Author: @BlazingKevin_, the Researcher at Movemaker
With the potential 'deregulation' expectations brought by Trump, the long-dormant tokenized stock track is reigniting in 2025 under the new guise of RWA. Bringing the most liquid assets in the world—US stocks—into the crypto industry, allowing crypto users around the globe to trade anytime and anywhere, is undoubtedly a grand and enticing narrative.
However, this path is not without challenges. From the early STO concept to the synthetic asset experimentation of DeFi Summer, and the brief attempts by FTX and Binance, the history of tokenized stocks has been fraught with twists and turns. Now, with subtle changes in the regulatory environment, a new round of competition has begun.
In this competition, three forces are rising, representing three distinctly different paths: Robinhood's 'dimensional reduction attack,' DeFi-native xStocks (issued by Backed Finance and distributed by Kraken, etc.), and the mysterious newcomer StableStocks, supported by institutions like Matrix Partners' 'hybrid model.'
This article will delve into these three players, detailing their legal cores, business models, and core differences, and exploring who is most likely to emerge victorious in this high-risk game.
I. Four Waves of Tokenized Stocks
To understand today's competitive landscape, we must review history. The development of tokenized stocks has roughly gone through four stages:
STO Emergence Period (2017-2018): The concept of STO (Security Token Offering) arose, aiming to bring traditional securities compliance onto the blockchain. However, due to a lack of unified standards, high compliance costs, and a lack of secondary market liquidity, this attempt soon came to a halt.
Synthetic Asset Experimentation Period (2020 DeFi Summer): Projects represented by Synthetix and Mirror Protocol attempted to mint 'synthetic assets' pegged to US stock prices through over-collateralized crypto assets. This model bypassed the regulatory issues 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 eventually delisted related assets under the guise of 'regulatory considerations.'
CEX Experimentation Period (2020-2021): Centralized exchanges like FTX and Binance launched centralized custody 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 faced enormous regulatory pressure due to direct competition with traditional exchanges like Nasdaq. Binance's service was halted just three months after launch, and FTX's business ended with the collapse of its empire.
RWA Renaissance Period (Current): Under new regulatory expectations, the track is restarting. This time, the core narrative has shifted to RWA, emphasizing the issuance of tokens backed 1:1 by real stocks through compliant legal frameworks, prioritizing asset safety and transparency.
II. Overview of the Current Market Landscape
According to data from RWA.xyz, the current total issuance of the stock RWA market is approximately $374 million but is growing slowly. The market landscape exhibits characteristics of fragmentation:
Exodus (EXOD): The largest by market cap (approximately $258 million), but its model is more symbolic. Users can migrate NYSE-listed EXOD stocks onto the Algorand chain, but this is merely a 'digital twin,' without any on-chain rights and cannot be traded on-chain.
Dinari: This is a model of compliance exploration. The company is registered in the USA 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 be conducted through its official website during US stock trading hours. This makes its product experience no better than traditional brokerages like Futu and is more akin to a traditional brokerage using cryptocurrency as a funding channel, hence its market scale has always been limited.
Montis Group: Montis Group is a UK-based digital asset issuer with a market cap of about $55 million, focusing on 'on-chaining' real assets such as European stocks and bonds. However, similar to Exodus, Montis has only tokenized its own stocks so far, and these tokens cannot be freely traded on-chain. For Web3 investors seeking liquidity and composability, this model currently holds little practical significance.
It is against this backdrop that the entry of Robinhood, xStocks, and StableStocks brings three more imaginative paradigms to the market.
III. Three Horses—Deep Deconstruction of Three Models
We will break down these three major players from three dimensions: legal core, business models, and composability.
1. Robinhood: Derivative Contracts + B2C + Controlled Ecology
Legal Core and Compliance Path: There are quite a few companies exploring the combination path of 'crypto + stocks' globally, but Robinhood's approach stands out. It does not choose to directly issue tokens representing stock ownership but instead enters the market more flexibly: achieving mapping of underlying assets through the derivatives pathway. The products launched in Europe are essentially not securities trading but over-the-counter financial contracts issued under the EU MiFID II framework. In other words, what users purchase is not 'stock tokens' but a digital certificate that tracks specific price fluctuations of stocks. 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 technology choice, Robinhood utilizes 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. Hundreds of token deployments have been completed with just a few dollars in Gas costs, clearly demonstrating its efficiency advantage.
Permission Control: However, this system is not an open DeFi paradise. Strict whitelist rules are written into the smart contracts, and all transactions need to verify whether the recipient has passed Robinhood's compliance certification. In other words, this is a typical 'controlled zone' where users must complete KYC to enter, and the ecosystem is firmly controlled by Robinhood, sacrificing interoperability with the external DeFi world.
Future Ambition: What is more intriguing is Robinhood's next move. The company is brewing the launch of its own Layer 2 network—Robinhood Chain—based on the Arbitrum technology stack. This move is not just about reducing costs but sends a stronger signal: Robinhood wants to take control of the underlying technology to provide a tailored environment for its future large-scale RWA strategy.
Strategic Depth and Vision: If this model is simply understood as a 'closed garden,' it indeed underestimates Robinhood's ambitions. 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 illiquid assets long locked in high-net-worth groups. 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, reality is not entirely optimistic. Top private equity firms often have ample funds, making it almost impossible to actively 'invite retail investors in.' This means that tokenization schemes must bypass traditional issuance logic to reach ordinary investors. However, this model also harbors risks: after launching the OpenAI-related tokens, the company immediately issued a statement clarifying its non-involvement, exposing a problem—there may be a huge gap in information transparency and investor understanding in the derivatives model.
In comparison with other platforms, Robinhood's approach differs from traditional on-chain securities attempts (such as Synthetix's synthetic assets or Polymarket's prediction markets). It does not emphasize the complete openness of DeFi but aims to capture the market through a combination of 'strong compliance + high user experience.' Its logic resembles an extension of a fintech platform rather than a complete on-chain fundamentalism.
If regulation is tolerated or even gradually accepted, Robinhood will be the first to establish a super entrance covering retail investors, compliance, and RWA, potentially becoming the first stop for retail investors in Europe and America to enter tokenized finance.
One-sentence comment: Robinhood's attempt is not merely 'moving stocks onto the blockchain,' but an experiment in reshaping the traditional derivatives distribution model using crypto technology. It uses blockchain to enhance product delivery and compliance efficiency, aiming far beyond the crypto circle itself, truly pointing to 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 arena, xStocks has a unique positioning. 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 uses a special purpose vehicle (SPV) established in Liechtenstein to hold real stocks. This SPV is only responsible for one thing—holding the underlying assets themselves and is legally completely isolated from the issuer and trading platform. In other words, even if the operator encounters issues, investors' rights can still be independently protected. Investors do not receive a 'contract paper' but a priority secured debt certificate corresponding to the real asset.
Technical Architecture and Transparency:
Underlying Chain Selection: On a technical level, xStocks issues tokens on Solana. The reasons are clear: high throughput, low cost, and extremely low confirmation delays make these features naturally suited for frequent trading and DeFi combinations.
Foundation of Transparency: To gain investor trust that its tokens indeed have real reserves backing, xStocks introduces Chainlink's proof of reserves, allowing anyone to verify reserve conditions 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 flow freely on Solana, easily integrating with native DeFi protocols like Jupiter and Kamino, boasting complete composability.
Strategic Depth and Vision: From a business perspective, xStocks is not a closed loop directly targeting the C-end but adopts a B2B2C distribution logic. The primary market's token redemption is completed by Backed Finance for institutions, while secondary market trading relies on exchanges like Kraken and Bybit. This way, it can attract professional institutions while also reaching a large number of retail investors through mature exchanges, ultimately releasing liquidity in an open ecosystem. 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 longer-term vision is to develop this model into 'tokenization as a service,' providing standardized asset on-chain tools for financial institutions.
The approach of xStocks contrasts sharply with that of Robinhood. Robinhood's model resembles 'digitalization of financial derivatives,' locking users in through a controlled whitelist mechanism; while xStocks involves real assets on-chain and maintains complete interoperability with DeFi. This means it naturally aligns more with the Web3 narrative of 'open Lego,' but also needs to bear the regulatory gray areas and risk spillover issues that come with an open environment.
Whether this model can succeed depends on two points: 1. **Can deep liquidity be genuinely established?** If tokenized assets are only issued in one direction, lacking sufficient counterparties and arbitrage mechanisms, their market significance will be very limited. 2. **Can long-term regulatory tolerance be achieved?** The current SPV framework has legally achieved isolation, but future recognition of 'tokenized securities' varies by country. If regulatory conflicts arise, the ecology may experience significant fluctuations.
Notably, the xStocks model may inspire broader application scenarios. For example, it provides a replicable paradigm for 'asset-backed tokens' beyond stablecoins, particularly suitable for tokenization of bonds, ETFs, and even art funds. Unlike 'controlled tokens' launched by a single exchange, it emphasizes free composability with DeFi modules, injecting new sources of liquidity into the entire crypto ecosystem.
One-sentence comment: xStocks is not reshaping exchanges but providing new underlying assets for DeFi. It attempts to transparently transfer the real value of traditional finance onto the chain and shape a new market ecosystem through open composition. If Robinhood's direction is 'business on-chain,' then xStocks' logic resembles 'assets on-chain.'
3. StableStocks: Proxy Holding + B2C + Internal Composability Mechanism
Legal Core: StableStocks adopts a unique 'proxy holding + beneficiary' model. The platform sets up a dedicated SPV and partners with licensed brokerages (like Australia's HABIT TRADE) to open institutional accounts, actually purchasing and holding stocks. Ultimately, investors do not hold stocks directly but enjoy corresponding rights as beneficiaries. This arrangement allows StableStocks to operate without directly holding a full brokerage license while relying on the compliance system of its partners, balancing compliance and flexibility.
Business Model: StableStocks is positioned as a typical B2C model, packaging deposit, trading, custody, and derivative play all within its own platform. Unlike some B2B2C solutions, StableStocks prefers to directly serve end users. In terms of ecosystem, it is closely bound with Binance and the BNB Chain.
Composability: The core differentiator of StableStocks is that it does not pursue complete external composability but instead builds an internally composable closed-loop system. The stock equity tokens held by users can be further deposited into the platform's 'StableVault,' generating yield-bearing stStocks. This is a 'financial playground with walls' logic—gameplay is limited, but the experience is more controllable.
From a more systematic perspective, the model chain of StableStocks can be broken down into five key links:
Stock Acquisition and Sources
Real stocks from licensed brokerages:
Australia's Habit Trade (holding 70%) is responsible for US stock channels.
Traditional banks (e.g., ANZ, DBS) provide fiat settlement and funding channel support.
The source of the stocks is real, not synthetic assets.
Settlement and Custody Mechanism
Stocks are uniformly held by SPVs, isolating risk;
Cooperating with Nasdaq's clearinghouse to ensure compliance and stability in the circulation of underlying assets.
Ensuring a 1:1 correspondence to reduce counterparty default risk.
Tokenization and On-chain Issuance
StableStocks maps custodial stocks into stock tokens;
Token issuance operates on the BNB Chain, supported by Binance's wallet and trading ecosystem;
Each token is backed by actual assets, belonging to a standard asset-backed token.
Stablecoins and Access to Crypto
Integrating with Coinbase's stablecoin channel, allowing users to exchange USDC directly for stock tokens;
This solves the funding conversion barrier between fiat users and crypto users.
User Experience and Expansion
Stock tokens can be held and traded in the Binance wallet;
Besides investment itself, they can also be embedded in the DeFi modules built by StableStocks (staking, yield enhancement).
The user experience is closer to a combination of 'Robinhood + DeFi-lite.'
StableStocks takes the 'middle road'—not as closed as Robinhood, which only allows trading, and not as open as xStocks, which completely integrates with the entire DeFi Lego, but builds a semi-open system. For traditional financial investors, it offers new ways to enter the on-chain market; for crypto users, it provides convenient access to blue-chip stocks like Tesla, Apple, and McDonald's. Its core selling point is:
Compliance: Borrowing from the licensed brokerage system;
Stability: Clearinghouse + SPV Custody;
Ease of Use: B2C Closed Loop;
Innovation: Internally Composable DeFi-lite.
One-sentence comment: StableStocks is a middle path, attempting to find a balance between Robinhood's closed user-friendliness and xStocks' open complexity. It bets that users want a 'DeFi-lite' experience—able to enjoy the yield enhancement brought by DeFi without bearing the full risks and complexities of open DeFi.
Triangular Comparison: StableStocks vs xStocks vs Robinhood
IV. Overcoming Structural Barriers
Despite different models, all current stock tokenization schemes face several common structural barriers that are difficult to resolve in the short term:
The Contradiction between Value Proposition and Actual Liquidity: Currently, all platforms face a classic 'which came first, the chicken or the egg' dilemma. On one hand, for users who can already trade US stocks conveniently, the value proposition of tokenized stocks is unclear. On-chain trading not only fails to offer better rates, but due to a lack of liquidity, it leads to higher slippage, resulting in a far inferior experience compared to mature internet brokerages. On the other hand, it is precisely because there is insufficient strong value proposition to attract large-scale users and capital that on-chain liquidity has yet to deepen, forming a self-reinforcing negative feedback loop: Without users, there is no liquidity, and without liquidity, it is even less attractive to users. Unless it can provide irreplaceable new utility for existing users, it will be challenging to break this deadlock.
Structural Defects: 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 directly withdrawing liquidity, which significantly undermines the effectiveness of weekend and after-hours trading. Second, these tokens strip away complete shareholder rights. Users obtain a claim to the economic value of stocks rather than full ownership, including voting rights.
Centralized Risks Hidden under the 'Decentralized' Cloak: Although operating on a decentralized blockchain, the trust base of these RWA models is highly centralized around a series of off-chain entities. Whether it is the SPV issuing tokens, third-party banks responsible for asset custody, partner brokerages executing trades, or the bridges connecting fiat and crypto worlds, each link is a potential point of centralization failure. If any of these centralized entities encounter operational failures, legal disputes, or even bankruptcy, the on-chain tokens may instantaneously 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 evaluate the platform risk posed by its tokenization structure—namely, the risk of default by the issuer Backed Finance or its custodian. This dual risk exposure of 'asset risk + platform risk' makes DeFi protocols extremely cautious when integrating these RWA assets. Moreover, the vague legal status of these tokens also deters DeFi protocols, fearing repercussions for 'illegally operating securities businesses.' This explains why no mainstream DeFi protocols have yet used them as core collateral, and the path to true composability remains long.
Conclusion: Which of the three models can win the future?
The outcome of this competition may not depend on who has the most clever legal framework, but rather on who can first create irreplaceable value for users.
Robinhood's path to victory lies in scaling. If its goal is merely to provide a familiar asset class to tens of millions of existing users in a novel form, it is likely to win in terms of user numbers.
xStocks' path to victory lies in ecosystem development. If the narrative of 'financial Lego' holds true, and a large number of DeFi protocols use it as core collateral or underlying assets to build on-chain options, lending, and structured products, then it will win the future of Web3.
StableStocks' path to victory lies in user experience. If it can prove that 'DeFi-lite' is a genuinely existing market by providing a one-stop, low-threshold 'trading + yield' experience, it may carve out a blue ocean between mainstream and hardcore DeFi users.
At its core, the so-called 'on-chain US stocks' are still in the experimentation stage, more like a financial packaging under regulatory gaps than a mature market tool. The real game-changer is not who first gets a proof of concept through the finish line, but who can deliver a complete trading system on-chain that integrates spot trading, short selling, leverage, and risk management. Only when the financial playability and functionality of on-chain stocks truly match or even surpass those of traditional Wall Street brokerages can this transformation be considered substantive. As of now, those pioneers have just begun to get their wheels on the track, and the real race has yet to begin.
Disclaimer:
This article/blog is for reference only, representing the author's personal views and not those of ChianCatcher. This article does not intend to provide: (i) investment advice or recommendations; (ii) offers or solicitations to buy, 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 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 preparing this data and charts, but no responsibility is accepted for any factual errors or omissions expressed herein.