Author: @BlazingKevin_, the Researcher at Movemaker
Under the expectation of 'de-regulation' that Trump may bring, the long-dormant tokenized stock track is reigniting in 2025 with a new face of RWA. Bringing the most liquid assets in the world—US stocks—into the crypto industry, allowing crypto users worldwide to trade anytime and anywhere, is undoubtedly a grand and enticing narrative.
However, this road is not smooth. From the early STO concept to the synthetic asset experiments of DeFi Summer, to the brief attempts by FTX and Binance, the history of tokenized stocks is full of twists and turns. Today, with subtle changes in the regulatory environment, a new round of competition has already begun.
In this competition, three forces are emerging, representing three distinctly different paths: the 'dimensionality reduction strike' of internet brokerage giant Robinhood, the 'open Lego' of DeFi-native xStocks (issued by Backed Finance and distributed by Kraken, etc.), and the mysterious newcomer StableStocks with support from institutions like Matrix Partners, representing a 'hybrid model'.
This article will delve deep into these three horses, detailing their legal core, business models, and core differences, and exploring who is most likely to come out on top in this high-risk game.
One, the four waves of tokenized stocks
To understand today's competitive landscape, it is essential to look back at history. The development of tokenized stocks has roughly gone through four phases:
STO incubation period (2017-2018): The concept of STO (Security Token Offering) emerged with the aim of putting traditional securities compliance on-chain. However, due to a lack of unified standards, high compliance costs, and a lack of liquidity in the secondary market, this attempt quickly fell silent.
Synthetic asset experiment period (2020 DeFi Summer): Projects represented by Synthetix and Mirror Protocol attempted to create 'synthetic assets' linked to US stock prices through over-collateralization of crypto assets. This model bypassed the regulatory challenges of directly holding stocks but ultimately failed to find PMF. Insufficient on-chain trading demand led to a lack of motivation for market makers, liquidity dried up, and most projects were delisted for 'regulatory considerations'.
CEX trial period (2020-2021): Centralized exchanges like FTX and Binance launched centralized custodied tokenized stocks through partnerships with licensed financial institutions. This model once attracted considerable trading volume (FTX's monthly trading volume reached $94 million in October 2021), but due to direct competition with traditional exchanges such as Nasdaq, it soon faced significant regulatory pressure. Binance's services were halted just three months after launch, and FTX's business ended with the collapse of its empire.
RWA renaissance period (present): Under new regulatory expectations, the track is restarting. This time, the core narrative has shifted to RWA, emphasizing the issuance of tokens fully backed 1:1 by real stocks with a compliant legal framework, prioritizing asset security and transparency.
Two, overview of the current market landscape
According to data from RWA.xyz, the current total issuance of stocks in the RWA market is about $374 million, but growth is slow. The market landscape shows signs of fragmentation:
Exodus (EXOD): The largest market cap (about $258 million), but its model is more symbolic. Users can migrate NYSE-listed EXOD stock to the Algorand chain, but this is merely a 'digital twin', containing no on-chain rights and cannot be traded or circulated on-chain.
Dinari: This is a model of compliance exploration. The company is registered in the US and has obtained a valuable broker-dealer license. However, to meet strict regulations, its issued dShares cannot be freely traded on-chain, and all transactions must occur through its official website during US stock trading hours. This leaves its product experience no better than traditional brokers like Futu, resembling more of a traditional broker using cryptocurrency as a deposit channel, thus limiting market scale.
Montis Group: Montis Group is a digital asset issuer based in the UK with a market cap of approximately $55 million, focusing on 'on-chaining' real-world assets such as European stocks and bonds. However, similar to Exodus, Montis has only achieved tokenization of its own stocks, and these tokens cannot be freely traded on-chain. For Web3 investors seeking liquidity and composability, this model has little practical significance at the current stage.
It is against this backdrop that the entry of Robinhood, xStocks, and StableStocks brings three more imaginative paradigms to the market.
Three, the three horses—deep dissection of three models
We will dissect these three major players from three dimensions: legal core, business model, and composability.
1. Robinhood: Derivative contracts + B2C + controlled ecology
Legal core and compliance path: There are not many companies worldwide exploring the combination path of 'crypto + stocks', but Robinhood's approach stands out. It did not choose to directly issue tokens representing stock ownership, but instead entered the market in a more flexible way: achieving mapping of the underlying assets through derivatives. Products launched in Europe are essentially not securities trading, but over-the-counter financial contracts based on the EU MiFID II framework. In other words, what users purchase is not 'stock tokens', but a digital certificate that can track specific stock price fluctuations. This legal design allows Robinhood to avoid complex securities compliance barriers and open overseas markets with minimal resistance.
Technical architecture and 'walled garden':
Underlying chain selection: In terms of technical choices, Robinhood uses Arbitrum as its landing network. Compared to the Ethereum mainnet, it achieves higher performance and lower transaction costs while inheriting the mature security of Ethereum. With just a few dollars in gas costs, it has completed the deployment of hundreds of tokens, clearly showing efficiency advantages.
Permission control: However, this system is not an open DeFi paradise. Strict whitelist rules are embedded within the smart contracts, and all transactions require verification of whether the receiving party has passed Robinhood's compliance certification. In other words, this is a typical 'controlled zone', where users must complete KYC to enter, and the ecology is tightly controlled by Robinhood itself, sacrificing interoperability with the external DeFi world.
Future ambitions: More interesting is Robinhood's next move. The company is planning to launch its own Layer 2 network—Robinhood Chain—based on the Arbitrum tech stack. This move is not merely about reducing costs, but sends a stronger signal: Robinhood wants to take control of underlying technology to provide a tailored environment for future large-scale RWA strategies.
Strategic depth and vision: If this model is simply understood as a 'closed garden', it underestimates Robinhood's ambition. CEO Vlad Tenev has repeatedly mentioned that the company's vision is 'Capital as a Service'. Tokenization is not just a gimmick, but an important tool for Robinhood to advance financial democratization, especially for those long locked in non-liquid assets held by high-net-worth individuals. Imagine if ordinary users could indirectly gain exposure to the equity of unlisted giants like SpaceX or OpenAI through derivative tokens, the power structure of capital markets would be reshuffled.
Of course, the reality is not entirely optimistic. Top private equity firms often have no shortage of funds, making it almost impossible to actively 'invite retail investors in'. This means that tokenization plans must circumvent traditional issuance logic to reach ordinary investors. But this model also hides risks: after Robinhood launched OpenAI-related tokens, the company immediately issued a statement clarifying that it had no relation to them, exposing a problem—the derivative model may have a huge gap in information transparency and investor understanding.
Compared with other platforms, Robinhood's approach is different from traditional on-chain stock attempts (such as Synthetix's synthetic assets or Polymarket's prediction markets). It does not emphasize the complete openness of DeFi but instead aims to capture the market through a combination of 'strong compliance + high user experience'. Its logic is more like an extension of a financial technology platform rather than a complete on-chain fundamentalism.
If regulation allows or even gradually accepts it, Robinhood will be the first to establish a super entrance covering retail investors, compliance, and RWA, and may even become the first stop for retail investors in Europe and the United States to enter tokenized finance.
One-sentence review: Robinhood's attempt is not simply to 'move stocks onto the blockchain', but an experiment to reshape the traditional derivatives distribution model using cryptographic technology. It uses blockchain to enhance product delivery and compliance efficiency, aiming far beyond the crypto circle itself, truly pointing towards a redefinition of the entire global financial system.
2. xStocks: Asset-backed tokens + B2B2C + complete composability
Legal core and compliance path: In the tokenized stock track, xStocks' positioning is quite unique. Unlike some derivative platforms that only provide price mapping, it follows the path of fully mapping physical assets. The entire structure is built by the Swiss compliance team Backed Finance, adhering to Switzerland's DLT legal framework, and hosting real stocks through a special purpose vehicle (SPV) established in Liechtenstein. This SPV is responsible for one thing—holding the underlying assets themselves and being completely isolated legally from the issuing entity and trading platform. In other words, even if the operator encounters issues, investor rights can still be independently protected. What investors receive is not a 'contract paper' but a prioritized secured debt certificate corresponding to real assets.
Technical architecture and transparency:
Underlying chain selection: On the technical level, xStocks places its token issuance on Solana. The reasons are clear: high throughput, low cost, and extremely low confirmation delay make these features naturally suitable for frequent trading and DeFi composability.
Transparency cornerstone: To ensure that investors trust that their tokens indeed have real reserves backing them, xStocks has introduced Chainlink's proof of reserves, allowing anyone to verify reserve situations on-chain at any time, adding a layer of transparency endorsement to its 'asset tokens'.
Open contracts: On the other hand, as a standard SPL token, xStocks tokens can circulate freely on Solana, easily connecting with native DeFi protocols like Jupiter and Kamino, possessing complete composability.
Strategic depth and vision: From a business perspective, xStocks does not directly target a closed loop for C-end users but adopts a B2B2C distribution logic. Token issuance and redemption in the primary market are completed by Backed Finance targeting institutions, while secondary market trading relies on exchanges like Kraken and Bybit. This way, it can attract professional institutions while reaching a large number of retail investors through mature exchanges, ultimately releasing liquidity in an open ecology. Data has already proven the potential of this model: after gaining support from mainstream platforms, its daily trading volume once broke through $6 million. The long-term vision is to develop this model into 'tokenization as a service', providing standardized asset on-chain tools for financial institutions.
xStocks' approach forms a stark contrast to Robinhood. Robinhood's model resembles 'digitalization of financial derivatives', locking users in with a controlled whitelist mechanism; whereas xStocks puts real assets on-chain and maintains complete interoperability with DeFi. This means it naturally aligns more with Web3's 'open Lego' narrative but also needs to bear the regulatory gray areas and risk spillover issues in an open environment.
Whether this model can work depends on two factors:
1. Whether deep liquidity can truly be established. If tokenized assets are only issued in one direction, lacking sufficient trading counterparties and arbitrage mechanisms, then their market significance will be very limited.
2. Whether long-term regulatory tolerance can be won. Currently, the SPV structure has achieved legal isolation, but the future recognition of 'tokenized securities' varies by country. In the event of regulatory conflicts, the ecology may experience significant fluctuations.
Notably, xStocks' model may inspire broader application scenarios. For example, it provides a replicable paradigm for 'asset-backed tokens' beyond stablecoins, especially suitable for the tokenization of bonds, ETFs, and even art funds. Unlike the 'controlled tokens' launched by a single exchange, it emphasizes the free composability with DeFi modules, injecting new liquidity sources into the entire crypto ecosystem.
One-sentence review: xStocks is not reshaping exchanges, but providing a new asset underpinning for DeFi. It attempts to move the true and transparent value of traditional finance onto the chain and create a new market ecology through open composability. If Robinhood's direction is 'business on chain', then xStocks' logic is more like 'assets on chain'.
3. StableStocks: Proxy holding + B2C + internal composability mechanism
Legal core: StableStocks adopts a unique 'proxy holding + beneficiary' model. The platform establishes a dedicated SPV and collaborates with licensed brokers (such as Australia's HABIT TRADE) to open institutional accounts, actually purchasing and custodizing stocks. Ultimately, investors do not hold shares directly but enjoy corresponding rights as beneficiaries. This arrangement allows StableStocks to operate without directly holding a complete brokerage license, still relying on the compliance system of its partners, balancing compliance and flexibility.
Business model: StableStocks is positioned as a typical B2C model, packaging funding, trading, custody, and derivative play all in its own platform. Unlike some B2B2C solutions, StableStocks prefers to serve end-users directly. In its ecosystem, it is closely bound to Binance and the BNB Chain.
Composability: The core difference of StableStocks is that it does not pursue complete open external composability but builds an internally composable closed-loop system. The stock equity tokens held by users can further be deposited into the platform's 'StableVault', generating stStock with yield attributes. This is a logic of 'a financial playground with walls'—the play is limited, but the experience is more controllable.
From a more systematic perspective, the model link of StableStocks can be broken down into five key stages:
Stock acquisition and sources
Real stocks from licensed brokers:
Australia's Habit Trade (holding 70%) is responsible for US stock channels
Traditional banks (such as ANZ, DBS) provide fiat currency settlement and funding channel support.
The source of stocks is real, not synthetic assets.
Settlement and custody mechanisms
Stocks are uniformly custodized by an SPV, isolating risk;
Cooperating with Nasdaq’s clearinghouse to ensure compliance and stability of underlying asset circulation.
Ensure a 1:1 correspondence to reduce counterparty default risk.
Tokenization and on-chain issuance
StableStocks maps custodized stocks to stock tokens;
Token issuance operates on the BNB Chain, gaining support from Binance wallets and trading ecosystems;
Each token is backed by actual assets, belonging to standard asset-backed tokens.
Stablecoins and entry into the crypto world
Connecting with Coinbase's stablecoin channel, users can directly exchange USDC for stock tokens;
This solves the funding conversion barrier between fiat users and crypto users.
User-side usage and expansion
Stock tokens can be held and traded in the Binance wallet;
In addition to investment itself, they can also be embedded into StableStocks' self-built DeFi modules (staking, yield enhancement).
User experience is closer to a combination of 'Robinhood + DeFi-lite'.
StableStocks is taking the 'middle road'—it is neither as closed as Robinhood with just trading nor as completely open as xStocks integrated with the entire DeFi Lego, but rather builds a semi-open system. For traditional financial investors, it provides a new way to enter the on-chain market; for crypto users, it offers an easy entry point to blue-chip stocks like Tesla, Apple, and McDonald's. Its core selling point is:
Compliance: Leveraging the licensed broker system;
Stability: Clearinghouses + SPV custody;
Ease of use: B2C closed loop;
Innovation: Internally composable DeFi-lite.
One-sentence review: StableStocks is a middle ground that attempts to find a balance between the closed ease of use of Robinhood and the open complexity of xStocks. It bets that what users want is a 'DeFi-lite' experience—enjoying the yield enhancement brought by DeFi without having to bear all the risks and complexities of open DeFi.
Triangular comparison: StableStocks vs xStocks vs Robinhood
Four, insurmountable structural obstacles
Despite the varied models, all stock tokenization schemes currently face several common structural obstacles that are difficult to resolve in the short term:
The contradiction between value proposition and actual liquidity: Currently, all platforms face a classic 'chicken or egg' dilemma. On one hand, for users who can conveniently trade US stocks, the value proposition of tokenized stocks is unclear. On-chain trading has not only failed to provide better rates but has led to higher trading slippage due to lack of liquidity, far inferior to mature internet brokers. On the other hand, due to the lack of a strong enough value proposition to attract large-scale users and capital, on-chain liquidity has been unable to deepen, creating a self-reinforcing negative feedback loop: no users means no liquidity, and no liquidity means it cannot attract users. Unless it can provide irreplaceable new utility for existing users, breaking this deadlock will be challenging.
Structural flaws: Current tokenized stocks are essentially just 'digital twins' of real stocks, but this replication has fundamental flaws. First, the promise of 24/7 trading is largely illusory. When the underlying stock market (like Nasdaq) is closed, on-chain market makers cannot hedge their risk exposure and can only avoid risk by drastically widening spreads or pulling out liquidity altogether, which significantly undermines the effectiveness of weekend and after-hours trading. Secondly, these tokens strip away complete shareholder rights. Users gain a claim to the economic value of stocks, not full ownership including voting rights.
'Decentralized' facade hides centralized risks: Although operating on a decentralized blockchain, the trust foundation of these RWA models is highly concentrated in a series of off-chain entities. Whether it's the SPV issuing the tokens, third-party banks responsible for asset custody, brokerage firms executing trades, or the bridge connecting the fiat and crypto worlds, each link is a potential point of centralization failure. If these centralized entities encounter operational failures, legal disputes, or even bankruptcy, the on-chain tokens may instantly lose their value support.
Potential paradox of DeFi composability: For open models like xStocks, its ultimate vision is to become the 'money Lego' of the DeFi world. However, this composability faces a severe paradox. A DeFi lending protocol considering whether to accept TSLAx as collateral must not only assess the price volatility risk of Tesla stock itself but also the platform risk brought about by its tokenized structure—namely the risk of default by the issuer Backed Finance or its custodian. This dual exposure of 'asset risk + platform risk' makes DeFi protocols extremely cautious when integrating these RWA assets. Moreover, the ambiguous legal status of these tokens deters DeFi protocols, fearing regulatory repercussions for 'illegally operating securities businesses'. This explains why no mainstream DeFi protocol has yet taken them as core collateral, and the road to true composability remains long.
Conclusion: Which of the three models will win the future?
The outcome of this competition may not depend on who has a more ingenious legal framework but rather on who can first create irreplaceable value for users.
Robinhood's path to victory lies in scale. If its goal is merely to provide a familiar asset class in a novel form to tens of millions of existing users, it is likely to win in terms of user numbers.
xStocks' path to victory lies in ecology. If the narrative of 'financial Lego' holds, many DeFi protocols can take it as core collateral or underlying assets in the future, constructing on-chain options, lending, and structured products, then it will win the future of Web3.
StableStocks' path to victory lies in experience. If it can prove that 'DeFi-lite' is a real existing market by providing a one-stop, low-threshold 'trading + yield' experience, it may open up a blue ocean between mainstream users and hardcore DeFi users.
Ultimately, the so-called 'on-chain US stocks' are still in the experimental stage, currently more of a financial packaging under regulatory gaps rather than a mature market tool. The nodes that can truly change the game are not about who first runs a proof of concept but about who can deliver a complete trading system combining spot trading, short selling, leverage, and risk management on-chain. Only when the financial playability and functionality of on-chain stocks truly match or even surpass those of traditional Wall Street brokers can this transformation be considered to have entered a substantive phase. As for now, those pioneers have just begun to put their wheels on the track; the real race is far from starting.
This article/blog is for reference only, representing the author's personal views and does not represent the position of Movemaker. This article does not intend to provide: (i) investment advice or recommendations; (ii) offers or solicitations to purchase, sell, or hold digital assets; or (iii) financial, accounting, legal, or tax advice. Holding digital assets, including stablecoins and NFTs, carries high risks, significant price volatility, and may even become worthless. You should carefully consider whether trading or holding digital assets is suitable for you based on your own financial situation. For specific issues, please consult your legal, tax, or investment advisor. The information provided in this article (including market data and statistics, if any) is for general reference. Reasonable care has been taken in compiling this data and charts, but no responsibility is accepted for any factual errors or omissions expressed therein.
