Ep. 756 Tokenized Stocks Are Becoming the Next Big Trading Market

Tokenized stocks and equity perpetuals are being positioned as a way to bring public-market exposure onto crypto rails, rather than as another purely crypto-native market. Eddie Zeng said Arcus became the leading DEX on Robinhood Chain after joining as a day-zero partner in July, citing Robinhood’s focus on retail access to American equities and equity perpetuals as a fit with Arcus’s view of market direction. A platform representative described an offering that combines native equity issuance, spot stock tokens and equity perpetuals.

For spot stock tokens, the platform uses Robinhood’s order book alongside an on-chain request-for-quote system to seek competitive prices, including for larger trades. A user receives a locked-in quote while a market maker obtains and tokenizes the underlying stock through Robinhood, a process the representative said typically takes two to five minutes. The escrow approach is intended to support hundreds or thousands of stocks without creating a separate liquidity pool for each. Spot tokens currently carry no fee and may serve as a loss leader; the representative said the planned sequence is to build liquidity, allow tokens to be used as collateral, then offer perpetuals.

Perpetuals have no expiry and let traders take leveraged positions on price movements, a format the representative said crypto traders already know and may find simpler than options. But they can liquidate posted funds if prices move too far. The representative argued that collateral diversification could reduce some risks inherent in crypto-backed trading: when crypto prices fall, leveraged positions can trigger collateral sales and intensify pressure, whereas a stock such as NVIDIA backing a bitcoin position could provide cross-asset exposure. Eddie Zhang said Arcus is working on stock-token collateral alongside crypto assets, naming ETH as a likely option and SPY as a possibility rather than a finalized choice. Such collateral could let users trade on the other side and potentially support deeper liquidity.

The product’s reach and maturity remain limited. According to the representative, stock tokens and perpetuals have similar but not identical geographic restrictions; both are unavailable in the US, Canada and UK. Stock tokens are issued and redeemed through Robinhood’s crypto entity, and its country list determines access; Switzerland was named as an eligible country. The platform had exceeded $2 billion in volume after eight weeks, but perpetuals were still in read-only beta. Trading stock tokens could improve a user’s chances of moving off the perpetuals waitlist, while the stated priority was liquidity and an experience that lets users trade without moving prices excessively.

October 10’s market turmoil was raised as a stress test for exchange infrastructure. Bryce Paul called it the day with the highest long liquidations in history, while Zeng said the episode highlighted the need to handle more users and liquidations and raised concerns about exchanges’ reliance on Binance for price oracles. Arcus’s December demonstration recorded several hundred thousand transactions per second on Arbitrum; Robinhood Chain was not yet fully live. Separately, perpetual exchanges such as Hyperliquid offered a way to trade oil and manage risk over a weekend during the Iran war, when traditional markets were closed.

Zeng argued that stocks and other real-world assets could diversify portfolios that are heavily concentrated in crypto, which he described as highly correlated internally, while the broader stock market is less correlated with crypto. He said seamless movement between crypto and RWAs could broaden users’ options for long-term wealth creation, and characterized crypto as having a bull market every four years while stocks rise in the other three. Another speaker noted that crypto prices had moved sideways despite growing stablecoin adoption and on-chain stablecoin balances, alongside increasing ownership of RWAs. They hoped the market bottom was behind them but were unsure, and suggested stablecoins and RWAs could enable more sustainable growth with fewer dramatic wipeouts than previous crypto cycles.

The speakers did not present tokenized stocks and perpetuals as simply displacing altcoins: altcoins were described as venture-style bets on transformative technology, with returns concentrated among a small number of winners. One speaker estimated public companies have completed roughly 70–80% of their return curve by the time they go public. Zeng also said stablecoin use in international markets could signal demand for American equities as users look beyond protecting savings from local-currency inflation; Arcus was developing a mobile app to simplify international stock access, which was in pre-order. A host predicted that crypto and equity perpetuals could become available onshore by the end of the president’s term, explicitly presenting this as a personal reading rather than a confirmed outcome.