Core Question

What are tokenized stocks on blockchains? 

What they are

Tokenized stocks are stocks or index funds that can be traded on blockchains like Solana. Now, for a long time, anyone in the US weren't allowed to have these. However, due to the sort of recent innovation exemption from the SEC, that will change.

Understanding how they work

They work by essentially representing claim on a number of shares in the real world. You are trusting the custodian with keeping the original shares safe. This is basically sort of like wrapped tokens, but with stocks. Think of the market as one blockchain, and crypto blockchains as another.

The thing that is most different is that they liquidate differently. They use something called Request for Quote, or RFQ. This basically means the smart contract locks in your price no matter what at the protocol level. So 0 slippage or arbitrage to be done, or at least less. 

This is different from Automated Market Movers, or AMM. This is more what we know for crypto. Slippage, liquidity, and adoption all playing a role in your final price. 

Are they any good

I would say they are something we need to keep an eye on. They allow you to get stocks and index funds like SP500 on a blockchain. This allows more security and convenience, allowing you to hold both native crypto and stocks in one self custody wallet.