Stock Tokenization: A Deep Comparison of Two Mainstream Models and Future Prospects

Real world assets ( RWA ) tokenization has become a hot topic in the financial sector. Particularly, stock tokenization is gaining traction with the entry of fintech giants, and this transformation driven by blockchain technology is unfolding. This article will delve into the underlying logic of current mainstream stock tokenization products, focusing on key issues such as "how to achieve it" and "where the risks lie."

1. The Underlying Logic of Compliance Pathways

The primary challenge facing stock tokenization is compliance. The market has formed two distinctly different compliance paths:

Mode 1: xStocks - Open DeFi Path

xStocks Token legally represents ownership or interest in real stocks and is a mapping of stocks on the blockchain. Its core lies in embracing the openness of blockchain while avoiding legal risks through multiple layers of legal entities and a clear regulatory framework.

• Issuer: Issued by the Swiss company Backed Finance, in accordance with the Swiss DLT Act.

• Special Purpose Vehicle ( SPV ): Establish SPV in Liechtenstein to hold real stocks and achieve risk isolation.

• Asset support: Strict 1:1 peg, each Token corresponds to a share of real stock.

• Transparency: Integrated with Chainlink PoR to achieve proof of reserves.

• Dual-track liquidity: CEX market makers + DeFi protocol open liquidity.

Model 2: Robinhood - Compliance-first "Walled Garden"

The Robinhood Token is essentially a financial derivative contract that tracks stock prices, and the on-chain token is merely a digital certificate of the rights of the contract. This is a pragmatic "regulatory arbitrage," packaging the product as an existing financial instrument with clear regulations.

• Issuer: Issued by Robinhood Europe UAB, regulated by the Bank of Lithuania.

• Regulatory Framework: Classified as derivatives under the EU MiFID II framework.

• On-chain KYC and whitelist: Smart contracts embed strict permission controls.

• Limited DeFi composability: Assets are locked within the Robinhood ecosystem.

• Future Plans: Plan to develop its own Layer 2 network Robinhood Chain.

2. Differences in Technical Architecture

1. Choice of underlying public chain

• xStocks chooses Solana: pursuing ultimate performance, supporting high-frequency trading and DeFi interactions.

• Robinhood chooses Arbitrum: inheriting Ethereum's security and preparing for future self-built Layer 2.

2. Core Technology Components

• Smart Contract: xStocks is designed to be open, with transfer restrictions embedded in Robinhood.

• 预言机(Oracle): The key to price information synchronization and reserve proof.

• Cross-chain interoperability: such as Chainlink CCIP, to achieve asset cross-chain transfer.

3. Asset On-Chain and SPV Operation

For asset-backed tokens, SPV is the key that connects real assets and the blockchain:

1. Asset Isolation: Real stocks are deposited into an independent SPV
2. Minting Token: Authorize on-chain minting after SPV confirmation
3. Token distribution: through compliant exchanges or direct sales
4. Lifecycle Management: Handle company actions such as dividends and stock splits.
5. Redemption and Destruction: Ensure a 1:1 balance between on-chain circulation and off-chain reserves.

3. Business Model and Risk Assessment

1. Business Model

Robinhood:

• Forex Conversion Fee
• Potentially introduce order flow payments, membership services, etc.
• Explore the private equity market

xStocks:

• Transaction Fee
• Minting/Redeeming Fee
• B2B Asset Tokenization Services

2. Risk Assessment Matrix

• Regulatory Risks: Policy Changes, Cross-border Compliance Challenges
• Technical Risks: Smart Contract Vulnerabilities, Oracle Failures
• Market Risk: Price Fluctuation, Insufficient Liquidity
• Operational risk: custody security, KYC/AML failure
• Legal Risks: Unclear product classification, cross-border disputes

4. Market Structure and Future Outlook

Main Player Matrix Comparison

The market has formed three major camps:

1. Compliance First Model: Robinhood, Hashnote
2. Open DeFi model: xStocks, Synthetix
3. Infrastructure providers: Securitize, Tokeny

market trend

• From isolation to deep integration with TradFi and DeFi
• Clarification of regulations promotes compliant innovation
• Institutional entry brings liquidity and trust
• Private equity tokenization has become a new blue ocean.

Future Key Issues

• Long-term coexistence and competition between open and closed modes
• The race between technological innovation and legal frameworks
• The tokenization of assets has a profound impact on global financial markets.

Stock tokenization is reshaping the paradigm of asset issuance, trading, and ownership. Despite facing numerous challenges, the future direction it points to is irreversible. Market participants need to actively and prudently embrace this financial revolution based on a profound understanding of its underlying logic and potential risks.