either impossible or difficult with traditional stocks. For example, you can use tokenized stocks as collateral for cryptocurrency loans, or utilize tokenized stocks in LP farming to earn trading fees.

4. Global Liquidity Convergence: In the traditional system, the liquidity of U.S. stocks and other assets is somewhat disjointed, with macro tailwinds often "lifting only one side." After U.S. stocks go on-chain, crypto funds can participate in global high-quality assets in situ. This fundamentally transforms liquidity efficiency.

BlackRock's CEO Larry Fink has also stated: the next generation market, the next generation securities, will be security tokenization.

This also addresses the cyclical challenge of the crypto market - when U.S. stocks and precious metals are performing strongly, the crypto market often faces liquidity shortages, leading to capital outflows. However, if "U.S. stock tokenization" matures, bringing more high-quality traditional assets into the crypto world, investors may not all choose to exit, thereby enhancing the resilience and attractiveness of the entire ecosystem.

Of course, putting U.S. stocks on-chain is not a utopian solution that removes all friction. On the contrary, many of the issues it exposes are precisely because it is starting to enter the real-world financial order.

1. U.S. Stock On-Chain Is Not Truly Decentralized Stock

Most current mainstream U.S. stock tokenization products rely on regulated entities to custody real stocks and issue corresponding tokens on-chain. Users actually hold claims to the underlying stocks, not full shareholder status. This means that asset security and redemption depend to a large extent on the issuer's legal structure, custody arrangements, and compliance stability. If the regulatory environment changes or the custodial entity faces extreme risks, the liquidity and redeemability of on-chain assets could be affected.

2. Price Vacuums and Depegging Risks During Non-Trading Hours

During the US stock market's off hours, especially in perpetual contracts or products not pegged 1:1, on-chain prices lack real-time references from traditional markets and are more influenced by internal crypto market sentiment and liquidity structure. When market depth is insufficient, prices can easily deviate significantly and even be manipulated by large funds. This issue is similar to pre-market and after-hours trading in traditional markets but is further amplified in the 24/7 on-chain environment.

3. High Compliance Costs, Slow Expansion Speed

Unlike native crypto assets, stock tokenization naturally operates within a strong regulatory boundary. From security attribute identification, cross-jurisdictional compliance, to custody and settlement mechanism design, each step requires deep coordination with the traditional financial system. This makes it challenging for this track to replicate the explosive growth path of DeFi or Memes, with each step involving legal structures, custody, and licensing.

4. Deals a Blow to Shanzhai Narrative

When on-chain trading of quality assets like Apple or NVIDIA is possible, assets that lack real cash flow and fundamental support purely based on narrative will see their attractiveness significantly reduced. Funds are starting to rebalance between the "high-volatility imagination space" and "real-world returns." This shift is positive for the long-term ecosystem health but fatal for some emotion-driven Shanzhai assets.

In conclusion, bringing US stocks on-chain represents a slow, pragmatic, yet long-term deterministic financial evolution path. It may not fuel short-term frenzies but is likely to become a mainstream thread in the crypto world, deeply integrating with traditional finance and eventually settling as infrastructure.

Implementation Logic: Custodial Support vs Synthetics

Stock tokenization is the creation of tokens representing specific equity value issued on a blockchain. Depending on the underlying implementation, stock tokenization in the current market usually follows one of the following two models:

· Custodial-backed Tokens: Regulated entities hold real stocks in traditional securities markets as reserves and issue corresponding tokens on-chain in a certain proportion. On-chain tokens represent holders' economic claim to the underlying stocks, and their legal enforceability depends on the issuer's compliance framework, custody arrangements, and disclosure transparency.

This model is closer to the traditional financial system in terms of compliance and asset security, making it the mainstream approach for current US stock tokenization.

· Synthetic Tokens: Synthetic tokens do not hold real stocks but rather track stock prices through smart contracts and oracle systems to provide users with price exposure. These products are closer to financial derivatives, focusing on trading and hedging rather than transferring asset ownership.

Due to the lack of real asset backing and inherent compliance and security risks, early pure synthetic models represented by Mirror Protocol have gradually faded from the mainstream view.

With tightening regulatory requirements and institutional capital inflow, the model based on real asset custody has become the mainstream choice for the tokenization of US stocks by 2025. Platforms such as Ondo Finance and xStocks have made significant progress in compliance frameworks, liquidity access, and user experience.

However, at the implementation level, these models still need to coordinate between the traditional financial system and on-chain systems, bringing some noteworthy engineering differences in their operation.

1. Execution Detail Differences Due to Batch Settlement Mechanism

Platforms commonly use a netting batch settlement method for executing real stock trades in traditional markets (e.g., Nasdaq, NYSE). While this inherits deep liquidity from traditional markets, resulting in very low slippage for large orders (usually <0.2%), it also means:

1) During non-US stock market hours, minting and redemption may experience slight delays;

2) During extreme volatile market conditions, the execution price may have minor deviations from on-chain pricing (due to platform spread or fee buffers);

2. Custodial Centralization and Operational Risks

Stock custody is held by a few regulated custodians, and if there are custody operational errors, bankruptcies, clearing delays, or extreme black swan events, theoretically, it may impact token redemption.

Similar issues are also prevalent in Perpdex targeting US stocks, where, unlike spot trading's 1:1 peg, contract trading encounters the following extreme scenarios during US stock market closure:

1) Unpegging Risk:

On a normal trading day, contract prices are forcefully pegged to the Nasdaq price through funding rates and oracles. Once it enters a non-trading day, external spot prices freeze, and on-chain prices are entirely driven by on-chain funds. If there is a significant crypto market fluctuation or whale dumping during this time, on-chain prices will quickly deviate.

2) Poor Liquidity Leading to Manipulation:

On non-trading days, both open interest (OI) and order book depth are often thin. Large holders can manipulate the price through high-leverage orders, triggering cascading liquidations. This phenomenon is similar to pre-market contracts and resembles the situation seen during the $MMT$MON event, where a violent price spike by large holders triggered cascading liquidations when investors were highly bearish (collective short hedge).

Overview of On-chain Trading Platforms for US Stocks

For most investors, the key question is: amidst the diverse crypto ecosystem, which projects have turned this vision into a tangible reality?

· OndoFinance

​​​​Ondo Finance is a leading Real World Asset (RWA) tokenization platform focused on bringing traditional financial assets onto the blockchain. In September 2025, Ondo Global Markets was launched, offering 100+ tokenized US stocks and ETFs (for non-US investors), supporting 24/7 trading, instant settlement, and DeFi integrations (such as collateralized lending).

The platform has expanded to Ethereum, BNB Chain, and plans to launch on Solana in early 2026, supporting over 1000 assets. Total Value Locked (TVL) has grown rapidly, exceeding hundreds of millions of dollars by the end of 2025, making it one of the largest platforms in the tokenized stocks space.

Ondo has raised over a billion dollars in funding (including early rounds). In 2025, there were no new large public fundraises, but TVL surged from hundreds of millions at the beginning of the year to over $1 billion by the end of the year, with strong institutional support (e.g., partnerships with Alpaca, Chainlink).

On November 25, 2025, Ondo Global Markets was officially integrated into the Binance Wallet, directly listing 100+ tokenized US stocks under the "Markets> Stocks" section in the app. This deep collaboration between Ondo and Binance's ecosystem allows users to trade on-chain (e.g., Apple, Tesla) without the need for an additional brokerage account and supports DeFi use cases (e.g., collateralized lending).

Ondo has become the world's largest tokenized securities platform, with a year-end TVL surpassing $1 billion, directly challenging traditional brokers.

· Robinhood

The traditional brokerage giant Robinhood has leveraged blockchain technology to break financial barriers and bring US stock trading into the DeFi ecosystem. In the EU market, it offers tokenized stocks as derivatives built upon the MiFID II regulations to users, operating as an efficient "off-chain ledger."

In June 2025, the tokenized stocks and ETF products based on Arbitrum were officially launched for European Union users, covering over 200 US stocks, supporting 24/5 trading on weekdays, and commission-free. There are plans to launch their own Layer 2 chain, "Robinhood Chain," in the future and migrate assets to this chain.

Through innovations such as the prediction market, crypto business expansion, and stock tokenization, Robinhood saw its $HOOD stock price surge over 220% throughout the year, making it one of the standout performers in the S&P 500 Index.

· xStocks

xStocks is the core product of Swiss regulatory issuer Backed Finance, issuing tokens backed by real US stocks in a 1:1 ratio (60+ types, including Apple, Tesla, NVIDIA). It mainly trades on platforms such as Kraken, Bybit, Binance, supports leverage, DeFi use (such as collateralization), and emphasizes EU regulatory compliance and high liquidity.

Backed Finance raised millions of dollars in early financing, with no new public rounds in 2025, but product trading volume exceeded $300 million, showing strong partner expansion.

In the first half of 2025, a large-scale launch occurred on Solana/BNB Chain/Tron, leading to a significant increase in trading volume and being seen as the most mature custody model. There are future plans for more ETFs and institutional-level expansion.

· StableStock

StableStock is a next-generation crypto-friendly neobroker supported by YZi Labs, MPCi, and Vertex Ventures, committed to providing global users with borderless access to financial markets through stablecoins.

StableStock deeply integrates a licensed brokerage system with a stablecoin-native crypto financial architecture, allowing users to trade real stocks and other assets directly using stablecoins without relying on the traditional banking system. This significantly reduces the barriers and friction of cross-border finance. Its long-term goal is to build a global trading system centered around stablecoins, serving as the entry point for tokenized stocks and a broader range of real-world assets. This vision is gradually being realized through specific product forms.

In August 2025, the core brokerage product StableBroker was launched for public testing, and in October, a partnership with Native led to the launch of tokenized stocks supporting 24/7 trading on the BNB Chain. The current platform supports over 300 US stock equities and ETFs, with an active user base of thousands, daily trading volume in US stock spot markets approaching a million dollars, and continuously growing asset under management and various metrics.

· Aster

Aster is a next-generation multi-chain perpetual contract DEX (merged from Astherus and APX Finance), supporting stock perps (including US stocks like AAPL, TSLA), leverage up to 1001x, hidden orders, and yield farming. Cross-chain on BNB Chain, Solana, Ethereum, etc., emphasizing high performance and institutional-grade experience.

The seed round was led by YZi Labs, with the $ASTER market cap peaking at over $7 billion after the 2025 TGE.

After the September 2025 TGE, trading volume surged, totaling over $500 billion for the year; launching stock perps, a mobile app, and Aster Chain Beta; with over 2 million users, TVL exceeding $400 million by the end of 2025, becoming the second-largest platform for perps DEX.

Of note: CZ publicly stated purchasing $ASTER tokens in the secondary market, demonstrating Aster's strategic position on the BNBChain.

· Trade.xyz

Trade.xyz is an emerging Pre-IPO tokenization platform, focusing on unicorn company equities (such as SpaceX, OpenAI), issuing tokens through SPV to represent real stock ownership, supporting on-chain trading and redemption. Emphasizing low barriers and liquidity.

With no public record of large-scale funding, it is an early-stage project relying on community and ecosystem growth.

In 2025, the testnet went live for some markets, integrating perps with Hyperliquid HIP-3; with moderate trading volume, plans to expand to more companies and DeFi integrations in 2026.

· Ventuals

Ventuals is built on Hyperliquid, creating Pre-IPO company valuation perpetual contracts using the HIP-3 standard (not real equity but price exposure, such as OpenAI, SpaceX). Supporting leveraged long/short positions, priced based on a valuation oracle.

Incubated by Paradigm, the HYPE collateral pool attracted $38 million in 30 minutes in October 2025 (for market deployment).

In 2025, the testnet went live, quickly becoming a key player in the Hyperliquid ecosystem for Pre-IPO perps; deploying multiple markets in October led to rapid volume growth; plans to expand to more companies and settlement mechanisms, focusing on innovative futures.

· Jarsy

Jarsy is a compliance-focused Pre-IPO platform that tokenizes real private pre-IPO shares (such as SpaceX, Anthropic, Stripe) in a 1:1 ratio, with a minimum investment of $10. It allows purchasing real shares issued tokens after testing demand through presale, supporting on-chain proof of reserves and verification.

Completed a $5 million pre-seed round in June 2025, led by Breyer Capital, with participation from Karman Ventures and several angels (such as Mysten Labs, Anchorage).

Officially launched in June 2025, rapidly adding popular companies; emphasizing transparency and compliance, with growing TVL; future plans include expanding dividend simulations and more DeFi compatibility.

Amid the trend of tokenizing US stocks, top CEXs such as Binance, OKX, Bitget, Bybit play a key role as traffic entries, commonly adopting an aggregation model, directly connecting to asset pools of regulated issuers like Ondo Finance, xStocks.

Binance Wallet, OKX Wallet, Bitget's US stock tokenization service are deeply integrated with Ondo, directly providing US stock trading services for users in the app's market section.

Bybit, on the other hand, offers US stock contract trading to users through TradFi platforms, specifically synthetic derivatives tracking the price movements of real US stocks or indices. Trading hours follow the traditional market, offering 24/5 trading only.

KOL Insights: Consensus, Disagreement, and Vision

· Jiayi (XDO Founder): Looking ahead, stock tokenization is unlikely to follow an explosive growth curve, but it may become a highly resilient infrastructure evolution path in the Web3 world.

https://x.com/mscryptojiayi/status/1940782437879238992?s=20

· Roger (KOL): Top 10 Core Beneficiaries of 2025 US Stock Tokenization (RWA)

https://x.com/roger9949/status/2000177223874101705?s=20

· Ru7 (KOL): Stock tokenization is not about "copying stocks to the chain." It is more like linking the traditional capital markets with an open, composable decentralized financial system.

https://x.com/Ru7Longcrypto/status/2003821123553902998?s=20

· Blue Fox (KOL): The tokenization of US stocks is a deadly blow to crypto projects, leaving no room for even a tiny bit of future copying.

https://x.com/lanhubiji/status/2001849239874531381?s=20

· Lao Bai (Amber.ac Advisor): The essence of on-chain US stocks is the 'digital migration' of assets: Just as the Internet enables information to flow freely and breaks down old intermediaries, blockchain is restructuring the underlying logic of stock assets by eliminating settlement costs, breaking down geographical barriers, and decentralizing power.

https://x.com/Wuhuoqiu/status/2003447315139559911?s=20

Conclusion: From the Financial "Parallel World" to the "Twin System"

Returning to the initial question: Why are major institutions unanimously bullish on tokenization in their annual outlooks?

From a first-principles perspective, tokenization is freeing assets from the traditional island of geography, institution, and transaction time, transforming them into globally programmable, composable digital assets. As the growth dividend of top companies is no longer limited by borders and transaction times, the trust foundation of finance is also shifting from centralized intermediaries to code and consensus.

The tokenization of US stocks is far more than just the on-chain movement of assets; it is a fundamental restructuring of financial civilization.

Just as the Internet broke down the walls of information, blockchain is flattening the investment playing field.

The crypto industry is also heading into the deep waters of the real world.

It is no longer just the opposite of traditional finance but evolving into a deeply integrated twin financial system with the real-world financial system, progressing together hand in hand.

This is not only a leap in transaction efficiency but also a crucial step for global investors to move from passive participation to financial empowerment.

In 2026, the migration of asset liquidity has only just begun.

(This article is for reference only and does not constitute investment advice. The market carries risks, so please participate rationally.)

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