Tokenized stocks

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As probably most of you I am enjoying using crypto exchanges (especially in comparison to classical equity or commodity exchanges), and Binance in particular.

I am looking forward to further development of decentralized solutions in the trading and DEX exchanges area. The only problem that I find is that it is hard to generate trading ideas for cryptocurrencies. Most of them are shitcoins and have very limited usage, and it is hard to base your trading strategy on anything other than charts and graphs, which I consider to be not a very prudent approach.

For stocks, you may have a lot of data, such as a company’s product, financials, media coverage, management, headcount, exposure to commodities, and global economy development. I would love to be able to trade stocks and to enjoy Binance API and reasonable comission plan to deal with stock-based strategies. One of the areas I think is promising is the tokenization of stocks and trading tokenized stocks. However, it seems that Binance has withdrawn all such products in 2021. Another option was FTX, but we all know what happened there.

I wonder if anyone knows if tokenized stocks are planned to be available on Binance any time soon and what was the reason for canceling them in the first place.

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Posted in Binance Reddit

1 Comments

TipTechnicali on 27. January 2024 at 11:30

Interesting question. There are some technologies that can be used to tokenize or group assets like Nested NFTs. I know Nested protocol and Unique are working on this, but I think it would need a lot of firepower to tokenize stocks and keep the machine moving.

Suppose you create a basket or tokenize 100 AAPL (Apple stocks) into a cryptocurrency called “X”. The price of X and AAPL may not move in the same direction. If X is overpriced, then the arbitrage must be closed. This is commonly done by AP (authorized participants).

Under this scenario, the AP will buy AAPL (the underlying asset) in the market and then sell X. This will drive the X price toward fair value (100 AAPL). A lot of firepower is needed for it in addition to a strong regulation to make sure that 100 AAPL are really backing 1 X.

TipTechnicali on 27. January 2024 at 11:30

Interesting question. There are some technologies that can be used to tokenize or group assets like Nested NFTs. I know Nested protocol and Unique are working on this, but I think it would need a lot of firepower to tokenize stocks and keep the machine moving.

Suppose you create a basket or tokenize 100 AAPL (Apple stocks) into a cryptocurrency called “X”. The price of X and AAPL may not move in the same direction. If X is overpriced, then the arbitrage must be closed. This is commonly done by AP (authorized participants).

Under this scenario, the AP will buy AAPL (the underlying asset) in the market and then sell X. This will drive the X price toward fair value (100 AAPL). A lot of firepower is needed for it in addition to a strong regulation to make sure that 100 AAPL are really backing 1 X.