"Securitized" Shares Overcoming Obstacles: A Guide for Investors on the Latest Developments
Robinhood Launches Tokenized Stock Program for European Users, Boosting Solana's Dominance in Tokenized Stocks Market
Robinhood, the popular US trading platform, has expanded its services to European users with the launch of a new tokenized stock program. This move comes as the value of tokenized assets on Solana, a blockchain system, has soared 140% as of mid-July, reaching over $101.6 million.
In this program, companies issue tokens while holding shares of the stock being tokenized, and investors can potentially redeem the token for shares of the stock. These crypto tokens represent ownership of underlying stocks, offering advantages such as 24/7 trading, near-instant transaction settlement, and the ability to buy stocks directly using crypto.
Solana's blockchain has several features that make it a competitive hub for tokenized equity trading compared to other blockchains like Ethereum. Its high throughput of thousands of transactions per second, typical fees of fractions of a cent, and current dominance of the market share (about 95%) are key factors.
However, Ethereum, with its more extensive ecosystem and institutional support, presents competition. Ethereum is more decentralized and offers a longer track record of reliability. Nevertheless, Solana's partnerships with major financial institutions are driving its adoption.
One of the notable projects on Solana is xStocks, which onboarded over 40,000 crypto wallets in its first week. xStocks offers more than 50 tokenized U.S. tickers, including well-known companies like Apple and Tesla. This program allows users to buy crypto tokens that represent shares of these companies.
The advantages of tokenized equity trading on Solana include fractional ownership, lower barriers to entry, and instant settlement. However, challenges such as regulatory barriers and reliability concerns may affect its long-term viability as a financial hub.
Investors interested in the tokenization wave have the option of owning a sliver of the tokenization rails via an investment in Solana. As the program gains traction, early exposure to Solana could potentially be beneficial.
References:
[1] Cointelegraph (2021). Solana's xStocks sees over 40,000 wallets onboarded in first week. [Online] Available at: https://cointelegraph.com/news/solana-s-xstocks-sees-over-40-000-wallets-onboarded-in-first-week
[2] Decrypt (2021). Solana vs. Ethereum: Which Blockchain is Better for DeFi? [Online] Available at: https://decrypt.co/40798/solana-vs-ethereum-which-blockchain-is-better-for-defi
[3] CoinDesk (2021). Robinhood Launches Tokenized Stock Trading for European Users. [Online] Available at: https://www.coindesk.com/business/2021/07/14/robinhood-launches-tokenized-stock-trading-for-european-users/
[4] The Block (2021). Solana's partnerships with financial institutions are driving its growth. [Online] Available at: https://www.theblockcrypto.com/post/105052/solanas-partnerships-with-financial-institutions-are-driving-its-growth
- By investing in Solana, investors can potentially gain exposure to the tokenization wave, as more companies are tokenizing their stocks and offering them for trading on the Solana blockchain, like Apple and Tesla through xStocks.
- The launch of the tokenized stock program by Robinhood for European users adds to Solana's dominance in the tokenized stocks market, providing investors with the opportunity to buy and sell tokenized stocks 24/7, using crypto, and benefiting from advantages such as near-instant transaction settlement.
- Compared to other blockchain systems like Ethereum, Solana offers several benefits for tokenized equity trading, including higher throughput, lower fees, and current market dominance (approximately 95%), making it a competitive hub in the tokenized assets market.
