Deconstructing the Narrative of US Stocks on the Blockchain

BlockFocus
2025-03-31 08:30:48
Collection
Author | @0xSleepinRain

In the market outlook from the day before yesterday, I mentioned: "The on-chain narrative of US stocks is one that I am relatively optimistic about for the year."

Today, I will elaborate on my thoughts.

The renewed focus on this narrative area is due to @BackedFi. There have been similar concepts in the market before, but they ultimately fell through due to regulatory issues. After Trump took office, a series of changes in regulatory policies made the on-chain aspect of US stocks feasible again.

The core reason for my optimism about the on-chain narrative of US stocks is simple:

The hype in the crypto market is essentially about stories and models. Narratives like AI, AI Agents, and RWA are stories, while DeFi, GameFi, and mining machines are (Ponzi) models. The stories are about mindshare, which means telling stories that can attract market buying interest. Among these, the stories of Web2 Attention are the most prevalent, such as AI metaverse. The models are not worth elaborating on, as they are basically Ponzi schemes. Essentially, it’s about the old waves cutting the new waves.

The on-chain narrative of US stocks falls into the former category. I believe this is a story that can make a market willingly pay up — this is also the reason I am optimistic about this narrative, and it will inevitably integrate DeFi and RWA during its development, bringing new growth to these old narratives.

In the "WEB3 MINT TO BE" column by Mint Ventures @xuxiaopengmint, Teacher Mindao mentioned that the benefits of on-chain US stocks can be summarized in four points:

1. Improved financial efficiency: Traditional financial clearing systems are inefficient, while blockchain can significantly enhance the speed of fund settlement, reduce costs, and allow for round-the-clock trading.

2. New uses for user "empowerment": Tokenized stocks are not just equity certificates; they can also have utility functions (such as fee discounts, participation in staking, service exchanges, etc.).

3. Breaking territorial regulatory limitations: Tokenized stocks can circulate globally, providing a larger capital pool for US stocks.

4. Enhanced integration with DeFi: Stock tokens, as new tradable assets, naturally fit into the infrastructure of DeFi (DEX, lending protocols, etc.).

Of course, when this narrative grows larger, it will inevitably attract regulatory scrutiny. In the end, it boils down to two words: "compliance." The current core issue is also the uncertainty of regulation.

Everything else is irrelevant to the conclusion.

Currently, aside from regulation, there are no obstacles for Crypto; basic infrastructures like DEX, collateralized lending, and cross-chain solutions are basically readily available.

For example, @injective now supports futures trading for US stock indices, Nvidia, McDonald's, and Tesla. The trading occurs on its on-chain exchange Helix (Injective is not truly on-chain for US stocks, but it supports futures trading for US stock-related tickers).

The core architecture of this product is iAssets. At the trading end, users act as counterparties to each other and to market makers, using an order book to match trades. On the DeFi side, thanks to the programmable nature of iAssets, they can be used in scenarios like collateralized lending, yield strategies, leveraged positions, structured products, and re-collateralization.

In simple terms, iAssets transform static RWA assets into dynamic assets usable in DeFi.

Currently, Injective does not need to worry too much about regulatory issues, but it is indeed laying out its narrative for on-chain US stocks. This part of the layout may become a growth point for $INJ.

Backed operates on Base, backed by the big tree of Coinbase (Coinbase Ventures invested), and it is genuinely putting US stock assets on-chain. For example, this month, Backed launched tokenized Coinbase stock wbCOIN on Base. It directly uses Aerodrome as the liquidity exchange for wbCOIN. The assets it issues are fully collateralized 1:1 by real assets.

The regulatory risks it faces are somewhat higher (it utilizes the European MiFID II framework and Swiss DLT regulations to achieve unlicensed tokenized stocks, making it compliant in Europe at least).

My attitude towards it is to participate if possible (be an LP), firstly because it’s still early, and secondly for potential future airdrops; perhaps after US regulations are clarified, its native protocol token could also be listed on Coinbase. However, this is a "vague prediction," so investments should not be too large; small amounts can be used to create multiple accounts.

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