On May 18, the daily trading volume of tokenized stocks surged to $3.57B, setting a new historical record. This figure was quickly forwarded. However, what’s more critical is: you think you are buying Nvidia and Tesla, but you may just be buying a “price promise.” The real “US stock on-chain” – the complete entry of stock ownership, voting rights, and dividend rights into the on-chain system – Wall Street has only just begun to seriously promote it. These two things are not the same.
In the past two years, on-chain finance has indeed done one thing right: making it easier for users to gain exposure to asset prices. Users can trade US stock-like tokens 7 × 24 hours, settle with stablecoins, and obtain price fluctuation gains from US stock assets with lower thresholds. But these changes are all concentrated on the same level: the trading method is reconstructed, but the asset rights are not reconstructed. What you get is “price exposure” rather than “asset ownership.” The real problem is actually at the rights level – what legal rights does that token you hold on-chain correspond to? This is the most important and easily overlooked issue behind today’s $3.57B.
“Tokenized stock” is not a unified product, but a gradually progressive structural spectrum. From left to right, the rights gradually become complete, but compliance and institutional costs also gradually increase.
The first layer: synthetic price exposure (shadow assets). This layer is the most mainstream form currently. The token you hold is essentially just a price tracking tool. The underlying layer usually maintains price anchoring through delta hedging, market maker risk management, partial real stock collateral, and over-the-counter contracts. But the key point is that what you get is not the asset, but the price result. The risk is not in the stock, but in the platform’s credit.
The second layer: custody holding structure (limited rights mapping). This layer begins to have real stock custody. Usually through SPV or custody structure, 1:1 asset holding is realized, and attempts are made to isolate user assets. Compared with the first layer, this is a qualitative change: the underlying assets really exist, and the structure is closer to “asset mapping.” But the problem still exists, you are still not a shareholder. Voting rights and governance rights are usually not in the hands of users. Dividends are also often “redistributed” through on-chain mechanisms, rather than executed by the traditional securities system. In essence, this is economic rights mapping, not legal rights mapping.
The third layer: rights interface layer (proxy voting begins to appear). This layer begins to touch on “rights.” Some projects have begun to connect with traditional financial infrastructure (such as Ondo’s cooperation with financial services giant Broadridge), so that on-chain users can view corporate governance information, receive shareholder documents, and express opinions on voting matters. It looks more like a “shareholder,” but the key difference is: you are participating in the process, not owning legal voting rights. Real voting rights may still be uniformly executed by the intermediate structure. The essence of this layer is: rights are beginning to be visible, but not yet executable.
The fourth layer: settlement layer tokenization (pilot stage). This layer is the real “complete stock on-chain.” The core features include: dividends, stock splits, and voting are executed in a unified settlement layer; on-chain records are gradually aligned with legal registration; clearing is completed by regulated financial infrastructure. What is driving this layer is no longer crypto-native projects, but clearing institutions, exchange systems, traditional brokerage firms, and investment banking networks. What they are doing is very clear – digitizing the underlying infrastructure of the securities market.
Many people will compare this round with FTX’s tokenized stock attempt in 2021. But the essence is completely different. In 2021, FTX launched tokenized versions of about 55 stocks on the Solana chain, supporting fractional trading and also being used as collateral. But it has two fatal flaws: no real shareholder rights and no securities registration completed with the SEC. So it is essentially more like an “on-chain price mapping product” rather than a real securities infrastructure. And the key to this round of changes is: the participants have changed. Now entering the system are DTCC, the New York Stock Exchange, Nasdaq, Morgan Stanley, and the SEC.
In the past two years, the on-chain world has solved the problem of “how to trade asset prices”; now it is beginning to face the problem of “how to define asset rights themselves.” The difficulty of this step is not in technology, but in the system, including: how to map shareholder identity, how to execute voting rights, how to automate dividends, and how to coordinate cross-border supervision. The question has changed from “can it be done” to: whether the existing financial order will be rewritten.
If the entire tokenized stock system is compressed to the bottom layer, there are only three questions left: First, can the on-chain address become a shareholder identity in the legal sense? Second, can dividends, voting, and stock splits be automatically executed on-chain and legally recognized? Third, can cross-border supervision and clearing systems operate synchronously with on-chain systems?
$3.57B is not the end, nor is it the climax. It is more like a signal – the past tokenized stocks were only changing the “trading method.” And the changes that are now beginning to occur are a deeper structural migration. The “rights system” of the global securities market is being re-disassembled and attempts are being made to remap it to the chain. If this process continues to advance, what will be changed is not only whether you can buy Nvidia, but how the global capital market is defined.
*The content of this article is for reference only and does not constitute any investment advice. The market is risky, and investment needs to be cautious.
Tokenized Stocks: Beyond $3.57B Trading Volume – The Great Rights Migration
The recent $3.57 billion trading volume record in tokenized stocks represents more than just a milestone—it signals a fundamental inflection point in the evolution of digital assets. While market participants celebrate the headline figure, the critical issue beneath the surface is the profound misalignment between price exposure and actual asset rights that defines today’s tokenized stock landscape.
The Four-Layer Spectrum of Tokenized Stocks
The market’s structure is not uniform but exists across a progressive spectrum, with each layer representing a different relationship between on-chain tokens and underlying securities:
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Synthetic Price Exposure (Shadow Assets): This dominant layer represents little more than sophisticated derivatives. Tokens here track prices through delta hedging and market maker mechanisms, offering no actual ownership rights. The risk profile is dominated by counterparty credit rather than market exposure—when platforms like Terra/LUNA or FTX collapsed, synthetic holders discovered they held nothing but price promises.
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Custody Holding Structure (Limited Rights Mapping): A qualitative improvement with actual stock custody via SPVs or similar structures. These products offer better asset protection but remain fundamentally incomplete. Holders gain economic exposure without the full suite of shareholder rights—voting remains centralized, and dividends are often redistributed through on-chain mechanisms rather than executed through traditional securities infrastructure.
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Rights Interface Layer (Proxy Voting): This emerging layer begins addressing the rights gap through partnerships with traditional financial infrastructure. Projects like Ondo’s collaboration with Broadridge represent early attempts to connect on-chain users with corporate governance processes. However, these remain proxy systems rather than direct legal rights.
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Settlement Layer Tokenization: The theoretical “holy grail” where dividends, voting, and corporate actions are executed through unified settlement layers aligned with legal registration. Currently in pilot stage, this layer is being driven not by crypto-native projects but by traditional institutions like DTCC, NYSE, and Nasdaq.
Market Implications and Risks
The tokenized stock market’s growth creates both opportunities and significant risks for investors:
Risks:
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Regulatory Arbitrage Collapse: As SEC scrutiny intensifies and traditional institutions enter the space, many current synthetic products may face enforcement actions or forced restructuring. The difference between FTX’s 2021 attempt and current institutional approaches is profound—participants now include regulatory bodies themselves.
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Rights Value Dilution: Even sophisticated custody structures fail to capture the full value of equity ownership. Without voting rights and direct dividend access, token holders miss significant aspects of shareholder value that become particularly relevant during corporate actions or governance contests.
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Counterparty Concentration: Synthetic products create hidden systemic risk. When platforms manage price pegs through hedging strategies, they accumulate counterparty exposure that can become fragile during market stress, as we’ve seen in numerous DeFi failures.
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Decoupling Potential: As demonstrated by the collapse of Terra’s mirror assets, synthetic tokens can decouple dramatically from underlying assets during stress events, leaving holders with purely worthless tokens.
Opportunities:
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Rights Innovation Premium: Projects successfully bridging the gap between on-chain representation and legal rights could capture significant value premiums as the market matures. The ability to execute verifiable voting rights or direct dividend access would represent a fundamental innovation.
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Institutional On-Ramp: As traditional finance enters the space, we may see increased liquidity, more sophisticated products, and potentially improved regulatory clarity benefiting early movers who build compliant solutions.
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Cross-Border Capital Efficiency: True tokenization could enable more efficient cross-border trading of traditionally restricted assets, creating new markets and liquidity pools.
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Automated Corporate Actions: The potential for blockchain to automate and streamline complex corporate actions represents a fundamental efficiency improvement that could reduce costs and increase transparency for all market participants.
The Great Migration: From Trading Methods to Rights Systems
The $3.57 billion trading volume represents a transition from “how to trade asset prices” to “how to define asset rights themselves.” This is not merely a technical evolution but a systemic one that challenges the very foundation of securities law and corporate governance.
The critical questions now include:
1. Can on-chain addresses become legally recognized shareholder identities?
2. Can corporate actions be executed on-chain with legal validity?
3. Can cross-border supervision operate seamlessly with on-chain systems?
The answers will determine whether tokenized stocks become a permanent fixture of the financial landscape or merely a transitional product in the evolution of digital assets.
Investment Considerations
For sophisticated investors, the key is distinguishing between price exposure products and rights-enabled structures:
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Short-term: Synthetic products may offer leveraged price exposure but carry significant counterparty risk and regulatory uncertainty.
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Mid-term: Custody structures with partial rights mapping offer better risk profiles but remain fundamentally incomplete.
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Long-term: True settlement-layer tokenization, when implemented with proper legal frameworks, could represent the most sustainable value proposition but remains in early development.
The involvement of traditional institutions suggests we’re entering a phase where regulatory compliance will increasingly determine which projects survive and thrive. The $3.57 billion trading volume is not the climax but rather a prelude to a deeper structural transformation of how financial assets are represented, traded, and governed in the digital age.