Author: JE Labs
In July 2025, Robinhood announced that users could trade U.S. stocks on the Arbitrum chain 5×24 hours; Bybit and Kraken announced the launch of xStocks provided by the Swiss compliant asset tokenization platform Backed Finance; Coinbase has also applied to the SEC for the issuance of tokenized securities. The market has been buzzing, with on-chain trading of U.S. stocks becoming a focal point for users.
Is this the first time U.S. stocks are on-chain?
As early as the summer of DeFi in 2020, the Mirror Protocol launched synthetic assets mAssets on the Terra chain, allowing users to 'hold' U.S. stocks like Apple and Tesla without KYC or broker accounts. At that time, Mirror was full of ambition but ultimately faded away with the collapse of Luna and the SEC's heavy-handed regulation.
Five years later, new generation U.S. stock tokenization products like xStocks make a comeback. How do they differ in asset structure, compliance, and technology stack compared to the Mirror of those years? Can U.S. stock tokenization go further this time?
1. Comparison of Asset Structures: Mapping from the Chain to Real Anchors
The mAsset of the Mirror Protocol is essentially a synthetic asset on-chain. It does not represent any equity or asset ownership in the real world; it merely synchronizes real U.S. stock prices through oracles to simulate a synthetic object that is 'price-linked but asset-detached' via smart contracts. The issuance of mAssets relies on over-collateralized algorithmic stablecoin UST; once the underlying stability mechanism experiences systemic risks, such as the collapse of the Terra ecosystem in May 2022 (UST de-pegging), the entire asset system immediately falls into a chain reaction of value loss to zero. The core issue with this structure is that it anchors 'price' rather than 'equity' or 'assets,' making it essentially closer to derivatives rather than ownership certificates.
In contrast, xStocks adopts a completely different asset anchoring structure. Initiated by the Swiss compliance agency Backed Assets, the underlying asset structure is clear and verifiable off-chain: real stocks are first purchased through brokers like Interactive Brokers, and then held by regulated custodians like Clearstream, InCore Bank, and Maerki Baumann. The generation of tokens follows a 'buy first, chain later' approach, ensuring that each xStock token corresponds to a real stock position, guaranteeing a 1:1 correspondence with real holdings. In simple terms, every on-chain purchase by users is anchored by a real stock transaction.
xStocks tokens are issued according to the SPL standard on the Solana public chain, supporting 5×24 hours of on-chain trading and instant settlement, breaking the constraints of traditional securities markets limited to business days and trading hours. More importantly, compared to the vulnerabilities exposed by Mirror's DeFi synthetic asset system under extreme market conditions, xStocks' asset structure introduces real assets, compliant custody, and on-chain audit mechanisms, avoiding the fragile bubble of DeFi synthetic assets.
2. Comparison of Compliance Logic: From Grey Areas to Compliance Focus
The birth of the Mirror Protocol coincided with the explosive window of DeFi in 2020, during which the regulatory vacuum of on-chain ecosystems coexisted with experimental frenzy. At that time, KYC/AML was not common; instead, anonymous, uncensored, and borderless trading methods were the default. Mirror was born at this time, allowing users to mint mAssets by collateralizing UST or LUNA without identity verification, enabling global users to trade U.S. stock mapping assets like TSLA and AAPL freely 24/7.
However, this model based on synthetic assets and algorithmic stablecoin support lacks regulation and real assets, laying hidden dangers for the future. In 2022, with the collapse of LUNA/UST triggering global shocks, the SEC initiated charges against Mirror and Terraform Labs, clearly defining mAssets as 'unregistered securities.' Since then, on-chain synthetic assets have faced a regulatory winter, and the Mirror model has become a typical case of experimental failure, marking the end of the first generation of paths for Web3 to map to real-world finance.
Currently, the driving forces behind xStocks are Kraken, Robinhood, Backed Finance, and other TradFi+Web3 hybrids with compliance resources and traditional financial backgrounds. Kraken complies with the EU MiFID II directive, and Backed Assets and Dinari have obtained securities token issuance licenses; trading requires KYC/AML verification, and off-chain settlement processes are traceable. In 2025, the new SEC chairman Paul Atkins referred to tokenization as a 'financial digital revolution,' with policy direction shifting from repression to guidance.
It is important to note that xStocks is not an equity token, but rather a tracking asset with a bond structure, essentially closer to a transferable stablecoin + income certificate. Although this structure can avoid the high barriers of regulation related to securities attributes, it also leads to the lack of voting rights and corporate governance rights, and involves more complex dividend and distribution structures that must be completed through intermediary entities (such as Kraken's Bermuda subsidiary PDSL). Furthermore, while the bond model brings compliance advantages in taxation and registration (such as no stamp duty, can be anonymous), it distances xStocks from the narrative of 'on-chain ownership of U.S. stocks,' leading some users to comment, 'on-chain stock tokens feel more like a castrated version of stocks created to avoid taxes.'
3. Comparison of Technology Stack: Closed Ecosystem vs. Protocol Integration
Mirror Protocol was built on the Terra chain, and its ecosystem mainly relied on the internal cycle of LUNA and UST. Although at that time Terraswap and Anchor Protocol had relatively mature functions, they were limited by a single ecosystem, making it difficult to achieve cross-chain collaboration.
xStocks has chosen to deploy on multi-chain high-performance public chains (like Arbitrum, Solana, Base), possessing cross-chain asset circulation capabilities. xStocks tokens can be used for lending and LP mining on Solana DeFi protocols, gradually moving towards on-chain composability.
However, the trading experience of xStocks still faces issues of insufficient liquidity. Currently, its on-chain liquidity is highly concentrated in a few assets, such as TSLAx and SPYx, with many asset pools having fewer than 20 trades, significant slippage, and a lack of liquidity support mechanisms. Furthermore, xStocks still lacks a deep integration mechanism similar to perp DEX on-chain, resulting in a noticeable gap in overall trading experience compared to contracts and U.S. stock CFD products on CEX, making it difficult to meet the demand for large-scale traffic migration or high-frequency trading in the short term.
According to on-chain data from defioasis, on the first day of product launch on June 30, 2025, the on-chain trading volume was $1.338 million, with 1,225 independent trading users and 2,510 trades.
On July 1, despite a significant increase in volume, trading volume rose to $6.64 million, with 6,565 new independent trading users and trades jumping to 17,879, but trading still concentrated on a few assets.
Trading is primarily distributed among top assets like TSLAx ($1.71 million), SPYx ($1.53 million), and CRCLx ($940,000), with the remaining majority of assets having very limited trading, and some asset pools even showing zero liquidity, making effective matching difficult.
4. The Current Landscape of U.S. Stock Tokenization Ecosystem
StableStocks: StableStocks is a CeDeFi company focused on the on-chain stock ecosystem, committed to creating a complete closed loop for on-chain stock ecosystems. Its tokenization path relies on a self-built compliant broker system and asset mapping technology, providing users with the ability to directly invest in quality stocks in reality using stablecoins. Its core goal is to achieve the holding, lending, trading, and derivative construction of traditional stock assets on-chain, enhancing the depth and efficiency of on-chain assets by enabling cross-platform liquidity for similar on-chain stocks. Its product structure supports users to enter the U.S. stock market with stablecoins, with future plans to cover various targets including blue-chip stocks, ETFs, and thematic assets.
xStocks: xStocks is currently the largest project by trading volume for U.S. stocks on-chain, carrying nearly 90% of on-chain liquidity. Its compliance framework relies on the Swiss DLT law and the dual SPV (special purpose vehicle) structure of Liechtenstein and Jersey, ensuring legal compliance on the issuance side. xStocks tokens are issued on the Solana public chain based on the SPL standard and incorporate Chainlink price feeds, achieving high-frequency synchronization of prices with off-chain markets.
Robinhood: As a representative of traditional brokers entering Web3, Robinhood emphasizes a 'compliance-first' and 'ecosystem closed-loop' model. Its European operations are regulated by the Bank of Lithuania and have obtained MiFID II and MiCAR licenses for crypto assets, qualifying it to issue securities tokens across the EU. Robinhood is currently deploying a stock tokenization prototype on the Arbitrum Layer 2 network and plans to launch its self-developed exclusive L2 in the future to achieve a technology closed-loop under regulatory compliance.
Coinbase: As a leading infrastructure provider in the U.S. market, Coinbase's tokenization path is directly influenced by the pace of SEC policy advancement. Coinbase is currently waiting for regulatory exemptions to activate its licensed subsidiaries to undertake clearing, custody, compliance reporting, and other business segments, aiming to achieve native compliant issuance of U.S. stock assets on-chain. Coinbase's tokenization module is deployed on its self-developed Base Layer 2 network, with the first batch expected to launch 50–100 U.S. stocks and ETFs, covering standard blue-chip stocks and some thematic assets, and will support dividend distribution and on-chain settlement.
In the context of stablecoin legislation gradually being implemented, the market's focus on compliance and tokenization is extremely high. However, stock tokenization does not mean replacing traditional stock markets; the greatest value of stock tokenization lies in connecting, opening the door of the crypto world for traditional investors while also providing tools for crypto users to anchor real assets. Just as the launch of Bitcoin and Ethereum ETFs made it possible for mainstream capital to enter the crypto market, stock tokenization is also expected to become an important channel for the next round of capital inflows.
