This article outlines how stock tokenization has evolved and what’s next—especially the so-called second growth curve in derivatives and liquidity.
Stock tokenization is emerging as one of 2025’s strongest narratives at the intersection of TradFi and Web3.
According to rwa.xyz, tokenized equity has grown from almost zero to hundreds of millions in market value this year, driven by a shift from early synthetic models to custody of actual shares and, increasingly, to higher-order products such as derivatives.
This article explains the evolution of the model, highlights key players, and explores what may come next.
Source: rwa.xyz
1) The Journey of Tokenized U.S. Equities
What is stock tokenization?
In short, it represents traditional stocks as digital tokens on the blockchain. Each token corresponds to a share of the underlying asset. These tokens can trade 24/7 on-chain, overcoming the time-zone and trading venue constraints of traditional markets and opening access to global investors.
Stock tokenization isn’t new. In the last cycle, projects like Synthetix and Mirror built on-chain synthetic asset systems. Users could mint and trade stock tokens (e.g., TSLA, AAPL) using over-collateralization (e.g., SNX, UST).
The model was later extended to fiat, indices, gold, oil, and other assets, settling via oracle pricing and on-chain matching. Since there was no real counterparty (it provided only price exposure), in theory the system could offer deep liquidity and low-slippage trading.
Limitation: Synthetic models did not convey real ownership of the underlying stock—they were merely price exposures. If an oracle failed or collateral lost its peg (as happened with UST), these systems could face liquidations, price deviations, and confidence crises.
Source: Mirror
What’s Different Now？
Today’s momentum is driven by models that hold actual shares off-chain and issue 1:1 on-chain tokens. Two main paths have emerged:
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Third-party compliant issuance with multi-platform access (e.g., Backed Finance/xStocks):
- xStocks acquires and custodies shares through partners such as Alpaca Securities LLC.
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Broker-led closed loop (Robinhood-style):
- Licensed brokers acquire shares and issue tokens themselves, covering the entire flow from purchase to on-chain issuance.
The key upgrade is verifiable, real-world backing. This improves security and compliance, making the model more acceptable to traditional institutions.
2) Project Landscape: From Issuance to Trading
A complete tokenized stock ecosystem typically includes:
- Infrastructure: base chains, oracles, and settlement rails
- Issuance: regulated or compliant issuers
- Trading: CEX/DEX, DeFi (lending and other derivative venues)
Infrastructure is maturing, while the most active competition—and what ultimately shapes user experience and liquidity—occurs in issuance and trading. Below are some representative projects.
Ondo Finance — Extending from RWA bonds to equities
Ondo first gained recognition by tokenizing treasuries and bond exposures (e.g., USDY, OUSG), and it remains one of the largest RWA platforms.
Source: rwa.xyz
More recently, Ondo expanded into equities, partnering with regulated custodians and clearers such as Anchorage Digital to hold actual U.S. stocks and issue corresponding on-chain tokens. This approach provides compliance assurance to institutions and enables cross-asset liquidity pools where tokenized stocks can interact with stablecoins and RWA debt.
Ondo and Pantera Capital also announced a proposed $250M fund to support RWA projects. Ondo’s CSO, Ian De Bode, stated that the proceeds could be used to acquire equities and tokens from emerging teams.
Injective — The Blockchain Built for Real-World Financial Assets
Injective positions itself as a high-performance financial blockchain, featuring native modules for order-book matching and derivatives. Its ecosystem encompasses over 200 projects, including DEXs (Helix, DojoSwap), lending platforms (Neptune), RWA players (Ondo, Mountain Protocol), and NFT marketplaces (Talis, Dagora).
Two advantages stand out for RWAs:
- Breadth of assets: Helix and other apps already list tokenized U.S. tech stocks, gold, FX, and more.
- TradFi connectivity: Partnerships with Coinbase, Circle, Fireblocks, WisdomTree, Galaxy, and others help integrate off-chain custody and clearing with on-chain issuance and trading.
The result is a low-latency, low-cost execution environment that supports collateralization, composability, and the eventual development of richer equity-linked products.
Source: Injective
Backed Finance — Compliance-First, Multi-Market Reach
Backed Finance operates under a Swiss legal framework aligned with Europe’s MiCA regulations. It issues fully collateralized tokenized securities and partners with firms like Alpaca Securities LLC for stock acquisition and custody, preserving a 1:1 mapping between off-chain assets and on-chain tokens.
Backed covers U.S. equities, ETFs, European securities, and selected international indices. This provides investors with multi-market, multi-currency exposure on a single on-chain platform—for instance, combining U.S. tech, European blue chips, and global commodity ETFs—without the typical venue and time constraints.
Block Street — Unlocking Liquidity for Tokenized Stocks
Block Street focuses on lending against tokenized equities. Holders can use assets like TSLA.M or CRCL.M as collateral to borrow stablecoins or other tokens—essentially unlocking liquidity without selling the asset.
Its test release recently went live, enabling tokenized stocks to serve as usable collateral and addressing a key gap in DeFi lending. If lending, perpetuals, and options mature on this platform, they could spark a “second curve” of growth for the entire category.
Source: Block Street
The biggest step forward in this wave is actual share custody combined with low-friction access. With just a wallet and stablecoins, anyone can gain U.S. equity exposure on a DEX—no brokerage account, no time-zone constraints, and fewer regional barriers.
However, most products today remain at the credential stage: they issue and trade tokens, yet have not fully transformed them into financial building blocks for trading, hedging, and treasury management. This presents a challenge if the goal is to attract professional flow, high-frequency liquidity, and institutional participation.
DeFi faced a similar moment before “DeFi Summer.” ETH wasn’t widely lendable or composable until lending protocols emerged. Once ETH became an acceptable form of collateral, liquidity surged. Tokenized stocks will likely require the same transition: becoming collateralizable, tradable, and composable assets.
If the first growth curve represents spot trading volume, the second will be driven by capital efficiency and activity enabled through financial tools. Expect:
- Lending and credit backed by tokenized equities (e.g., Block Street)
- Short exposure and hedging instruments (inverse tokens, perpetuals, options)
- Structured strategies and basket/portfolio products interoperable across DeFi
Platforms that offer a unified on-chain experience—spot trading, shorting, leverage, and hedging—and make tokenized stocks usable across lending, options, and stablecoin protocols will hold a competitive advantage.
Bottom Line
Tokenizing U.S. equities and ETFs isn’t just about putting Wall Street on-chain — it’s about bridging the final gap between traditional capital markets and blockchain.
From issuance (Ondo) to multi-market access (Backed Finance) and liquidity unlocking (Block Street), the tokenized equity stack is steadily taking shape. With institutional participation expanding and trading infrastructure maturing, composable, tradable, and collateral-ready tokenized equities could evolve into one of the most impactful and value-accretive asset classes in the RWA market.