Tokenized stocks are having another moment.

For those of you who have been around the crypto ecosystem long enough, that might sound familiar. Crypto has tried this before. Every cycle gone by has had some flavour of tokenized stocks, but none of them lasted the test of time.

But this time is indeed different. 

The earlier versions of tokenized stocks were synthetic derivatives of real-world stocks at best. They offered economic exposure to stocks in the sense that they tracked the price of the stocks, but came with very little in the form of legal protections, security guarantees, real world synergies, and frankly even onchain features – tokenized stocks years ago used to be just single-chain tokens that on paper were pegged to the value of stocks, and a bunch of crypto native users collectively agreed they had value. It’s not surprising that those versions of tokenized stocks did not stick around long term.

But now the landscape has changed entirely, thanks to the great work done by teams like Ondo, xStocks, Backpack, Robinhood and many others. Modern tokenized stocks that we have today are comprehensive in their offering:

• The legal foundation is much stronger – today's tokenized stocks are being launched within established regulatory frameworks rather than operating in legal gray areas. That gives investors greater confidence that these assets are built to last.

• The infrastructure around tokenizing stocks has matured – it comes with better security guarantees for holders. There’s 1:1 collateral backing protected by guardrails, verifiable proof of reserves, rebasing mechanisms to ensure stable exposure, and many other things that users don’t see but that makes what they’re holding a legitimate asset worth holding.

• The supply chain of bringing stocks onchain is now well established – we’re getting day 1 access to some of the most hyped IPOs in the world of finance - unlocking access to some of the most in-demand assets in the world.

• Tokenized stocks are not isolated to single blockchains – they come with built-in technology that makes them compatible with multi-chain expansion, so they live on all blockchains with an ecosystem of investors that have an appetite for stock exposure.

The cold start problem of tokenizing stocks is solved and this time it has escaped the threshold of acceptance in different ways, like regulatory, legal protections, adoption onchain, that it feels like this time is different and tokenized stocks are here to stay.

The next step is distributing these tokenized stocks to every trading venue in the blockchain ecosystem, so every investor can access them easily.

Apps, wallets, trading platforms, these tokenized stocks need to be made available across all of them to kickstart the next leg of the real world asset adoption supercycle and that’s where LI.FI comes in.

There are very few protocols in crypto better positioned to solve this distribution problem than LI.FI.

LI.FI is the universal liquidity layer trusted by 1000+ enterprises to unlock unified market access to digital assets. This description of LI.FI itself perfectly encapsulates the two ways in which LI.FI helps tokenized stocks  scale in distribution:

• Universal liquidity aggregation and orchestration – LI.FI aggregates and orchestrates liquidity across 40+ DEXs, DEX aggregators, and bridges, these include onchain liquidity pools, intent-based protocols, and individual market makers. This allows LI.FI to source liquidity from different protocols and offer comprehensive support for tokenized stocks from all the different issuers. It compares quotes from protocols and venues in real time, routes orders across the chains where tokenized stocks are live, and finds the best available execution path for users. This means LI.FI’s distribution partners (or their users) get access to all tokenized stocks from different issuers, as well as the best liquidity and price execution across all of them.

• LI.FI is integrated across the leading apps, wallets, and trading venues – This is where LI.FI materially expands the distribution of tokenized stocks. Because LI.FI is trusted by enterprise partners in their routing, tokenized stocks can become available inside many more user-facing products without each app needing to build direct integrations with each issuer. Wallets, exchanges, DeFi apps, and fintech platforms that already use LI.FI can surface all the different tokenized stocks routing to their users through the same LI.FI integration that they’re already building on.

• Access to tokenized stocks from all major issuers – LI.FI is designed to support tokenized stocks from every major issuer. Today that includes Ondo, xStocks, Backpack, and Robinhood. As new issuers such as Coinbase and Binance bring tokenized stocks to market, they can be accessed via the same LI.FI integration rather than requiring every application to integrate an entirely new provider. Moreover, LI.FI's integration ensures integrators get day 1 access to all the listed tokenized stocks as we work closely with all the issuers in ensuring support for these assets from the moment they start trading onchain.

• Best price execution for tokenized stocks – Having access to tokneized stocks via all major issuers has the added benefit of routing the trade for a specific asset through the token with the best liquidity at any given point of time. This allows LI.FI integrators to ensure that not only do their users get access to tokenized stocks, they are also able to trade them with the best price execution.

At LI.FI, we believe the next phase of growth for real-world assets will be driven by distribution: making these assets accessible across every corner of the industry and available to users wherever they already are.

We’re excited to be working with the leading issuers of tokenized stocks as their key distribution partners. 

If you're building the future of real-world assets on blockchain rails—whether as a consumer application, wallet, trading platform, or asset issuer—and want to make tokenized assets accessible to users wherever they are, come talk to us.