ChatGPT Generated Banner. Capital Market Price exposure in Web3 through RWA Digitized Equity Tokens.
Stock trading expanding into Web3 Landscape
Traditional assets are poised to board on crypto rails in form of RWA assets. SEC is looking to [finalize](https://cryptopotato.com/sec-prepares-to-allow-trading-tokenized-stocks-on-crypto-platforms/) a “innovation exemption” framework – permitting tokenized stocks to trade on crypto platforms and DEXs.
Growth of RWA Stock trading Segment expected
Currently, news articles have reported that even stocks not having permission of issuing company to be listed for trade in crypto platforms will be permitted to trade as RWA share tokens in Crypto platforms.
The potential for growth in trading of tokenized equities in the Web3 landscape is huge with tokenised equities now only comprising 4.3% market share in the broader RWA Asset Market with $1.45 Billion TVL.
Now with favorable tailwinds blowing in the form of friendly regulation, the RWA segment of tokenized share trading is bound to grow.
RWA stocks not equipped to provide benefits physical stocks provide
However, there are some limiting factors present -:
Holders of tokenised stocks are not considered as ones owning a stake in the company – currently it appears these RWA tokens only track price of the company stock.
As digitised tokens of Stocks can be listed without having the backing and consent from company, tokenised shareholders may not earn dividend payouts and have voting rights.
However, in my opinion in Web3 it is possible to design a mechanism where holders of RWA share tokens earn yield and get governance rights.
In Web3 – Governance frameworks and yield payouts functions can be integrated into a financial product.
Therefore, such drawbacks could eventually be addressed if suitable governance and payout frameworks are integrated into tokenized equity products.
Yet, it’s true traditional shares are original products where shareholders get direct stake in ownership rights over company, while RWA tokenised stocks are their mirror assets. RWA stock tokens are not original shares issued by company, they are copies of the shares issued by company, undertaken by a trusted 3rd party.
Yet, this development is exciting as Web3 investors get exposure to financial assets other than crypto.
Integration of financial landscape with wider array of financial products available for investment
My earlier article had outlined how Web3 investors now get exposure to Gold’s price action in form of RWA Tokenised Gold - PAXG and XAUT.
Gold: The Trending Glittering Asset Across TradFi and Web3
Investment World cannot be siloed just like assets in Web3 cannot be siloed being locked in different Blockchains. They need to be connected – an investor should have platforms where they can invest in crypto, treasuries, Gold, shares, Real estate and other assets.
RWA has made it possible for Web3 investor to invest in other Real World Asset products like Treasuries that form 46% of the RWA Market Cap at 13$ Billion TVL and tokenized Gold, constituting 26% of RWA Market Cap with 7.37$ Billion TVL.
Once in Web3 rails these Traditional Finance Assets get flexibility of crypto assets where they can be traded 24/7.
These assets find additional utility here as well – as they can be used as collateral to lend and borrow in DEFI.
Growth of RWA tokenized Stock segment is bullish for ONDO
This news about SEC designing framework to allow broader trading of RWA digitized equities was bullish news for ONDO as Ondo Global Markets is the Market leader in the RWA tokenized stock segment with a 70% share in issues of tokenized shares.
This is why ONDO price recently got a 14% up lift from 0.34$ to 0.40$.
Tradingview Chart . ONDO surges with RWA share token demand to increase with SEC’s Framework to allow trading of digitised RWA equities in Crypto Platforms.
The expansion of RWA equities segment is a bullish fundamental for Ondo Global Markets business. Already the RWA issuer has surpassed 1$ billion issues as reflected in TVL. These issued RWA tokens are actively traded as well, with cumulative trading volume surpassing 18$ billion
Right now, Ondo Global Markets has created over 260 RWA Tokenised Stocks and ETFs. They are available to be utilised in Web3 landscapes beyond Ethereum at Solana and BNB chains as well.
As demand for RWA digitised versions of more stocks rises, Ondo Global Market issues of RWA share tokens would increase exponentially. Katie Wheeler, Managing Director of Global Partnerships has said it is feasible to imagine the RWA issuer to process 5$ billion in issues that would reflect in TVL figures.
Expansion of activities in allied Web3 verticals due to growth in RWA Tokenised Equity vertical
Growth in Tokenised share RWA segment will increase business activities of other Protocols belonging to allied Web3 Verticals - Money Market and Trading Platforms.
Hyperliquid being the largest DEX for trading in RWA perpetuals – will benefit with increased trading activity.
Aave, Morpho, Fluid lending and borrowing business will benefit by including RWA tokenised stocks as assets that can be provided as collateral. It adds depth in collateral options – expands business attracting users.
Reference
SEC Prepares to Allow Trading Tokenized Stocks on Crypto Platforms
ONDO Surges 16% As SEC Eyes Framework For Tokenized Stock Trading
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