The $2 Billion Rise: Behind the Recent Growth of Tokenized Equities

Rising traction: Tokenized equities remain one of the hottest sectors in digital assets. Last week, the market surpassed $2 billion in market value for the first time, marking an increase of ~370% over the past twelve months.

• New products and investments: This growth has coincided with a wave of new product launches and infrastructure developments. Robinhood Stock Tokens went live, while DTCC completed its first live production trades involving tokenized entitlements. Money is following the same direction: after Deutsche Börse and Nasdaq backed Kraken and NYSE invested in OKX earlier this year, Citadel Securities announced a $400 million strategic investment in Crypto.com yesterday. The common thread is traditional market-infrastructure firms and market makers taking positions in the platforms they expect to carry tokenized assets.

Why it matters: As more traditional assets move onchain, the market is fragmenting rather than consolidating. Over the past year, the market has largely been shaped by two approaches. Issuer-sponsored offerings, such as the tokenized shares issued by Galaxy, Bullish, and Securitize, represent actual company equity and generally preserve stronger shareholder rights, but many remain restricted to whitelisted holders and offer limited onchain utility. Third-party products, including xStocks and Ondo Stocks, typically provide greater onchain transferability and deeper DeFi integration, but rely on separately issued wrappers that generally offer economic exposure without direct shareholder rights.

A hybrid approach: The widening gap between these models is prompting a new group of providers to combine their respective advantages. One example is crypto-native exchange Backpack, which recently launched its brokerage platform, Backpack Securities. The platform gives users access to conventional U.S. stocks through traditional securities infrastructure, much like brokers such as Robinhood or Charles Schwab. However, users can also convert eligible shares into Backpack-issued tokenized securities on Solana and back again, allowing them to move between traditional brokerage rails and onchain markets, including DEXs and compatible DeFi applications.

• Converging markets: Last week, Backpack expanded its offering by introducing 24/7 trading in traditional, non-tokenized U.S. equities. The service relies on the platform’s own order book and market makers, allowing users to trade conventional shares outside standard market hours and further blurring the lines between traditional and onchain equity trading.

Awaiting guidance: Which model ultimately prevails will likely be decided by regulators, above all the SEC. Since last summer the agency has been preparing a so-called innovation exemption, a sandbox-style framework that would let qualified firms issue and trade tokenized securities without full registration.

• Sudden delay: Initially expected in May, the exemption was reportedly delayed over the very model driving much of today’s growth: third-party tokens issued without the involvement of the underlying companies. Critics warn that such structures could complicate dividend payments and shareholder voting as multiple tokenized versions of the same stock spread across different networks.

Outlook: The exemption is still expected, but the SEC has not communicated a new timeline since, leaving the market, for now, to run ahead of the framework meant to govern it.

Thomas Labenbacher is founder and CEO of Assetera, a Vienna-based platform for issuing, buying, and trading securities onchain.

What drives the adoption of tokenized equities today?

Today, adoption is driven more by providers than by investor demand. As sideways crypto markets pressure trading revenues, crypto platforms and exchanges are turning to tokenized equities primarily to diversify beyond crypto-dependent income.

Still, demand is already more user-driven in jurisdictions where investors lack easy access to U.S. equities. For these users, tokenized stocks are a compelling product.

But for investors who can already purchase the same shares through traditional brokerages, access alone is not enough. Here, the opportunity lies in connecting tokenized equities to DeFi. This allows platforms to enable securities-backed lending, margin lending, automated strategies, and other yield and investment products that are harder to offer through traditional infrastructure.

That additional utility could broaden user demand significantly. But long-term adoption will depend on whether jurisdictions can accommodate tokenized equities within existing securities frameworks while preserving ownership rights, investor protections, and compliant access to DeFi.

Frederick Hopkins is Research Analyst at Token Terminal, a leading full stack onchain data platform.

What does onchain data tell us about where tokenized equities stand today?

The data broadly echoes Thomas’s point: the market has achieved initial issuance and distribution, with $2.3 billion outstanding, but genuine financial utility is only beginning to emerge. Three use cases dominate, with different standards leading in each:

1. Investing: Around 620,000 wallets now hold tokenized equities. Ondo accounts for the largest share of market capitalization at 42%, while Ethereum remains the leading issuance network with a 34% share.
2. Trading: xStocks accounts for ~47% of trading volume over the past year, with most activity concentrated on Solana and BNB Chain. Although 24/7 trading is possible, meaningful activity still largely follows traditional market hours. Over the past 30 days, ~97% of Uniswap volume occurred on weekdays, while weekend spikes were mostly isolated events.
3. Lending: This remains the smaller use case, with only $23.1 million deposited in lending markets. xStocks dominates activity, Kamino on Solana is the leading venue, and ETF-linked products are used most often as collateral, likely because they are less volatile than individual stocks.

We expect these three use cases to remain dominant, with the use of tokenized equities as collateral for perpetual futures trading likely to emerge as the next major application.