Author: Foxi
Translated by: TechFlow
Today, major trading platforms like Kraken and Robinhood have launched on-chain stock trading services, allowing investors to buy and sell tokens representing real stocks. This service enables investors to trade popular US stocks (such as Apple, Tesla, NVIDIA, etc.) 24 hours a day, even outside normal market trading hours.
How does this mechanism incorporate KYC considerations?
Will investors prefer cryptocurrency-based stock trading over traditional brokers?
Why do I consider this a positive case?
Mechanism Analysis
Step-by-step breakdown
1. When purchasing a tokenized Apple stock through Kraken's xStocks, you are not buying a derivative or futures contract. Instead, Kraken's partner Backed Finance purchases and custodies a real Apple stock, storing it in a regulated custodian. Subsequently, a corresponding token is issued on the Solana blockchain as a digital representation of this stock.
2. On-chain stocks ≠ cryptocurrency. On-chain stocks introduce interesting arbitrage opportunities. During non-trading hours when the NYSE is closed but blockchain trading remains open, token prices may slightly deviate from the last stock price due to market sentiment and trading activity. Arbitrageurs can profit from price differences by buying and selling these tokens and redeeming through the issuer, thereby bringing the price back into balance. However, investors should be particularly cautious about risks when purchasing on-chain stocks during non-trading hours.
3. It's important to emphasize that under this structure, token holders do not enjoy traditional shareholder rights (such as voting rights) - these rights are retained by the custodian. Investors are purchasing economic exposure to stock performance, not actual shareholder status. This trade-off enables blockchain-based trading while maintaining compliance.
24/7 Continuous Trading: The Biggest Highlight of On-Chain Stocks
The most obvious advantage of tokenized stocks is continuous trading. Unlike traditional exchanges that are open only about 6.5 hours on workdays, blockchain-based tokens can be traded 24/7. Kraken's xStocks enables 24/7 trading, while Robinhood currently offers 24/5 trading and plans to expand to round-the-clock trading after launching its dedicated Arbitrum Layer 2.
This continuous availability creates unique market dynamics. When major news breaks outside traditional trading hours - such as earnings reports, geopolitical events, or company-specific dynamics - your tokenized stocks can immediately reflect market sentiment. Token prices become real-time sentiment indicators, even providing price discovery during traditional market closures, something traditional markets cannot match.
[The translation continues in the same professional and accurate manner for the entire text, maintaining the specified translations for specific terms.]Next Steps
From an investment perspective, the future of tokenized stocks largely depends on user adoption rates and the evolution of the regulatory environment. In an optimistic scenario, tokenized stocks could become the "killer app" of the crypto industry, expanding the user base exponentially and bringing hundreds of millions of real-world assets on-chain. This trend would be even more pronounced if non-KYC models could meet the massive demand for US stocks.
In the long term, large-scale migration of stock trading (and even other asset trading) to the blockchain track will become a trend. This not only enhances efficiency but also further lowers entry barriers and expands market participation.
Short-term Investment Opportunities: Bullish on the Following Areas
Stablecoin
Real World Assets (RWA)
ETH/Solana as Settlement Layers
US Fintech Stocks: Such as US fintech companies like Robinhood ($HOOD), SoFi ($SOFI), and any investment opportunities related to Kraken (such as Kraken's planned IPO in 2026)
