Decentralized Securities: The Blockchain-Powered Evolution of Traditional Shares
In the rapidly evolving world of finance, tokenized stocks are making waves as digital representations of equity shares in traditional markets. These innovative assets are revolutionizing the way we interact with and own stocks, offering benefits such as 24/7 trading, global access, DeFi utility, and fractional ownership.
Native Tokenized Stocks: Blockchain-Native Equity
Native tokenized stocks, also known as native tokens, are shares issued directly on the blockchain by the company itself. These tokens represent original equity ownership recorded blockchain-native, with the blockchain acting as the primary source of truth for shareholder records. This means the tokenized share is the actual legal equity, with ownership and related rights (like voting) encoded and managed on-chain.
Wrapped Tokenized Stocks: Bridging Blockchain with Traditional Shares
Wrapped tokens, on the other hand, are blockchain tokens that are backed 1:1 by real shares held off-chain by a licensed custodian or broker. The token mirrors the underlying stock's price, but actual ownership records are maintained off-chain by the custodian. Investors can redeem wrapped tokens for the underlying shares or equivalent value, mirroring the price of the stock. Wrapped tokens prioritize compatibility with traditional systems by linking on-chain tokens to off-chain assets.
Synthetic Tokenized Stocks: Derivative Exposure without Real Stock Backing
Synthetic tokens are on-chain derivatives that do not hold or represent actual shares. Instead, they use oracle data to simulate or track the price of a stock, giving 24/7 exposure without owning or backing by the real asset. These synthetic tokens function as financial contracts whose value is derived from external stock prices. They enable trading around the clock but carry risks since no real equity is held.
The Future of Tokenized Stocks: Internet Capital Market 2.0
The emergence of tokenized stocks is driving the vision of Internet Capital Market 2.0 (ICM 2.0), where every financial asset is represented on-chain, accessible 24/7, and interoperable with smart contracts. Projects like Ondo Finance, Alchemy Pay, and Kamino are integrating tokenized equities into lending, yield, and portfolio strategies, further solidifying the role of tokenized stocks in the future of finance.
As of mid-2025, the tokenized RWA market surpassed $23 billion, with equities being the fastest-growing segment within that. Institutions are exploring hybrid models that bring regulated assets on-chain due to the potential benefits of tokenized stocks for TradFi.
Risks and Considerations
Tokenized stocks come with specific risks, including potential regulatory issues, cybersecurity threats, and market volatility. Redemption fees or lock-up periods may apply when dealing with tokenized stocks. It's essential for investors to understand these risks and the unique characteristics of tokenized stocks, such as thinner liquidity compared to traditional exchanges like NYSE or NASDAQ.
For everyday retail investors, tokenized stocks provide easier access to global markets. Platforms like BackedFi, Securitize, or Dinari specialize in wrapped tokenized stocks, while protocols such as Mirror or Synthetix use the synthetic token model.
In conclusion, the world of tokenized stocks offers a fascinating blend of traditional finance and blockchain technology. Native tokenized stocks reflect true blockchain-native equity, wrapped tokens bridge blockchain with traditional shares held off-chain, and synthetic tokens provide derivative exposure without any real stock backing. As the industry continues to evolve, the potential benefits and opportunities for investors and businesses alike are vast and exciting.
- Native tokenized stocks, like those on Ethereum or Solana, are shares issued directly on the blockchain by the company, acting as the primary source of truth for shareholder records and offering on-chain ownership and related rights.
- Wrapped tokenized stocks, often found in platforms like BackedFi, Securitize, or Dinari, are blockchain tokens that are 1:1 backed by real shares held off-chain by a custodian or broker, providing compatibility with traditional systems.
- Synthetic tokenized stocks, such as those provided by protocols like Mirror or Synthetix, are on-chain derivatives that mimic stock prices without holding or representing actual shares, enabling around-the-clock trading but carrying risks due to their lack of real equity backing.
- The emergence of tokenized stocks is breeding the future vision of Internet Capital Market 2.0 (ICM 2.0), where every financial asset is represented on-chain, accessible 24/7, and interoperable with smart contracts, revolutionizing the finance industry.
