Asset Tokenization: The Evolution from Concept to Practice

Recently, many well-known platforms have announced support for trading US stocks on the blockchain and plan to launch their own public chains. At the same time, some trading platforms have also launched multiple trading pairs for US stock tokens, sparking a wave of on-chain stock trading.

The seemingly sudden wave of tokenization is actually a continuation of the seven-year evolution of asset on-chain in the crypto world. From early synthetic asset experiments to the practical application of stablecoins, and then to the structured integration of real-world assets (RWA), the theme of "the combination of assets and blockchain" has been continuously developing, and is now ushering in a reboot that is closer to reality and has more institutional characteristics.

Tokenization of US Stocks: New Applications of an Old Concept

On the surface, stock tokenization seems to be a new trend in the Web3 world, but in reality, it resembles a resurgence of an old concept.

During the previous on-chain prosperity cycle, some projects have explored a set of synthetic asset mechanisms. Users can create "synthetic assets" pegged to US stocks, fiat currencies, indices, or even commodities on-chain by over-collateralizing native crypto assets, achieving an asset trading experience without intermediaries.

The main advantages of this model are that it does not require the custody and clearing of real assets, no counterparty matching, infinite depth, and zero slippage trading. However, due to oracle distortion, extreme asset volatility, frequent systemic risks, and the lack of real regulatory connections, this "synthetic asset" model is gradually retreating from the historical stage.

The current boom in tokenization of US stocks has actually shifted from "synthetic assets" to "real stock mapping", marking the entry of the tokenization narrative into a new phase of "on-chain real asset docking".

For example, taking the U.S. stock token trading products launched by some platforms, based on the disclosed information, what is involved is a redesign of the on-chain channels and settlement structures of the actual stock assets, that is, the actual holding of stocks, with funds flowing into the U.S. stock market through compliant brokerages.

For users, this model provides a brand new on-chain investment window: no account opening, no identity verification, no geographical restrictions, just a crypto wallet and a certain amount of stablecoin, allowing users to bypass the cumbersome processes of traditional brokers and trade US stock Tokens directly on decentralized exchanges, achieving 24/7 trading, fast settlement, and global seamless access. This experience is something that the traditional securities system finds hard to match, especially for global investors, particularly non-US residents.

The implementation of this model relies on the capability of blockchain as the "clearing and settlement + asset confirmation" infrastructure, and it also reflects a significant advancement of tokenization from technical experimentation to practical application.

From a more macro perspective, "U.S. stock tokenization" is just a subset of the tokenization process of real-world assets (RWA). It reflects the continuous evolution of the on-chain narrative of assets from token issuance to synthetic assets, and then to RWA anchoring since the rise of the tokenization concept in the 2010s.

The Development History of Tokenization

Looking back at the development of tokenization, it is not difficult to find that it has almost run through the core main line of every round of infrastructure innovation and narrative evolution in the crypto world.

From the "token issuance boom" in 2017 to the "DeFi summer" in 2020, and then to the recent "RWA narrative" and the latest "tokenization of US stocks" implementation, we can basically outline a relatively clear evolution path of on-chain assets.

The earliest large-scale practice of tokenization began during the token issuance craze of 2017. At that time, the concept of "token as equity" inspired countless entrepreneurial projects' financing imaginations, with Ethereum providing low-threshold issuance and fundraising tools, making tokens digital certificates representing future rights (equity, usage rights, governance rights).

However, in the context of the lack of a clear regulatory framework, the absence of value capture mechanisms, and severe information asymmetry, a large number of projects have devolved into bubbles, ultimately dissipating as the bull market retreats.

In 2020, the explosion of DeFi marked the second peak of tokenization applications. A series of on-chain native financial protocols utilized on-chain native assets like ETH to construct a permissionless and censorship-resistant financial system, allowing users to perform complex financial operations such as lending, staking, trading, and leveraging on-chain.

The tokens at this stage are no longer financing certificates, but have evolved into a core asset class of on-chain financial tools, such as packaged assets, synthetic assets, and interest-bearing assets. Some protocols have even started accepting real-world assets like real estate as collateral, thereby achieving a better integration of traditional finance and DeFi.

The restart of tokenization marks a watershed moment, beginning the attempt to introduce more stable and larger-scale real-world assets.

Starting from 2021, the narrative further escalated, and some protocols began to attempt to integrate real-world assets such as real estate, government bonds, and gold ( RWA ) as underlying collateral. The definition of tokenization has also expanded from "tokenization of native assets" to "tokenization of off-chain assets."

Unlike traditional abstract assets anchored by code, RWA represents the on-chain confirmation, splitting, and circulation of real assets anchored by physical assets or legal rights. Due to their relatively stable value, clear valuation standards, and mature experience in compliance regulation, they also bring a more reality-based "value anchor" to on-chain finance.

According to relevant data, the total market size of RWA has exceeded 25 billion dollars. Predictions suggest that by 2030, the market value of tokenized assets could reach 10 trillion dollars, which means a potential growth space of over 40 times in the next 7 years.

The Future Development Direction of Tokenization

There is no doubt that the most successful tokenization product in the past five years has been stablecoins. It is the first tokenized asset to truly find a "product-market fit": mapping cash, the most basic and liquid asset, into the on-chain world and building the first "value bridge" connecting traditional finance with decentralized finance.

The operational logic of stablecoins is representative: real assets (such as US dollars or short-term government bonds) are held off-chain by banks or custodians, and an equivalent Token is issued on-chain, allowing users to hold, pay, trade, or interact with DeFi protocols through a cryptocurrency wallet.

This not only inherits the stability of fiat currency but also fully unleashes the advantages of blockchain: efficient settlement, low-cost transfers, 24/7 trading capabilities, and seamless integration with smart contracts.

Currently, the total market value of global stablecoins has surpassed 250 billion USD, indicating that the true implementation of tokenization depends on whether it addresses real-world asset circulation and transaction efficiency issues, rather than merely relying on technological innovation itself.

Nowadays, the tokenization of US stocks seems to be becoming the next focal point for tokenized assets.

Unlike the previous synthetic asset models that relied on oracles and algorithms, the current "real stock token" scheme is getting closer to real financial infrastructure, gradually exploring the standard path of "real stock custody + on-chain mapping + decentralized trading."

It is worth noting that some mainstream platforms are successively announcing the launch of native chains or self-developed chains, and supporting the trading of real stocks on the chain. From the information disclosed so far, most of the underlying technical partners for these tokenization paths are still based on the Ethereum ecosystem, which further confirms Ethereum's core position as the infrastructure for tokenization.

Ethereum not only has a mature smart contract system, a large developer community, and a rich standard for asset compatibility, but more importantly, its neutrality, openness, and composability provide the most scalable soil for the mapping of financial assets.

Overall, if we say that the previous rounds of tokenization were driven by Web3 native projects as experiments in crypto finance, then this time it feels more like a professional reconstruction led by traditional finance—coming with real assets, genuine regulatory compliance needs, and global market demands.

This time may truly mark the beginning of tokenization.