Tokenization of US Stocks: Opportunities and Challenges in Web3 Financial Innovation

The tokenization of U.S. stocks has recently become a hot topic, with multiple platforms successively launching related products, attracting widespread follow. This phenomenon has both historical roots and is invigorated by regulatory and technological advancements. It drops the trading threshold, supports all-day trading, but also faces some challenges.

Tokenization of stocks is essentially a price certificate of on-chain smart contracts, where holders cannot enjoy traditional shareholder rights and can only obtain economic benefits. Its main differences from traditional stocks are the lack of shareholder identity, the attribute of price mapping only, and higher liquidity with lower thresholds.

Currently, the tokenization of stocks lacks a完善的 arbitrage mechanism, which may lead to a disconnection between on-chain prices and off-chain stock prices. Investors need to be wary of insufficient liquidity and slippage risks. In terms of compliance, issuers need to obtain relevant financial licenses, but there is still uncertainty in regulations outside the United States.

The tokenization of unlisted stocks carries greater risks, including legal compliance and governance conflicts, information asymmetry, and pricing opacity. Investors find it difficult to verify the authenticity and quantity of the pledged assets, making it challenging to protect their rights.

When it comes to choosing a blockchain for issuance, different platforms have different considerations. Solana has become the preferred choice for some platforms due to its large user base, fast transaction speeds, and mature DeFi ecosystem. Arbitrum, on the other hand, may be adopted for its strong contract customization capabilities and long-term partnerships with certain platforms.

In the long run, the tokenization of US stocks has potential, similar to the transformation of stocks from offline to online. Its advantages include higher transparency, better regulation, improved risk control, and technological advancements. However, there are still speculative components at the current stage, and one must be cautious of the risks of manipulation.

Apart from stocks, copyright assets are considered another potential direction for tokenization. Music, film and television, books, and website advertising revenue sharing may all become objects of tokenization in the future.

Overall, the tokenization of US stocks, as a branch of real-world assets (RWA), is connecting Web2 with Web3, dropping the barriers and costs of trading. Despite facing numerous challenges, in the long run, it is expected to reshape the finance and content industries. However, this process requires the joint maturation of technology, regulation, and the market.