Author: White 55, Mars Finance
The On-Chain Revolution of Wall Street: How xStocks is Breaking Down a Century-Old Financial Barrier
As the stocks of Apple and Tesla transform into digital codes on the Solana blockchain, a silent financial breakout battle has quietly begun.
On June 30, 2025, the world’s leading cryptocurrency exchanges Kraken and Bybit will simultaneously launch the xStocks product of the Swiss compliant platform Backed Finance. Over 60 tokenized US stock assets will make their debut on mainstream crypto platforms, with stocks from giants like Tesla, Apple, and Nvidia transformed into SPL tokens, enabling 24/7 trading on the Solana blockchain.
Argentinian users buy Tesla tokens TSLAx, and it only takes 10 seconds from placing the order to on-chain confirmation; Kenyan university students purchase 0.01 shares of Apple for 1 dollar; Indonesian miners pledge ETH to borrow gold ETF tokens to hedge against local currency depreciation - these once unbelievable scenarios are reconstructing the underlying logic of 8 billion people participating in the capital markets globally.
01 The Breakthrough: The Second Charge of the Zeroing Team
The entrepreneurial story of Backed Finance is filled with drama. The three Israeli co-founders Adam Levi, Yehonatan Goldman, and Roberto Klein all came from the now-defunct DAOstack project. This DAO operating system, which raised $30 million in 2018, ultimately shut down in 2022 due to the token GEN plummeting to nearly zero.
The “Losers’ Alliance” captured a key opportunity in 2021. After witnessing the success of stablecoins, they founded Backed Finance, dedicated to bringing traditional assets into compliance on the blockchain. The team’s construction presents a stark dichotomy:
Compliance Fortress: Anti-Money Laundering Consultant Angélica Sola (Founder of AS COMPLIANCE) and legal expert Jerome Dickinson (Master of Laws from McGill University) form a regulatory moat.
Technical Breakthrough: CTO Yotam Katznelson leads a team of former engineers from 21 Shares to build a cross-chain system.
Interestingly, the music master’s background of growth director David Henderson is at odds with traditional finance, yet it hints at the project’s ambition to attract cross-border users. In April 2024, Backed completed a $9.5 million Series A financing, led by Gnosis, laying the groundwork for the breakout of xStocks.
02 Technical Anatomy: Four Steps to Restructure Asset Flow
xStocks operates like a precision clock, achieving a balance between off-chain compliance and on-chain freedom:
Asset backing is the cornerstone of trust. Backed by purchasing Tesla stocks through Interactive Brokers, the assets are deposited into a segregated account at Clearstream, the largest custodian in Europe. Each account number is publicly auditable, ensuring that even if the issuer goes bankrupt, the rights of token holders are not affected.
The chain mapping enables instant conversion. When Clearstream confirms the deposit of stocks, the smart contract on the Solana chain automatically triggers the minting of the corresponding amount of TSLAx tokens. These ERC-1400 standard tokens are 1:1 pegged to the stocks, yet they gain a new life bestowed by the blockchain.
Multi-level circulation releases liquidity. Tokens penetrate globally through exchanges like Kraken and Bybit, while also being transferable to Phantom wallets for participation in Raydium’s liquidity mining or Kamino’s collateralized lending. Stocks upgrade from “sleeping assets” to income-generating tools, with annual yields three times higher than traditional brokerage margin accounts.
Redemption closed-loop guarantee exit channel. After the user submits KYC, Backed destroys on-chain tokens and instructs Clearstream to transfer the stocks to the designated brokerage account, completing the return to the traditional financial system within 1-3 working days.
The core of the technological breakthrough lies in the combination of Clearstream account isolation and Solana’s high-concurrency settlement, achieving atomic-level anchoring of on-chain rights and off-chain assets. When Solana’s throughput of 65,000 transactions per second crushes the traditional financial T+2 settlement system, the efficiency revolution is unstoppable.
03 Market Shockwave: Liquidity Feast and Hidden Concerns
The data from the first day of the launch reveals that enthusiasm coexists with risks:
On June 30, the on-chain transaction volume was $1.338 million (with 1,225 users)
Soared to 6.64 million USD the next day (with 6,565 new users)
Liquidity presents a brutal pyramid. The three major tokens, TSLAx (1.71 million), SPYx (1.53 million), and CRCLx (940,000), account for 70% of the trading volume, while 80% of small-cap stock tokens have fewer than 20 daily trades, with slippage reaching as high as 5%. This differentiation exposes the Achilles’ heel of the tokenized market: when capital only chases star assets, the liquidity black hole of long-tail assets may devour the ideals of inclusive finance.
Traditional brokers are facing a triple dimension reduction impact:
Time Dimension: xStocks weekend trading volume exceeded 4.7 billion USD, accounting for 12% of the traditional market’s average weekly volume.
Cost Dimension: Bybit charges a fee of 0.04 USDT per share, which is only 1/100 of the cross-border commission (3-5%) of international brokers.
Scene Dimension: Robinhood is forced to acquire Bitstamp to enter the cryptocurrency market, and Futu Securities urgently launches Bitcoin recharge feature.
Deeper changes are fermenting in the DeFi scene. Filipino workers sell Apple AAPLx tokens using the Kraken APP on the subway to pay rent; retail investors in Hong Kong transfer dividends to Solana wallets to purchase NFTs; African farmers collateralize corn warehouse receipt tokens to borrow and start businesses—these fragmented financial behaviors are deconstructing the power walls built by Wall Street over the past century.
04 Undercurrent: The Dance on the Tightrope of Regulation
The compliance framework of xStocks can be described as an art of regulatory arbitrage:
Swiss DLT license as a shield: leveraging the requirement for full collateralization of tokens under the “Distributed Ledger Technology Act” to build a legal moat.
Jersey shell as a spear: Issuing bond-type tokens through Special Purpose Vehicles (SPV) to circumvent equity registration requirements
DigiFT analyst Ryan reveals key vulnerabilities: xStocks are essentially corporate bonds rather than equity tokens. Backed issues bearer bonds that track stock prices, avoiding the stamp duty on equity transfers and bypassing custodial qualification restrictions. Distribution relies on global penetration completed by Kraken subsidiary PDSL, which holds a Bermuda DA license.
This intricate design embeds dual risks:
SEC Long-Arm Jurisdiction: Despite excluding US users, VPN disguised addresses may still trigger cross-border law enforcement.
Deficient Rights: Token holders only receive economic benefits, while voting rights are systematically deprived.
When Argentine arbitrageurs exploit the price difference between after-hours US stock prices and on-chain prices (for example, when Tesla’s after-hours price is $215.3 and the on-chain price of TSLAx is $215.9, they immediately buy US stocks → mint TSLAx → sell on-chain to arbitrage $0.6 per share), the information moat between traditional exchanges and regulatory bodies is collapsing.
05 Future Vision: The Key to a Trillion-Dollar Market
The ultimate battlefield for tokenized securities far exceeds the realm of stocks:
Tokenization of Treasury Bonds: Backed in conjunction with Ondo Finance has increased the annual yield of U.S. short-term Treasury bonds to 5.3%, which is 400 basis points higher than bank deposit rates.
Private Equity Breakthrough: Robinhood Launches Tokenized Equity for OpenAI and SpaceX in Europe, Opening Up Channels for Unlisted Asset Circulation
Derivatives Revolution: Gate.io is the first in the world to create a US stock contract market, integrating leveraged operations with the USDT pricing system.
The market structure is facing fundamental reconstruction. When more than 50% of Tesla’s stocks are circulated through tokens, the pricing power of traditional exchanges may yield to the depth of on-chain order books. Deloitte pointed out in its “2025 Global Tokenization Predictions”: “Blockchain is building a new bridge connecting traditional finance and digital natives.”
The path to breaking the liquidity dilemma has already become apparent:
Perpetual Contract Breakthrough: Decentralized platforms like Hypeliquid deploy stock perpetual contracts (stonk perps), leveraging oracle prices and funding rate mechanisms to circumvent spot liquidity bottlenecks.
Cross-chain liquidity pool: The product covers 8 public chains including Ethereum, Avalanche, Base, etc., and connects fragmented depth through aggregators like Jupiter.
Market Maker Incentives: Dynamic adjustment of spreads to 0.5% to compensate for non-trading period risks, but sacrificing some low-cost advantages.
The $16 trillion tokenized asset market predicted by BlackRock is accelerating into reality. As real estate, carbon credits, and music copyrights all go on-chain, xStocks is just the prelude to this on-chain renaissance.
Tesla stock certificates quietly lie in the Swiss bank vault, while TSLAx tokens on the Solana chain trade dozens of times per second. The asset mirror between the physical world and the digital world is establishing a quantum entanglement-like connection between Clearstream’s segregated accounts and Solana’s validation nodes.
The century-old fortress of traditional finance has developed its first crack, and light is pouring in through the fissure. Kenyan university students are holding fractional shares of Apple with the lunch money they saved, which is just $1; Brazilian traders are buying the dip on Nvidia while the NYSE is closed; Argentine arbitrageurs are capturing a $0.6 price difference — these financial actions in micro time and space are converging into a new paradigm of capital flow.
When Kraken CEO Arjun Sethi proclaimed, “We are not launching a new product, but unlocking the underlying protocol for human wealth freedom,” the blockchain bell had already rung outside the marble halls of Wall Street.
