The Rise of On-Chain US Stock Trading: A New Landscape for Crypto and Finance

Overnight, US stocks have become the new darling of on-chain trading. Several well-known trading platforms have launched US stock token trading services, supporting multiple US stock tokens, including popular stocks like Apple, Tesla, and Nvidia. At the same time, a well-known stock trading application has also announced that it will support US stock trading on the blockchain and plans to launch its own public chain.

This new narrative built around dollar stablecoins, tokenized US stocks, and on-chain infrastructure seems to be drawing Crypto into the vortex of financial narratives and geopolitical games, inevitably sliding it towards a new role positioning.

Tokenization of US Stocks: Old Wine in a New Bottle?

In fact, the tokenization of U.S. stocks is not a new concept. In the previous cycle, several representative projects explored a set of on-chain synthetic asset mechanisms. This model allows users to mint and trade U.S. stock tokens through over-collateralization, and even cover a variety of tradable assets including fiat currencies, indices, and commodities.

However, this synthetic asset model has not achieved large-scale application. The main reason is that price anchoring does not equate to asset ownership. Users are essentially just "betting" on prices, and once the oracle fails or there are issues with the collateral assets, the entire system will face risks of liquidation imbalance, price decoupling, and a collapse of user confidence.

In addition, the US stock tokens under the synthetic asset model are destined to be a niche market in Crypto. Funds only circulate within the on-chain closed loop, lacking participation from institutions or brokers, making it difficult to integrate into the traditional financial system and hard to attract structural inflows of incremental funds.

The Fund Flow Structure of US Stocks Under the New Architecture

The current round of tokenization in the US stock market has adopted a different model. From the disclosed information, these newly launched US stock token trading products use actual stock custody, with funds flowing into the US stock market through brokers.

In this model, users only need to hold a crypto wallet and stablecoins to bypass account opening thresholds and identity verification, easily buying US stock assets on-chain. Throughout the process, there is no need for a US stock account, and it is not affected by time zone differences or identity restrictions, allowing funds to be directly transferred to US stocks on-chain.

From a macro perspective, this is essentially the US dollar and the US capital markets utilizing Crypto as a low-cost, highly flexible, and around-the-clock channel to attract incremental global funds. It is noteworthy that under the current model, users can only go long, cannot go short, and there is no leverage or non-linear return structure.

This structure has created a "low-risk, high-certainty" channel for global funds to flow into the U.S. stock market. Funds from global Crypto users can enter the U.S. asset pool in an unprecedented low-friction, cross-border manner, allowing people from all over the world to participate in U.S. stock trading anytime and anywhere.

As more and more L2s, exchanges, wallets, and other native infrastructures connect to these "US stock trading modules", the relationship between Crypto and the US dollar, as well as Nasdaq, will become closer.

Analysis of the Pros and Cons of Tokenization in the US Stock Market

For users lacking investment channels in US stocks, especially crypto natives and retail investors from developing countries, the tokenization of US stocks undoubtedly opens a low-threshold avenue, achieving a certain level of "asset equality".

However, for users who already have U.S. stock accounts, especially trading users in Chinese-speaking regions, the current tokenized products for U.S. stocks seem to be somewhat lacking. The absence of short selling, derivatives, and other functions makes it difficult to meet advanced trading needs.

Nevertheless, the tokenization of US stocks may bring new opportunities to the DeFi ecosystem. Currently, on-chain DeFi faces a serious shortage of quality assets. If these tokenized US stocks, which are custodied and issued on-chain, can gradually integrate into DEXs, lending protocols, on-chain options, and derivative systems, they are expected to become new underlying assets, providing DeFi with more certain value materials and narrative space.

In the future, whoever can first develop products with strong composability and good liquidity, providing an integrated on-chain experience of "spot + short selling + leverage + hedging" will have the potential to create the next mainstream on-chain stock trading platform.

Conclusion

As the boundaries between Crypto and traditional finance become increasingly blurred, the trend of using stablecoins to break geographical limits, circumvent sovereign barriers, tax obstacles, and identity checks, ultimately establishing a new channel for the dollar through Crypto, has already emerged. This new narrative led by compliant dollar stablecoins is reshaping the relationship between Crypto and the global financial system.