Tokenized Stocks in 2025: The Revolutionary Upsides and Hidden Pitfalls
Wall Street meets blockchain—but will this marriage last?
Tokenized stocks slashed settlement times from days to seconds, letting traders flip Tesla shares faster than Elon changes his mind. Fractional ownership opened markets to retail investors—assuming they dodged the 37% volatility spikes plaguing synthetic assets last quarter.
The dark side of 24/7 trading
When exchanges never close, neither do margin calls. Three major platforms halted tokenized stock trades during March's overnight liquidity crunch—just as traditional markets opened with perfect calm.
Regulatory whack-a-mole continues
SEC lawsuits crushed two tokenization projects this year, while the EU's MiCAR framework accidentally made Germany the wild west for synthetic equities. 'Compliance' currently means choosing which regulator to ignore.
For now, it's the best and worst of both worlds: stock market fundamentals dressed in crypto's risk profile. Perfect for gamblers who think quarterly earnings reports aren't exciting enough.
This probably won’t matter so much for smaller trades. But the current lack of liquidity undermines the value proposition of tokenized equities.
You can play around on Jupiter to see for yourself how a six-figure trade would eat a high price impact of up to a triple-digit BPS.
The silver lining is that equities are far less volatile than crypto, so maybe some market makers WOULD be willing to stomach that risk.
But until these issues get better, you can probably get much better execution and cheaper delta exposure with synthetic perps using Ostium, a perps DEX on Arbitrum that I’ve touched on previously.
Ostium’s co-founder, Kaledora Linn, notes that opening a $250k TSLA position through Ostium’s synthetic perps is roughly 100x cheaper than what you’d pay for a tokenized stock right now.
The only trade-off is that Ostium’s synthetic assets don’t enjoy the same capital efficiency of tokenized stocks (because they’re tokenized!).
You can now put your tokenized stocks on a money market like Kamino and borrow stablecoins against them.
Loading Tweet..It’s not clear if Robinhood will enable that composability, though.
An early peek under the hood (thanks to Ren of Electric Capital) of Robinhood’s tokenized stock contracts reveals requirements of KYC/AML checks that limit transfers to approved addresses.
We’ll have to wait and see.
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