Tokenized Stocks are tokens that map the prices of real stocks or ETFs onto the blockchain. They maintain a peg to real stock prices, allowing users to trade them 24/7 like cryptocurrencies. The tokenized stocks offered by Pionex aggregate liquidity from various on-chain stock providers such as xStocks and Ondo Stocks. This enables users trading tokenized stocks on our platform to enjoy a liquidity experience similar to traditional brokerages, without worrying about liquidity issues, ensuring smooth and efficient trading.
Official name | xStocks | Ondo Stocks |
Issuer | Backed Finance AG（Registered in Jersey, Operated in Switzerland） | Ondo Global Markets (BVI) Limited |
Custodian Bank | Held by regulated third-party custodian institutions, which primarily include: Alpaca Securities LLC、InCore Bank AG、Maerki Baumann & Co. AG | Custodied by US-registered broker-dealers |
Applicable Chain | Solana (SPL Standard) | Ethereum, BNB Chain |
Price Peg | Nasdaq/NYSE Real-time Quotes | Nasdaq/NYSE Real-time Quotes |
Equity Attribute | Price exposure only, no voting rights | Price exposure only, no voting rights |
Liquidity Provision | On-chain Liquidity Pools (DeFi): Users and institutions pair xStock tokens (such as TSLAx and SPYx) with stablecoins and provide liquidity to pools on the Solana blockchain. These liquidity pools are deployed across DEX platforms including Jupiter and Raydium. | Instant Atomic Mint and Burn Model: The platform adopts an “instant atomic mint and burn” model where tokens are minted only when users place orders to purchase stock tokens—at which point the platform “acquires” real stocks from Nasdaq and mints the corresponding tokens. When users sell, tokens are immediately burned and the stocks are sold on Nasdaq, thereby inheriting Nasdaq’s daily trading depth of hundreds of billions of dollars. |
Trading Mechanism | xStocks works as follows: custodian institutions first purchase the corresponding US equities and mint them as tokens, which are then made available for 24/7 trading via liquidity pools on the Solana blockchain. Finally, arbitrage mechanisms keep on-chain prices aligned with traditional stock market prices. | When a user purchases an Ondo tokenized stock, Ondo purchases the corresponding stock in the traditional market and mints the corresponding token on the blockchain. Conversely, when a user redeems a token, Ondo burns the token and returns the underlying stock to the user. This mechanism ensures that token values are tightly linked to the values of the underlying stocks. |
Is there a risk of liquidity drying up?
US stock market hours:
Theoretically, there is no risk of liquidity depletion. During US stock market trading hours, the platform aggregates liquidity from providers such as Ondo Stocks that mint tokenized stocks in real-time, inheriting the trading depth of Nasdaq. This means users can enjoy liquidity similar to traditional financial markets during trading hours, ensuring smooth and efficient transactions.
Non-US stock market hours:
Due to xStocks’ mechanism where custodians first purchase the corresponding US stocks before minting tokens, then enable 24/7 trading through Solana-based liquidity pools, there may be liquidity depletion issues during extreme market conditions when US stock markets are closed. The platform will implement various measures to mitigate this risk, but users should still be mindful of liquidity fluctuations during non-trading hours.
Is there a risk of losing the peg to real stocks?
1. Underlying Asset Suspension: Lack of effective reference price; on-chain prices may fluctuate based on expectations
2. Reserve/Operational Anomalies: Risk control/technical incidents involving issuers, custodians, cross-chain bridges, or settlement channels
3. Extreme Market Conditions: Instantaneous deviation caused by mismatches between information transmission and price update frequency
4. Rule Adjustments: Issuers may temporarily adjust redemption/subscription terms, fee structures, or transfer restrictions. In essence, we provide on-chain price exposure that is "pegged to" rather than "equivalent to" stocks; under extreme market conditions, depegging is possible. Please carefully evaluate the risks involved.