Tokenization of Stocks: The Best Narrative of the Fusion between TradFi and Web3

Stock tokenization is becoming a hot topic for the fusion of traditional finance and Web3 in 2025. Data shows that since the beginning of this year, the scale of stock tokenized assets has rapidly grown from almost zero to hundreds of millions of dollars. Behind this phenomenon is the accelerated process of stock tokenization moving from concept to implementation, evolving from synthetic assets to actual stock custody models, and extending towards higher-level forms such as derivatives.

The Evolution of US Stock Tokenization

Stock tokenization refers to the process of mapping traditional stocks into digital tokens using blockchain technology, with each token representing a portion of ownership of the underlying asset. These tokens can be traded on-chain around the clock, breaking the time and geographic limitations of traditional stock markets, allowing global investors to participate seamlessly.

Early stock tokenization projects like Synthetix and Mirror adopted on-chain synthetic asset mechanisms. Users can mint and trade "U.S. stock tokens" through over-collateralization, even covering a variety of assets such as fiat currencies, indices, and commodities. However, this model does not truly confer ownership of the corresponding stocks; it is merely speculation on price trends, with risks of liquidation imbalance and price decoupling.

The biggest feature of the current trend is the adoption of the underlying model of "real stock custody + mapping issuance", which is mainly divided into two paths:

1. Third-party compliant issuance + multi-platform access: such as xStocks and MyStonks, achieving 1:1 pegging of real stocks through cooperation with compliance institutions.

2. Licensed brokerage self-operated closed loop: Some trading platforms rely on their own licenses to complete the entire process from stock purchase to on-chain Token issuance.

The advantage of this model is that the underlying assets are real and verifiable, with higher security and compliance, making it easier to be recognized by traditional financial institutions.

Project Inventory

A complete tokenization stock ecosystem includes the infrastructure layer, issuance layer, and trading layer. Currently, market participants mainly focus on the issuance and trading segments.

Ondo Finance: The stockization extension of the RWA leader

As a leading project in the RWA tokenization space, Ondo Finance is expanding its business into the stock market. By collaborating with regulated custodians and clearinghouses, Ondo securely holds real US stocks and issues equivalent tokenized assets on-chain. This not only provides compliance assurance for institutional investors but also builds on-chain liquidity pools across assets, enabling the combination trading of tokenized stocks with other assets.

Injective: A financial RWA exclusive public chain

Injective, as a public chain focused on high-performance financial applications, has two major advantages in the RWA track:

1. The asset classes covered are wide, supporting the trading of various tokenized assets including US tech stocks, gold, foreign exchange, and more.

2. The direct connection capability with traditional financial institutions has opened up a closed-loop process from off-chain custody and clearing to on-chain mapping and trading.

Injective provides issuers with a stable compliance landing and asset management channel, offers a high-speed, low-cost execution environment for trading platforms and aggregation tools, and lays the foundation for the tokenization of stocks into derivatives and portfolios.

MyStonks: The On-chain Liquidity Pioneer for US Stocks

MyStonks adopts an order flow payment mechanism, routing order flows to professional market makers for matching, reducing slippage and transaction costs, and enhancing order execution speed and depth. The platform is actively expanding diversified financial services such as derivatives, lending, and staking. In the future, users will be able to engage in leveraged trading of U.S. stock tokens, collateral lending, and portfolio investment.

Backed Finance: Cross-Market Compliance Expander

Backed Finance's layout has a cross-market and multi-asset vision, and its compliance model is highly aligned with the European MiCA regulatory framework. The platform not only supports the tokenization of US stocks but also covers ETFs, European securities, and specific international index products, providing global investors with multi-market, multi-coin, and multi-asset investment options.

Block Street: Tokenization Stock Liquidity Release

As a DeFi protocol focused on tokenization of stock lending, Block Street allows users to directly deposit tokenized US stocks into the platform as collateral to obtain stablecoins or other on-chain liquid assets. This model achieves a funding utilization method of "not selling assets, liquidity in hand," filling the gap of tokenized stocks in the DeFi lending sector.

Future Development Trends

The first curve of the current tokenization of the US stock market is the growth of trading volume, while the second curve will be the expansion of financial instruments to improve the capital utilization rate and on-chain activity of tokenized stocks. Future development directions include:

1. Convert tokenized stocks into on-chain financial assets that can be widely used for trading, hedging, and capital management.

2. Develop richer derivative trading tools, such as DeFi lending protocols, shorting tools, options, and structured products.

3. Improve the composability of tokenized stocks so that they can be used as collateral, hedging targets, or composable asset baskets in various DeFi protocols.

Stock tokenization not only brings US stocks and ETFs onto the blockchain but also opens up the "last mile" between the real-world capital markets and blockchain. With institutional funds accelerating their entry and on-chain trading infrastructure continuously improving, tokenized US stocks are expected to become the most scalable and incremental asset class in the RWA space.