Rethinking Stock Tokenization: Beyond Crypto-Native Thinking

Perhaps we have stayed too long in the Crypto industry, and when thinking about problems, we often limit ourselves to a Crypto-centric perspective. No matter what happens, we always ask first: "What are the benefits for Crypto? Does Crypto need this? Can it be hyped?"

Taking stock tokenization as an example, it seems to have little use from a Crypto perspective. A stock token with a daily fluctuation of only 1-3% cannot compare to the excitement of a meme coin with a daily fluctuation of 300%. Moreover, there is no essential difference between speculation in the stock market and in the crypto world; the narrative is not compelling enough. This kind of token seems to be merely competing for liquidity in Crypto, appearing utterly meaningless. This is a typical Crypto-centric mindset.

However, we might need to try thinking from a different perspective: maybe it's not that Crypto needs stocks, but rather that stocks need Crypto.

Imagine you are the CEO of a company about to go public, and you have two choices in front of you:

First, it is a traditional market that trades for 7-8 hours a day, closes on weekends and holidays, and has strict regional restrictions.

Second, it is a market that operates around the clock and allows any connected user globally to participate in trading.

Which one would you choose?

Imagine again, if your stock Token could not only be traded but also used as collateral to borrow stablecoins in lending protocols? If it is a dividend stock, it could also be combined with more on-chain protocols like certain Tokens to create yield products, principal and interest separation products, and various yield products? All of these would lock in your stock liquidity, increase the use and speculation space of stocks.

So, how would you choose?

I think the fact that it allows for 24/7 global borderless trading is already attractive enough for executives of publicly traded companies who are proficient in trading. Clearly, the second market refers to the Crypto form that enters the blockchain after stock tokenization.

Therefore, the Crypto market does not necessarily need stocks, but stocks may very much need Crypto, especially public companies after 2025. Not adopting round-the-clock borderless trading means losing a significant amount of trading time, user base, and composable gameplay, thus losing huge liquidity and market. In the long run, on-chain stocks that have more trading time and users will gain more liquidity and ultimately master the pricing power.

This is exactly where the impact of stock tokenization on the traditional stock market lies.

Some may ask: Stock tokenization has been attempted for many years but has never really taken off. Why is it suddenly feasible now? Is it just another hype of an old concept?

Indeed, since 2017, there have been many projects exploring the tokenization of stocks, such as a certain STO issuance platform, a certain stock token exchange, and even stock token experiments on a certain trading platform, but they all ended in failure. The main reasons are regulatory restrictions, as well as inappropriate timing and identity of the promoters.

The previous drivers ( were mostly Crypto native forces that had not yet become mainstream two years before 2024. Before the official approval of the Bitcoin ETF, before traditional institutions poured in, and before the introduction of friendly policies in the United States, Crypto was still a small market that was non-mainstream and primarily retail-focused.

However, since 2024, the Crypto market has gradually transformed into one led by the government, guided by policy, and dominated by institutions. ETF approvals, traditional giants entering the market, and a series of friendly policies introduced by the US government have changed the situation. The key lies in who will drive this process.

The institutions currently vigorously promoting stock tokenization are mainly divided into two groups:

Group One: a certain brokerage platform, a certain well-known exchange, etc. Group Two: A large asset management company, an investment bank, etc.

The first group is relatively easy to understand. As a new brokerage platform aimed at retail investors, it is already diverting users from the traditional stock market, and promoting stock tokenization is a continuation of its original strategy to further erode the market share of traditional stock trading. Meanwhile, some Crypto exchanges are expanding the traditional stock market through stock tokenization beyond Crypto.

The first group of institutions are all visible competitors in the traditional stock market, but for traditional stock trading markets like NASDAQ and NYSE, their scale is still very small and does not pose a significant threat.

The second group is unusual.

The world's largest asset management giants manage over $11.5 trillion in assets; a large bank manages $3.5 trillion in assets, and an investment bank manages $2 trillion in assets, collectively holding over $17 trillion in assets. This scale is nearly equivalent to 85% of the total market capitalization of the top ten stocks globally.

They not only have enormous liquidity and are the largest institutional users of traditional stock markets, but one of their managed ETFs accounts for 35% of the total size of the US ETF market.

They are still the largest investment banks and stock brokers.

It can be said that these asset management giants not only control liquidity, but also possess a large number of stock issuance rights for companies planning to go public and numerous institutional trading users, however, what they lack is: the stock trading market itself.

The asset trading market, as a liquidity center, is the most lucrative part of the financial market, sitting at the top of the food chain.

In traditional financial markets, these asset management giants and investment banks find it difficult to enter the stock trading market, no matter how powerful they are. However, the emergence of blockchain and Crypto has created a new global trading market that operates around the clock and without borders. Since 2024, U.S. policies have gradually loosened restrictions on this market, so how could the giants miss this opportunity to overtake in a curve?

Stock tokenization is the first step for these asset management giants to transfer traditional stock assets onto the blockchain. To this end, they will also build dedicated blockchains, launch blockchain-based financial products related to stocks, establish on-chain liquidity markets, and even create their own stock token exchanges.

If some exchanges are directly competing with traditional stock markets by promoting stock tokenization, then these asset management giants, top investment banks, and brokers are migrating liquidity, stock issuers, and even trading users as a whole, restructuring on the blockchain, which can be seen as a gradual undermining of traditional stock markets.

In the face of huge interests, as long as policies do not obstruct, nothing can stop the footsteps of the giants.

This is precisely the fundamental reason why they are actively promoting the tokenization of stocks. Although it is currently just the beginning, once it starts, it will develop in an irreversible direction.

So, how is this wave of stock tokenization different from the previous ones?

The timing has changed ) institutions have entered the market (, the environment has changed ) policy support (, and the drivers have also changed ) major players capable of competing with the stock market are personally involved (.

Therefore, this wave of stock tokenization is indeed different from the past.

So, do on-chain stocks really have advantages over traditional stocks?

Is on-chain finance really more competitive than traditional finance?

On-chain does have advantages.

In addition to the repeatedly mentioned全天候全球交易市场, on-chain finance has another important advantage: lower costs, higher efficiency, and maximization of capital efficiency.

The biggest operational cost in traditional financial markets is bookkeeping and settlement clearing. Just for bookkeeping, multiple sets of accounts are required for regulation, taxation, internal management, and user preparation. According to statistics, the bookkeeping costs for certain exchanges account for about 15%-20% of operational costs each year, approximately $300-400 million/year.

Settlement and clearing require payment to intermediary institutions, estimated to account for 20%-45% of operating costs, approximately 400-600 million USD per year. Additionally, the settlement time for intermediary institutions in the U.S. stock market is T+2, making real-time settlement (T+0) impossible, resulting in high costs and low efficiency.

After the tokenization of stocks, everything has been simplified. All accounts are completely open and trustworthy on the chain; whether external or internal accounts are on the chain, the bookkeeping cost is almost zero and the credibility is extremely high; settlement and clearing are also conducted on the chain in real-time, and users just need to pay Gas. The costs of bookkeeping, settlement, clearing, and settlement time have all been significantly reduced, which is precisely the cost reduction and efficiency enhancement brought by Crypto technology.

On-chain finance not only reduces costs and increases efficiency, but also creates a round-the-clock, borderless trading environment that brings about the maximization of capital efficiency in financial markets.

Since on-chain finance has completely broken the limitations of traditional financial markets in terms of trading time ), geographical access (, settlement efficiency ), and speed (, it has fully released capital energy across these three dimensions.

We can roughly estimate: assuming the previous average transaction time was 8 hours, now it is 24 hours, the time dimension is expanded by 3 times; the regional access has expanded from local markets to a borderless on-chain market, tentatively calculated as an expansion of 3 times, the spatial dimension is expanded by 3 times; the settlement efficiency has changed from T+2 to T+0, tentatively calculated as an improvement of 3 times, the speed is increased by 3 times. Therefore, the capital efficiency of on-chain finance is roughly 333=27 times that of traditional finance.

With the extreme flexibility of on-chain finance and its composability, various nested on-chain financial protocols can further unlock capital efficiency.

In the face of an on-chain financial market that can both reduce costs and increase efficiency while maximizing capital efficiency, traditional giants are naturally entering the field one after another. It is no wonder that the CEO of a large asset management company personally stated, "In the future, stocks and bonds will operate on a single universal ledger."

Promoting the tokenization of stocks is just the first step. To achieve a fully on-chain financial market, a complete and thorough new financial movement is needed, which we can call the "Hyper-Spatial Asset Movement."

What is "transcendent space-time asset movement"?

Because on-chain finance completely surpasses traditional finance in the three dimensions of time, space, and speed, an ever-accelerating, timeless parallel financial universe is being built on-chain for global users.

Therefore, we refer to the process of migrating off-chain assets to on-chain as the "transcendent asset movement through time and space," abbreviated as "transcendent asset movement."

Stock tokenization is a part of this movement. This movement also includes fiat stablecoins, bond tokenization, and a variety of alternative assets such as people's attention ) memes and similar concepts (, etc.

Of course, this cross-time and space asset movement is currently facing a series of challenges:

For example, the current stock tokens are more like on-chain stock derivatives, and still lack rights such as voting rights and dividends; the liquidity of current stock tokens is still very low compared to the traditional stock market; the laws and regulations regarding stock tokenization are still being improved, and so on. These are some of the challenges that this movement is facing.

Of course, where there are challenges, there are opportunities.

For example, some projects have obtained recognition from traditional financial systems through ISIN coding, which may allow future stock tokens to have more complete equity rights equivalent to stocks; while other projects have obtained U.S. transfer agent licenses, which may enable stock tokens to directly connect with the liquidity of traditional stock exchanges. These are all very valuable explorations.

With large asset management companies, investment banks, and other giants continuously entering and promoting with quality assets, liquidity, and even institutional users, I believe these issues will be solved one by one.

Every technological revolution is a revolution of cost reduction and efficiency improvement. On-chain finance built on blockchain completely crushes off-chain finance in terms of cost reduction and efficiency improvement. Once this advantage and trend are established, stakeholders will naturally spare no effort to promote it.

In short, this transcendent asset movement has already begun, and 2025 is just the first year.

Finally, let's return to the Crypto standard.

What opportunities does this wave of hyper-temporal asset movement offer for Crypto practitioners? Which tokens are worth paying attention to?

First of all, the hyper-dimensional asset movement requires a decentralized asset issuance and trading environment that is widely adopted, namely a mainstream public chain that supports smart contract functionality. Looking across the entire Crypto field, currently, there are only two main public chains that can bear this heavy responsibility. One of the chains has a more complete financial infrastructure and a larger asset accumulation scale. The other, as a representative of high-performance on-chain finance, has also attracted a large number of users and funds. Although there are also some new public chains eager to try, from the perspective of consensus strength and adoption scale, currently only these two public chains are worth paying attention to.

Secondly, there are some leading on-chain financial protocols, such as the largest on-chain lending protocol, the largest interest and principal separation protocol, and the largest on-chain contract protocol. These protocols currently support mainstream Crypto assets and will be able to support stock tokens in the future. Imagine, you could borrow stablecoins by staking a certain company's stock tokens on a lending protocol; you could also separate the principal and interest of dividend stock tokens on a certain protocol; and you could open a 50x long/short position on a certain technology company's contract protocol.

For entrepreneurs, developing on-chain financial protocols specifically supporting stock tokens could be an opportunity, such as on-chain contract protocols and lending protocols for stock tokens and other infrastructure.

So, do altcoins have a future?

I can almost say with certainty that any altcoin that does not become an on-chain financial infrastructure or core component will officially enter the boundless darkness as the dawn of the hyper-temporal asset movement arrives.

In the end, how will Bitcoin develop?

Bitcoin has always been above this system, its logic remains consistent - it is the value anchor of the on-chain financial world, it is digital gold, and it is the only currency in the on-chain world.

The fiat currencies continuously issued by countries around the world, holding