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"Tokenized real-world assets (or RWAs) are one of the leading narratives in crypto this cycle. But there’s one type of RWA that’s gaining serious momentum - tokenized stocks. That’s because tokenized stocks allow you to trade shares of companies like Nvidia, JPMorgan, Walmart, and hundreds more directly on the blockchain.
This means they’re accessible around the world, 24 hours a day, 7 days a week. In many cases, these stocks can be accessed without KYC requirements and what’s more is they can be held securely in your own crypto wallet. This gives tokenized stocks a number of advantages over their traditional counterparts - but there are some disadvantages too.
That’s why in today’s video, we cover everything you need to know about tokenized stocks, including what they are and where to find them, as well as the risks that you need to consider."
~ Coin Bureau
Tokenized real-world assets (RWAs), specifically tokenized stocks, are gaining momentum as crypto tokens that represent actual stocks from the traditional market. These tokens allow you to gain exposure to companies like Apple or Tesla on the blockchain without a traditional broker. There are two main types of tokenized stocks: equity-backed, which are considered the gold standard and are backed by real shares held by a custodian, and synthetic, which are less popular as they track prices using smart contracts and oracles without being backed by real assets. The process for creating an equity-backed token involves an issuer getting licensed, purchasing shares, and having them held by a regulated custodian, who ensures a 1:1 ratio with the minted tokens on the blockchain.
Tokenized stocks offer several advantages over traditional stocks, including 24/7 trading, no geographical restrictions, fractional ownership, and faster settlement times. They can be traded on both centralized and decentralized exchanges, as well as directly from a crypto wallet, and can be used in DeFi protocols for lending, borrowing, and providing liquidity. However, they also come with risks, such as regulatory uncertainty, the lack of voting rights for holders, and counterparty risk. Additionally, they currently suffer from low liquidity, which can lead to price fluctuations and potential decoupling from the underlying real-world stock.
0:00 Intro
1:03 What Are Tokenized Stocks?
6:00 Finding Tokenized Stocks On Centralised Exchanges
8:56 Finding Tokenized Stocks On Decentralised Exchanges
12:32 What Can You Do With Your Tokenized Stocks?
15:12 Potential Risks
Source - Coin Bureau YouTube: https://www.youtube.com/watch?v=Fi87JK7ZeX0
Disclaimer: This video is provided for informational purposes only, and not offered or intended to be used as legal, tax, investment, financial, or any other advice.
