The New Wave of Crypto-Stock Investing: How xStocks Bridges Traditional Finance and the Crypto World

In the newly launched xStocks section of the encryption exchange Gate, traditional stocks like Apple and Tesla have quietly transformed into strings of on-chain code. This new model, called “coin stock investment,” is breaking the century-old trading rules of Wall Street—by tokenizing traditional securities through blockchain, enabling 7×24 global trading, low-threshold fractional share ownership, and the reuse of DeFi scenarios, allowing global users to buy any amount of stocks anytime, anywhere.

Coin-Stock Investment: Breaking Through Traditional Finance on the Chain

Coin-Stock Investment (Tokenized Stock Investment) essentially converts traditional financial assets into blockchain tokens. Taking xStocks as an example, its core product is issued by the Swiss compliant platform Backed Finance, converting over 60 stocks including Apple and Nvidia into Solana On-chain SPL tokens (such as TSLAx representing Tesla stock) enable on-chain circulation.

Users do not need a stock brokerage account to hold and trade these tokenized stocks through the encryption exchange, enjoying three breakthrough experiences:

• Time liberalization: Breaking the trading time limit of the traditional stock market from 9:30 to 16:00, trading is available all year round without breaks.
• Asset democratization: Supports fractional purchases of 0.01 shares, lowering the investment threshold to 1 dollar.
• Scene integration: Tokens can be transferred to wallets to participate in DeFi activities, such as collateralized lending or liquidity mining, with annual returns up to 3 times that of traditional brokerage accounts.

The Precise Operating Logic of xStocks

The operation of xStocks relies on a compliance technology architecture that connects TradFi and blockchain, with key links intricately interconnected:

1. Asset Backing: Backed acquires physical stocks through Interactive Brokers and deposits them into a segregated account at Clearstream, Europe’s leading custodian, ensuring that the assets are transparent and auditable.
2. On-chain mapping: After the stock is deposited, Solana smart contracts automatically mint corresponding tokens (e.g., AAPLx) at a 1:1 ratio, using the ERC-1400 standard to ensure compliance.
3. Multi-level circulation: Tokens reach global users through exchanges like Gate and can also earn interest in DeFi protocols like Raydium.
4. Redemption closed loop: After users submit authentication, they can destroy on-chain tokens to retrieve stocks from the Clearstream traditional brokerage account, completing the exit in 1 - 3 working days.

The core innovation of this system lies in the combination of Clearstream’s asset isolation mechanism and Solana’s high concurrency performance (65,000 TPS), which not only meets the regulatory requirements for controlling underlying assets but also grants the capability for free flow of stocks on the blockchain.

Market Response and Liquidity Challenges

Since its launch on June 30, 2025, xStocks trading volume has seen explosive growth:

• On the first day, the on-chain trading volume was $1.338 million (1,225 users)
• The next day, it soared to 6.64 million dollars (with 6,565 new users).

However, liquidity shows a “star asset siphoning effect”: the three major benchmarks TSLAx, SPYx, and CRCLx account for 70% of the trading volume, while 80% of small-cap stock tokens have daily trading numbers of less than 20, with slippage as high as 5%. This exposes the contradiction between the inclusive ideal of tokenized stocks and the reality of liquidity differentiation.

Compliance Reefs and Future Evolution

The compliance design of xStocks can be described as the “art of regulatory arbitrage”:

• Based on the Swiss DLT license, requiring full collateralization of tokens
• Issuing bond-like tokens through a Jersey special purpose vehicle (SPV) to avoid stamp duty on equity transfers and custody restrictions

But this model has dual hidden dangers:

1. Incomplete rights: Token holders only receive economic benefits, without company voting rights.
2. Regulatory risks: The SEC may use “long-arm jurisdiction” to crack down on users who use VPNs across borders.

In the future, tokenized securities will expand into broader fields. Backed has partnered with Ondo Finance to launch a token for U.S. short-term treasury bonds with an annualized return of 5.3%; Robinhood is testing the waters for private equity tokenization for companies like OpenAI and SpaceX in certain areas, further opening up channels for the circulation of unlisted assets.

The century-old barrier of TradFi is being torn open. xStocks represents not only the evolution of investment tools but also the construction of a new financial paradigm that is borderless, timeless, and classless. With the RWA (Real World Asset) market surging by 48.9% in just six months, this journey of on-chain financial revolution has just begun.