Tokenized equities and the on-chain capital markets stack

Tokenized equities have moved, in roughly eighteen months, from a regulatory talking point to a category with measurable issuance, measurable flow, and a growing set of venues willing to make markets in them. The thesis underwriting the category is straightforward: public equities are the largest, most liquid, and most familiar asset class in the world, and the rails they trade on — T+1 settlement, fragmented broker-dealer custody, opaque payment for order flow — are objectively worse than what a well-designed on-chain venue can offer. Closing that gap is a multi-year project. This piece is an attempt to draw the current map.

We focus on three questions. First, what does the issuer stack actually look like in 2026, and which design choices have proven durable. Second, where is the liquidity — venue by venue — and what does the order flow tell us about who is using these instruments. Third, what are the structural problems that have not yet been solved, and which of them are blocking the next leg of growth.

1. The issuer stack: three models, converging slowly

The tokenized equity supply we observe today comes from three structurally distinct issuance models. Confusing them is the most common mistake in the discourse, so it's worth being precise.

The custodial wrapper. A licensed entity (typically a Swiss SPV, a Liechtenstein issuer, or a Bermuda-domiciled vehicle) holds the underlying equity 1:1 in segregated custody and mints a token that confers a contractual claim against that custodian. The token is not the security; it is a derivative instrument that tracks the security through a redemption mechanism. xStocks, Backed, Dinari, and the Ondo equity line all sit in this bucket. The mechanics differ — Dinari uses a Reg D / Reg S structure with daily mint windows; Backed runs continuous primary issuance against a Swiss prospectus — but the load-bearing question is the same: do you trust the wrapper, and what does redemption look like under stress.

The native digital security. A regulator-approved security that is only issued and transferred on-chain, with no off-chain twin. This is the cleanest model and also the rarest, because almost no jurisdiction has finished the rulemaking required to make secondary trading work. The Singapore VCC frameworks, the Luxembourg DLT pilot regime, and the FINMA-approved Swiss DLT exchanges are the live examples. Aggregate float here is still under $4B by our estimate — a rounding error against the wrapper category — but the liquidity it does have is structurally stickier because the cap table is the chain.

The synthetic. A perpetual, a CFD-like instrument, or a fully-collateralized synthetic minted against an oracle price. No claim on the underlying, no redemption. Most pre-2024 "tokenized stock" volume was synthetic; the category has shrunk substantially after several high-profile oracle incidents and the post-2024 regulatory tightening on synthetic exposure to US equities. Synthetics will continue to exist where wrappers can't reach (off-hours trading, fractional exposure to illiquid names) but they are no longer the default.

The convergence we expect — and which the data already hints at — is wrappers gradually adopting more of the native-security legal posture as jurisdictions mature, while synthetics retreat into a narrower role of off-hours liquidity and exotic exposure. The long-run equilibrium is probably 70/25/5 wrapper / native / synthetic by float, but with native carrying disproportionate institutional flow.

2. Liquidity: where the volume actually is

Aggregate on-chain equity ADV crossed $400M for the first time in March 2026, with the trailing thirty-day figure now hovering between $380M and $520M depending on the day. That is small against the ~$600B daily US equity tape, but it is also roughly 15× the figure from the same month a year prior. The slope matters more than the level.

Liquidity is concentrated, in a way that should be familiar to anyone who has watched a new asset class develop:

• Top 10 tickers account for ~78% of on-chain equity ADV. NVDA, TSLA, AAPL, MSFT, and a handful of high-beta names dominate. The long tail past the S&P 100 is essentially un-quoted on most venues.
• Top 3 venues account for ~64% of ADV. Concentration is higher than in early-stage spot crypto markets, because the wrapper model creates natural focal points — a venue that has direct primary issuance access to a wrapper has a structural quoting advantage over one that doesn't.
• Maker concentration is extreme. We estimate fewer than fifteen distinct entities are providing more than 90% of the two-sided liquidity in tokenized equities across all chains. This is the single most important fragility in the category today.

By chain, the distribution as of the most recent month is approximately: Solana ~46%, Ethereum L1 ~21%, Base ~12%, TON ~8%, other (Arbitrum, Avalanche, Sui, Aptos, miscellaneous) ~13%. TON's share is small but growing fastest in percentage terms, driven primarily by retail flow from messenger-native wallets — a distribution channel none of the EVM chains have a real answer to.

A useful framing: the EVM venues are winning the institutional desk that wants to print a block, and the consumer-chain venues (TON foremost, with Solana increasingly leaning that way) are winning the retail user who wants to buy ten dollars of NVDA from a chat interface. These are different products being sold to different customers under the same umbrella term, and the venues that try to do both at once tend to do neither well.

3. Settlement assumptions and the redemption gap

The single most under-discussed question in tokenized equities is what happens during a redemption queue. Every wrapper ships with a documented redemption mechanism — a daily window, a T+1 cash settlement, a primary-market authorized participant model — and almost none of those mechanisms have been stress-tested at meaningful scale.

The relevant historical analog is the ETF authorized-participant arbitrage. ETFs hold tightly to NAV because APs can profitably arbitrage any deviation by creating or redeeming creation units intra-day against the underlying basket. Tokenized equity wrappers attempt to replicate this, but with three structural disadvantages:

1. Redemption is typically daily, not intra-day. A wrapper token that drifts 80 bps below its underlying at 2pm cannot be arbitraged back to par until the next mint/redeem window. The arbitrage is therefore exposed to overnight (or over-weekend) underlying risk, which the AP must price in. This widens the steady-state basis, and during volatility events it widens substantially.

2. The AP set is small. Two or three entities per wrapper, typically. Compare this to the dozens of APs active in major ETFs. Concentration of the redemption channel is an underappreciated source of basis risk.

3. The on-chain venue does not see the off-chain queue. When primary issuance is gated for compliance reasons (KYC review, jurisdictional checks), the on-chain price has to absorb the full imbalance. The result is exactly what we have seen during three or four episodes in the past year: the wrapper trades 200–600 bps off NAV for a session, then snaps back when the redemption window opens.

This is not a fatal flaw. It is a category-typical friction that will compress as redemption windows shorten (we expect intra-day redemption to be standard within 18–24 months for the top wrappers) and as the AP set expands. But it is the right thing to look at when comparing wrappers — a wrapper with a 4-hour redemption cycle and five active APs is a structurally better product than a wrapper with a daily window and two APs, regardless of which one has more TVL today.

4. The market microstructure problem

Tokenized equities have inherited a market microstructure that was built for crypto, and that fit is uneven.

AMMs work poorly for equities. Constant-product and concentrated-liquidity AMMs price an asset relative to a numéraire under the assumption that price discovery happens on the AMM. Tokenized equities have their price discovery happen on the underlying exchange — NYSE, Nasdaq — and the on-chain venue is a price-taker. An LP in a tokenized-equity AMM is structurally short volatility against a price they don't set, which is the textbook recipe for adverse selection. The funds running these LPs know this and price it in; spreads on AMM-quoted tokenized equities are typically 2–4× the spreads on RFQ-quoted ones.

RFQ is winning, slowly. The venues that have grown fastest in 2025–2026 are RFQ-style: a market maker quotes a two-sided price on demand, the user accepts or doesn't, settlement happens on-chain. This matches how institutional equity trading already works and removes the adverse-selection problem on the maker side. The cost is that liquidity is no longer composable in the DeFi sense — you cannot route a complex multi-leg trade through an RFQ venue the way you can through an AMM.

Aggregation is the bridge. The interesting design space is venues that aggregate AMM and RFQ liquidity behind a single quote, falling back to whichever is tighter at the moment of the trade. This is not novel — it's how Hashflow and 1inch Fusion have worked for years on crypto pairs — but it is being adapted for the tokenized-equity case in a way that materially tightens effective spreads for retail flow. We expect aggregated execution to be the dominant retail flow path within twelve months.

5. The four structural gaps

What is not solved, and which gaps actually matter:

1. Cross-venue clearing. A user who buys NVDA-on-Solana and wants to sell it on TON cannot, today, do that without round-tripping through a wrapper redemption. The bridges that exist are slow, fragmented, and concentrate risk in a small number of bridge operators. Until cross-venue clearing exists, "tokenized equities on TON" and "tokenized equities on Solana" are functionally separate markets that share a ticker.

2. Corporate actions. Splits, dividends, mergers, spin-offs, tender offers, proxy votes. Wrapper issuers have varying — and in some cases informal — policies on how these flow through to token holders. A 4-for-1 split is easy. A spin-off where the parent issues shares of a private subsidiary is genuinely hard and has not been handled cleanly by any wrapper at scale yet. This is the next category of incident risk.

3. Tax treatment. The tax treatment of a tokenized equity is unsettled in most jurisdictions, and where it is settled, it is often unfavorable (treated as a derivative rather than as the underlying equity, which creates short-term capital gains issues for long-term holders). This is a quiet but real drag on adoption from sophisticated users.

4. Off-hours price formation. The underlying market is closed sixteen hours a day plus weekends. On-chain venues quote 24/7. Who sets the price during off-hours, and how it reconciles to the open, is currently handled by a mixture of futures-implied marks, foreign-listing arbitrage (Frankfurt, Tokyo for cross-listed names), and pure market-maker discretion. None of these is robust. A real off-hours price formation mechanism — probably built around regulated 24/5 venues that already exist for futures — is one of the more interesting open problems.

6. What we are watching

We track this category closely because Quantum Club ships tokenized equities to retail users, and the venues we route through directly determine the product experience. The metrics that update our priors fastest:

• Basis stability under stress. Specifically, the magnitude and duration of NAV deviations during the next equity volatility event of >3% intraday move. The 2024–2025 episodes were instructive; the next one will be more so.
• AP-set expansion. Each new authorized participant onboarded to a major wrapper is a structural improvement in liquidity quality, even if it doesn't show up in headline TVL.
• Native-security issuance. New issuers choosing the native-security path over the wrapper path is the leading indicator for the long-run market structure. We watch the FINMA, MAS, and ADGM pipelines closely.
• Aggregation share of retail flow. The crossover point at which aggregated RFQ+AMM execution overtakes pure AMM execution for sub-$10K trades is, in our view, the inflection point at which retail tokenized equities become a serious product rather than a curiosity.

Tokenized equities are not a finished category. They are roughly where on-chain spot crypto was in late 2018 — past the experimental phase, before the structural maturity that makes them safe to recommend to people who do not already know what a wrapper is. The next eighteen months will be the period in which that maturity either arrives or doesn't. We think it arrives, and we are building the consumer surface for the world in which it does.