The Tokenization Craze in US Stocks: A New Narrative or Old Wine in a New Bottle?

Recently, the tokenization of US stocks has become a hot topic, with multiple platforms launching related products, attracting widespread attention. Is this phenomenon a brand new narrative or old wine in a new bottle? We invite three guests to discuss from different perspectives, covering technology, compliance, investment opportunities, and risks.

Tokenization of US Stocks: A Blend of the Old and the New

The tokenization of US stocks is essentially a branch of RWA( real-world assets), similar to the continuation of STO( security token offerings). There were similar attempts as early as 2017-2018, but they were mainly experimental at that time. As the regulatory environment gradually improves, traditional companies hope to participate in the cryptocurrency market for capital appreciation on-chain, driving this wave of enthusiasm.

Compared to traditional U.S. stocks, tokenized stocks support round-the-clock trading, have lower entry barriers, and offer greater liquidity. It lowers the trading threshold, but due to the lack of a完善的 arbitrage mechanism, on-chain prices may diverge from off-chain stock prices. Investors need to be wary of insufficient liquidity and slippage risks.

From the perspective of industry development, the tokenization of US stocks has both historical roots and is revitalized by regulatory and technological advancements. It not only reflects the endogenous growth of the cryptocurrency industry but also serves as an external force attracting the attention of traditional finance, bridging Web2 and Web3.

The Difference Between Tokenized Stocks and Traditional Stocks

Tokenization of stocks has three major differences from traditional stocks:

1. No Shareholder Identity: Tokenized stockholders only hold on-chain certificates, with no actual shareholder rights.

2. Price mapping attribute: similar to derivatives, only tracks price, no voting rights or governance rights.

3. High liquidity and low barriers: Supports around-the-clock trading, more flexible than traditional stocks.

In terms of compliance, issuers need to obtain relevant financial licenses to ensure asset custody transparency and thorough third-party audits. Regulatory focus is on transparency, asset security, and reserve proof.

The Risks and Opportunities of Tokenization of Unlisted Stocks

Tokenization of unlisted stocks carries significant risks:

1. Legal compliance and governance conflicts: The company may not recognize tokenized stocks, leading to unclear legal status.

2. Information asymmetry: The tokens may represent fund LP shares, and the specific information is not transparent.

3. Pricing is opaque: insufficient liquidity and imperfect pricing mechanisms make it difficult to protect investors' rights.

4. Authenticity cannot be verified: it is difficult to confirm the authenticity and quantity of the staked assets.

If the company cooperates, tokenization can provide startups with Pre-IPO pricing and cash flow recovery opportunities. However, high-quality companies often lack motivation, and small to medium-sized enterprises are more likely to attempt it.

Considerations for Choosing an Issuance Chain

The choice of issuing chain involves both technical and commercial considerations:

• Solana has become the preferred choice due to its large user base, fast transaction speeds, and mature DeFi ecosystem.
• Arbitrum may be related to the issuer's long-term plan (, such as building L2).
• The choice of chains is more based on commercial interests rather than purely on technical merits.

Long-term Value of US Stock Tokenization

The tokenization of US stocks has long-term value, similar to the transformation of stocks from offline to the internet. The decentralization and transparency of Web3 are expected to reduce trust costs, supporting round-the-clock trading and rapid pricing. Compared to traditional financial instruments, it has made progress in areas such as transparency, regulation, risk control, and technology.

However, at the current stage, there is a lot of speculation, and retail participation is low; it is still in the experimental phase. In the future, if traditional finance fully goes on-chain, tokenization of stocks is expected to realize more shareholder rights, but in the short term, it will still be led by institutions.

Overall, the tokenization of US stocks, as a branch of RWA, is expected to connect Web2 and Web3, reducing transaction barriers and costs. However, it still faces challenges such as insufficient liquidity, price deviation, lack of redemption mechanisms, and regulatory uncertainties. Long-term development requires the joint maturation of technology, regulation, and the market.