Who will emerge as the leader among the three driving forces of US stock tokenization? A detailed explanation of the differences between StableStocks, xStocks, and Robinhood.

Author: @BlazingKevin_, the Researcher at Movemaker

Under the expectations of "deregulation" that Trump may bring, the long-dormant tokenized stock sector is reigniting its fire in 2025 with a new look of RWA. Bringing the most liquid assets in the world—U.S. stocks—into the crypto industry, allowing crypto users worldwide to trade anytime and anywhere, is undoubtedly a grand and alluring narrative.

However, this road is not smooth. From the early concept of STOs to the synthetic asset experiments of DeFi Summer, and the brief attempts by FTX and Binance, the history of tokenized stocks is full of twists and turns. Now, with subtle changes in the regulatory environment, a new round of competition has begun.

In this competition, three forces are emerging, representing three distinctly different paths: the "dimensionality reduction" of internet brokerage giant Robinhood, the "open Lego" of DeFi native xStocks (issued by Backed Finance and distributed by Kraken, among others), and the "hybrid model" of the mysterious newcomer StableStocks, supported by institutions like Matrix Partners.

This article will delve into the three driving forces, explaining their legal core, business models, and key differences, as well as exploring who is most likely to emerge victorious in this high-risk game.

1. The Four Waves of Tokenized Stocks

To understand today's competitive landscape, it is necessary to review history. The development of tokenized stocks has roughly gone through four stages:

1. STO Emergence Period (2017-2018): The concept of STO (Security Token Offering) emerged, aiming to bring traditional securities onto the blockchain in a compliant manner. However, due to the lack of unified standards, high compliance costs, and a shortage of liquidity in the secondary market, this attempt quickly came to a halt.
2. Synthetic Asset Experimental Phase (2020 DeFi Summer): Projects represented by Synthetix and Mirror Protocol attempted to mint "synthetic assets" pegged to US stock prices through over-collateralized crypto assets. This model sidestepped regulatory challenges of directly holding stocks, but ultimately failed due to an inability to find PMF. Insufficient on-chain trading demand led to a lack of incentive for market makers, resulting in liquidity exhaustion, and ultimately most projects delisted related assets citing "regulatory considerations."
3. CEX Trial Period (2020-2021): Centralized exchanges like FTX and Binance launched tokenized stocks with the collaboration of licensed financial institutions. This model attracted considerable trading volume at one point (FTX's monthly trading volume reached $94 million in October 2021), but soon faced immense regulatory pressure due to direct competition with traditional exchanges like Nasdaq. Binance's services were halted just three months after launch, and FTX's operations ended with the collapse of its empire.
4. RWA Renaissance ( Current ): Under the new regulatory expectations, the track is restarting. This time, the core narrative has shifted to RWA, emphasizing the issuance of tokens backed 1:1 by real stocks through a compliant legal framework, prioritizing asset security and transparency.

II. Current Market Landscape Overview

According to data from RWA.xyz, the total issuance of the current RWA stock market is approximately $374 million, but growth is slow. The market landscape exhibits characteristics of fragmentation:

• Exodus (EXOD): The largest by market cap (approximately $258 million), but its model is more symbolic. Users can migrate the NYSE-listed EXOD shares to the Algorand chain, but this is merely a "digital twin" and does not include any on-chain rights or the ability to trade on-chain.
• Dinari: This is a model of compliant exploration. The company is registered in the United States and has obtained a valuable broker-dealer license. However, to meet strict regulations, the dShares it issues cannot be freely traded on-chain; all transactions must be conducted through its official website during US stock trading hours. This makes its product experience no better than that of traditional brokers like Futu, and it resembles a traditional broker that uses cryptocurrency as a deposit channel, thus limiting its market size.
• Montis Group: Montis Group is a digital asset issuer based in the UK, with a market capitalization of approximately $55 million, focusing on "tokenizing" real assets such as stocks and bonds in Europe. However, similar to the case of Exodus, Montis has currently only achieved the tokenization of its own stocks, and these tokens cannot be freely traded on-chain. For Web3 investors seeking liquidity and composability, this model has little practical significance at this stage.

It is against this backdrop that the entry of Robinhood, xStocks, and StableStocks has brought three more imaginative paradigms to the market.

Three, The Three Carriages - In-depth Deconstruction of Three Models

We will analyze these three major players from three dimensions: legal kernel, business model, and composability.

1. Robinhood: Derivative Contracts + B2C + Controlled Ecosystem

• Legal Framework and Compliance Path: There are quite a few companies exploring the combination of "crypto + stocks" globally, but Robinhood's approach stands out. It did not choose to directly issue tokens representing ownership of stocks, but instead entered the market in a more flexible way: by mapping the underlying assets through derivatives. The products launched in Europe are essentially not securities trading, but over-the-counter financial contracts issued under the EU MiFID II framework. In other words, what users are purchasing is not "stock tokens", but a digital certificate that tracks specific stock price fluctuations. This legal design allows Robinhood to bypass complex securities compliance barriers and opens up overseas markets with minimal resistance.
• Technical Architecture and "Walled Garden":

• Layer Chain Selection: In terms of technical selection, Robinhood utilizes Arbitrum as its underlying network. Compared to the Ethereum mainnet, it offers higher performance, lower transaction costs, while inheriting the mature security of Ethereum. With a Gas cost of just a few dollars, it has completed the deployment of hundreds of tokens, clearly demonstrating its efficiency advantage.
  • Permission Control: However, this system is not an open DeFi paradise. The smart contracts have strict whitelist rules written internally, and all transactions require verification to ensure that the recipient has passed Robinhood's compliance certification. In other words, this is a typical "controlled zone" where users must complete KYC to enter, and the ecosystem is tightly controlled by Robinhood itself, which sacrifices interoperability with the external DeFi world.
• Future Ambition: What is even more intriguing is Robinhood's next move. The company is brewing its own Layer 2 network—Robinhood Chain based on the Arbitrum technology stack. This move is not just about reducing costs but sends a stronger signal: Robinhood wants to take control of the underlying technology to provide a tailored environment for its future large-scale RWA strategy.

• Strategic Depth and Vision: Understanding this model merely as a "closed garden" actually underestimates Robinhood's ambitions. CEO Vlad Tenev has repeatedly mentioned that the company's vision is "Capital as a Service." Tokenization is not just a gimmick, but an important tool for Robinhood to advance financial democratization, especially targeting those illiquid assets that have long been locked in the hands of high-net-worth individuals. Imagine if ordinary users could indirectly gain equity exposure to non-listed giants like SpaceX or OpenAI through derivative tokens; the power structure of the capital markets would be reshuffled.

Of course, reality is not entirely optimistic. Top private equity firms are often well-funded, making it almost impossible to actively "invite retail investors in." This means that tokenization schemes must bypass traditional issuance logic to reach ordinary investors. However, this model also hides risks: after launching OpenAI-related tokens, Robinhood immediately issued a statement clarifying that it was not involved, which also exposes a problem — there may be a huge gap in information transparency and investor understanding in derivative models.

Compared to other platforms, Robinhood's approach is different from traditional on-chain securities attempts (such as Synthetix's synthetic assets or Polymarket's prediction markets). It does not emphasize the complete openness of DeFi, but instead aims to capture the market through a combination of "strong compliance + high user experience." Its logic resembles an extension of a fintech platform rather than a complete on-chain fundamentalism.

If regulation turns a blind eye or even gradually accepts it, Robinhood will take the lead in establishing a super gateway covering retail investors, compliance, and RWA, and may even become the first stop for retail investors in Europe and America to enter tokenized finance.

One-sentence comment: Robinhood's attempt is not simply about "putting stocks on the blockchain," but rather an experiment in reshaping the traditional derivatives distribution model using cryptographic technology. It uses blockchain to enhance product delivery and compliance efficiency, with goals that far exceed the crypto sphere itself, truly aiming at a redefinition of the entire global financial system.

2. xStocks: Asset-backed Tokens + B2B2C + Complete Composability

• Legal Kernel and Compliance Pathway: In the tokenized stock space, xStocks has a unique positioning. Unlike some derivative platforms that only provide price mapping, it follows the path of complete mapping of physical assets. The entire architecture is built by the Swiss compliance team Backed Finance, adhering to the Swiss DLT legal framework, and hosting real stocks through a special purpose vehicle (SPV) established in Liechtenstein. This SPV is responsible for only one thing—holding the underlying assets themselves, and is legally completely isolated from the issuing entity and trading platform. In other words, even if the operator encounters issues, the rights of investors can still be independently protected. What investors receive is not a "contract paper," but a priority secured debt certificate corresponding to the real assets.
• Technical Architecture and Transparency:

• Underlying Chain Selection: On a technical level, xStocks issues tokens on Solana. The reasons are not hard to understand: high throughput, low cost, and extremely low confirmation delays make these features inherently suitable for frequent trading and DeFi combinations.
• Cornerstone of Transparency: In order to ensure that investors trust that its tokens are indeed supported by real reserves, xStocks introduces Chainlink's Proof of Reserves, allowing anyone to verify the reserve status on-chain at any time, which adds an extra layer of transparency endorsement to its "asset tokens."
• Open Contracts: On the other hand, as a standard SPL token, the xStocks token can circulate freely on Solana, easily integrating with native DeFi protocols such as Jupiter and Kamino, and possesses full composability.

• Strategic Depth and Vision: From a commercial path perspective, xStocks is not a closed loop directly targeting the C-end, but rather adopts a B2B2C distribution logic. The token redemption in the primary market is completed by Backed Finance targeting institutions, while trading in the secondary market relies on exchanges such as Kraken and Bybit. This way, it can attract professional institutions and reach a large number of retail investors through mature exchanges, ultimately releasing liquidity in an open ecosystem. Data has already proven the potential of this model: after gaining support from mainstream platforms, its single-day trading volume once exceeded $6 million. The longer-term vision is to develop this model into "tokenization as a service," providing standardized asset on-chain tools for financial institutions.

The approach of xStocks contrasts sharply with that of Robinhood. Robinhood's model resembles "the digitization of financial derivatives," relying on a controlled whitelist mechanism to lock in users; whereas xStocks actually puts real assets on the blockchain and maintains full interoperability with DeFi. This means it is inherently more aligned with the Web3 narrative of "open Legos," but it also has to bear the regulatory gray areas and risk spillover issues associated with an open environment.

Whether this model can succeed depends on two points:

1. Can deep liquidity be truly established. If tokenized assets are only issued in one direction, lacking sufficient counterparties and arbitrage mechanisms, then their market significance will be very limited.

2. Can long-term regulatory tolerance be achieved? The current SPV structure has legally achieved isolation, but the recognition of "tokenized securities" has not yet been unified among countries. Once regulatory conflicts arise, the ecosystem may experience significant fluctuations.

It is worth noting that the model of xStocks may inspire broader application scenarios. For example, it provides a replicable paradigm for "asset-backed tokens" beyond stablecoins, especially suitable for the tokenization of bonds, ETFs, and even art funds. Unlike the "controlled tokens" launched by a single exchange, it emphasizes the free combinability with DeFi modules, which injects new sources of liquidity into the entire crypto ecosystem.

One-sentence comment: xStocks is not reshaping the exchange but providing a new asset layer for DeFi. It attempts to bring the true and transparent value of traditional finance onto the blockchain and shape a new market ecology through open combinations. If Robinhood's direction is "business on-chain," then xStocks' logic is more like "assets on-chain."

3. StableStocks: Agency Holdings + B2C + In-Platform Combination Mechanism

• Legal Core: StableStocks adopts a unique "proxy holding + beneficiary" model. The platform establishes a dedicated SPV and collaborates with licensed securities firms (e.g., HABIT TRADE in Australia) to open institutional accounts, actually purchasing and custodizing stocks. Ultimately, the investors do not hold stocks directly but enjoy corresponding rights as beneficiaries. This arrangement allows StableStocks to operate relying on the compliance system of its partners without directly holding a complete brokerage license, balancing compliance and flexibility.
• Business Model: StableStocks is positioned as a typical B2C model, packaging deposits, trading, custody, and derivative plays all within its own platform. Unlike some B2B2C solutions, StableStocks prefers to directly service end users. In terms of ecosystem, it is closely tied to Binance and BNB Chain.
• Composability: The core differentiator of StableStocks is that it does not pursue complete open external composability, but instead builds an internally composable closed-loop system. The equity tokens that users hold can be further deposited into the platform's "StableVault," and then minted into yield-bearing stStock. This is a logic of a "walled financial playground"—the gameplay has limitations, but the experience is more controllable.

From a more systematic perspective, the model link of StableStocks can be broken down into five key links:

1. Stock Acquisition and Sources
   • Real stocks from licensed brokers:

• Australia Habit Trade (holding 70%) is responsible for the US stock channel

• Traditional banks (such as ANZ, DBS) provide fiat currency settlement and funding channel support.
  • The stock source is real, not a synthetic asset.

2. Settlement and Custody Mechanism
   • Stocks are uniformly custodied by SPV, isolating risks;

• Collaborate with the clearing house of NASDAQ to ensure compliance and stability in the circulation of underlying assets.
  • Ensure a 1:1 correspondence to reduce the counterparty default risk.

3. Tokenization and On-Chain Issuance
   • StableStocks will custodian stocks mapped into stock tokens;
   • Token issuance operates on the BNB Chain, supported by the Binance wallet and trading ecosystem;
   • Each token is backed by actual assets, belonging to the standard asset-backed token.
4. Stablecoins and Entry into the Crypto World
   • Integrated stablecoin channel with Coinbase, allowing users to directly exchange stock tokens for USDC;

• Resolved the barriers to fund conversion between fiat currency users and cryptocurrency users.

5. User-side Usage and Expansion
   • Stock tokens can be held and traded in the Binance wallet;

• In addition to the investment itself, it can also be embedded in the DeFi modules built by StableStocks (staking, yield enhancement).
  • User experience is closer to a combination of "Robinhood + DeFi-lite".

StableStocks takes a "middle road"—not as closed as Robinhood, which only offers trading, nor as fully open as xStocks, which integrates with the entire DeFi Lego. Instead, it builds a semi-open system. For traditional financial investors, it provides a new way to enter the on-chain market; for crypto users, it offers a convenient entry point to blue-chip stocks like Tesla, Apple, and McDonald's. Its core selling point is:

• Compliance: Borrowing the licensed brokerage system;
• Stable: Clearing House + SPV Custody;
• Easy to use: B2C closed loop;
• Innovation: Internally composable DeFi-lite.

One-sentence review: StableStocks is a middle ground that seeks to find a balance between the closed convenience of Robinhood and the open complexity of xStocks. It bets that what users want is a "DeFi-lite" experience - one that allows them to enjoy the enhanced returns of DeFi without having to bear all the risks and complexities of open DeFi.

Triangle Comparison: StableStocks vs xStocks vs Robinhood

IV. Insurmountable Structural Barriers

Despite the varying models, all stock tokenization schemes at this stage face several common structural obstacles that are difficult to resolve in the short term:

• The contradiction between value proposition and actual liquidity: Currently, all platforms face a classic "which came first, the chicken or the egg" dilemma. On one hand, for users who can conveniently trade US stocks, the value proposition of tokenized stocks is unclear. On-chain trading not only fails to provide better rates but also incurs higher trading slippage due to a lack of liquidity, resulting in an experience far inferior to that of mature internet brokers. On the other hand, it is precisely because of the lack of a sufficiently strong value proposition to attract large-scale users and capital that on-chain liquidity has been slow to deepen, creating a self-reinforcing negative feedback loop: without users, there is no liquidity; without liquidity, users are even less attracted. Unless it can provide existing users with irreplaceable new utility, it is difficult to break this deadlock.
• Structural Defects: The current tokenized stocks are essentially just "digital twins" of real stocks, but this replication has fundamental flaws. First, the commitment to 24/7 trading is largely illusory. When the underlying stock markets (like NASDAQ) are closed, on-chain market makers cannot hedge their risk exposure and can only mitigate risks by drastically widening spreads or directly withdrawing liquidity, which significantly undermines the effectiveness of weekend and after-hours trading. Second, these tokens strip away complete shareholder rights. Users receive a claim on the economic value of the stock, but not the full ownership that includes voting rights.
• Centralization Risks Under the "Decentralized" Cloak: Although operating on a decentralized blockchain, the trust foundation of these RWA models is highly concentrated in a series of off-chain entities. Whether it's the SPV issuing tokens, third-party banks responsible for asset custody, cooperative brokers executing transactions, or bridges connecting fiat currency with the crypto world, each link is a potential point of centralized failure. Once these centralized entities experience operational failures, legal disputes, or even bankruptcy, the tokens on the chain may instantly lose their value support.
• The Potential Paradox of DeFi Composability: For open models like xStocks, the ultimate vision is to become the "money Lego" of the DeFi world. However, this composability faces a severe paradox. A DeFi lending protocol, when considering whether to accept TSLAx as collateral, must not only assess the price volatility risk of Tesla stock itself but also evaluate the platform risk brought by its tokenized structure—namely, the risk of default by the issuer Backed Finance or its custodian. This “asset risk + platform risk” dual risk exposure makes DeFi protocols extremely cautious when integrating these RWA assets. Moreover, the ambiguous legal status of these tokens also deters DeFi protocols, fearing regulatory crackdowns for “illegally operating securities business.” This explains why, to date, no mainstream DeFi protocol has taken them as core collateral, and the path to true composability remains long.

Conclusion: Which of the three models can win the future?

The outcome of this competition may not depend on whose legal framework is more clever, but rather on who can first create irreplaceable value for users.

• Robinhood's path to victory lies in scaling. If its goal is simply to offer a familiar asset class in a novel form to tens of millions of existing users, then it is likely to win in terms of user numbers.
• The path to victory for xStocks lies in ecologization. If the narrative of "financial Lego" holds true, there will be a large number of DeFi protocols in the future that use it as core collateral or underlying assets to build on-chain options, lending, and structured products, then it will win the future of Web3.
• The victory path of StableStocks lies in experiential. If it can prove that "DeFi-lite" is a real existing market by providing a one-stop, low-threshold "trading + yield" experience, it may open up a blue ocean between mainstream users and hardcore DeFi users.

Returning to the source, the so-called "on-chain US stocks" is still in the experimental phase, currently more like a financial packaging under regulatory gaps rather than a mature market tool. The nodes that can truly change the game rules are not about who first runs a proof of concept, but about who can deliver a complete trading system that integrates spot trading, short selling, leverage, and risk management on-chain. Only when the financial playability and functionality of on-chain stocks genuinely match or even surpass those of traditional Wall Street brokerages can this transformation be considered to have entered a substantial phase. As it stands, those pioneers have only just begun to put the wheels on the track, and the real race has yet to begin.

This article/blog is for reference only and represents the author's personal views, and does not represent the position of Movemaker. This article does not intend to provide: (i) investment advice or recommendations; (ii) offers or solicitations to buy, sell, or hold digital assets; or (iii) financial, accounting, legal, or tax advice. Holding digital assets, including stablecoins and NFTs, carries a high risk, with significant price volatility, and they may even become worthless. You should carefully consider whether trading or holding digital assets is suitable for you based on your financial situation. If you have specific situational questions, please consult your legal, tax, or investment advisor. The information provided in this article (including market data and statistics, if any) is for general reference only. Reasonable care has been taken in compiling this data and charts, but no responsibility is accepted for any factual inaccuracies or omissions expressed therein.