Author | Wu Says Blockchain
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On June 30, 2025, cryptocurrency exchanges Bybit and Kraken announced the launch of the xStocks product provided by the Swiss compliant asset tokenization platform Backed Finance. xStocks is a series of tokens collateralized 1:1 by real stocks, with the underlying assets held by regulated third-party custodians (such as InCore Bank and Maerki Baumann). These tokens are issued under the SPL standard on the Solana public chain, supporting 24/7 trading and on-chain instant settlement, breaking the time and geographical limitations of traditional stock markets. According to compliance requirements, xStocks is currently only available to non-US users; US persons are prohibited from purchasing or holding this product. Subsequently, many major platforms such as Cryptocom and GMGN also launched xStocks.
Team background.
According to LinkedIn, the three co-founders of Backed Finance previously worked on the now-defunct DAOstack project. DAOstack raised nearly $30 million through private placements, pre-sales, and public offerings from Q4 2017 to May 2018, with financing prices between $0.708 and $0.9423, with major investors including Cultu.re, Endor Protocol, Gnosis, and Menlo One. However, the price of the project's GEN token plummeted significantly after May 2021 and eventually approached zero. At the end of 2022, DAOstack officially shut down. This relatively negative team background has sparked community discussions.
In 2021, inspired by the widespread application of stablecoins, these three founders left DAOstack to establish Backed Finance, aiming to bring traditional assets such as stocks into the blockchain system in a compliant manner. Between 2021 and 2022, Backed completed project feasibility verification and seed round financing, and established partnerships with custodial banks and brokers, with relevant product prospectuses obtaining EU regulatory approval. The first batch of products was launched in 2023, with a cumulative issuance scale surpassing $50 million. In April 2024, Backed completed a $9.5 million Series A financing, led by Gnosis, with participation from institutions including Exor Seeds, Cyber Fund, and Mindset Ventures.
Product system and on-chain deployment.
Backed Finance currently offers on-chain tokenized securities services covering global blue-chip stocks, index funds, and short-term bonds through two major product lines — xStocks and bTokens. All tokens are backed by 1:1 physical assets and have ISIN numbers approved by EU regulations. The products have been issued on mainstream public chains such as Ethereum, Solana, Avalanche, Base, and Polygon, and are integrated with DeFi protocols like Kamino Finance, Raydium, and Jupiter Exchange, supporting on-chain strategy deployments such as lending, market making, and arbitrage.
DigiFT analyst Ryan pointed out that the xStocks token is essentially a debt structure (corporate debt, tracking underlying assets), rather than an equity token. Issuing debt to track underlying assets does not require custodial qualifications for the issuer, hence the backed issuer is a SPV, which does not have distribution qualifications. The xStock involves a Bermuda DA licensed entity PDSL, which is actually a subsidiary of Kraken, and is distributed through this entity.
Because it is a debt, it relates to dividends, and xStocks directly airdrops tokens; tokens do not involve corporate actions. Debt can issue bearer bonds, so it is essentially more like stablecoins, categorically a corporate liability. More importantly, the transfer of debt ownership does not require registration (equity does), so there is no stamp duty involved (although this is a rather absurd tax category in traditional finance), enabling any on-chain transfer.
The purchase will involve margin financing and the exchange of stablecoins, so there is a purchase limit per transaction. Additionally, traditional brokers only support trading during market hours on weekdays, along with pre-market and after-hours trading on blueocean. To compensate for market maker losses, the spread is set at 1%, and the fees are relatively high at 0.5%. In summary, it allows users to gain exposure to US stocks without further functionality, but currently, it is sufficient. If institutionalization is needed in the future, other issuance structures and solutions will be required.
Trading experience: Insufficient liquidity and participation barriers.
Despite support from Bybit and Kraken, the actual trading activity of xStocks remains highly concentrated, with only six underlying assets—NVDAx, MSTRx, TSLAx, CRCLx, SPYx, and AAPLx—showing significant trading volume. According to on-chain data provided by defioasis, on the first day of the product's launch on June 30, 2025, the on-chain trading volume was $1.338 million, with 1,225 independent trading users and 2,510 transactions; on July 1, on-chain trading activity significantly increased, with that day's trading volume reaching $6.64 million, 6,565 new independent trading users, and 17,879 transactions. Trading was primarily concentrated in a few tokens like TSLAx ($1.71 million), SPYx ($1.53 million), and CRCLx ($940,000), while most other underlying assets had very limited on-chain trading, with some pools having zero liquidity, and there were widespread slippage issues.
In addition to the on-chain path, xStocks can also be traded through internal matching on exchanges. Bybit offers trading pairs based on USDT, while Kraken supports trading in fiat currency but has not yet opened stablecoin trading pairs and has a minimum purchase amount limit. It is important to note that whether on-chain trading or exchange trading, both currently face widespread liquidity issues, resulting in low user transaction efficiency and limited market depth, and the overall trading experience still shows a significant gap compared to traditional contract-for-difference platforms.
Target audience and structural advantages.
The Backed model primarily serves non-US users who find it difficult to access US stocks through traditional brokers, especially native crypto users. Its advantages include: support for stablecoin payments and small transactions, no need for a US stock account, on-chain 24/7 matching and settlement, real asset custody, and EU regulatory compliance.
Expansion path: derivatives and tokenization of unlisted equity.
Although xStocks provides infrastructure for on-chain US stock investment, liquidity bottlenecks in the spot market still exist, making it difficult to form a scalable trading ecosystem. As a result, the industry has begun to focus on more trade-oriented derivatives paths, particularly perpetual contracts for stocks (stonk perps). Popular tech stocks have high volatility, and when combined with high leverage mechanisms, they can yield high volatile returns similar to altcoins, making them more attractive to crypto users. Such products do not require actual stock delivery and can rely on oracle prices and funding rate mechanisms for pure on-chain trading, with mature technical pathways suitable for prioritizing deployment on decentralized platforms like Hypeliquid. Compared to the compliance barriers faced by centralized exchanges, decentralized derivatives platforms offer greater flexibility and experimental space.
Another development direction worth noting is the tokenization of equity in unlisted companies. Compared to the traditional private placement market, which is opaque and has restricted exit mechanisms, on-chain issuance of transferable equity tokens, combined with DAO governance, contract lock-ups, and qualified investor thresholds, is expected to achieve an efficient and transparent structure for early equity circulation, particularly suitable for star companies like OpenAI and SpaceX that have high market attention. However, this path still faces regulatory uncertainties and complex issuance structures, making it more likely to exist in pilot or gray compliance forms in the short term.
Conclusion.
xStocks provides a practical path for compliant asset tokenization, with its on-chain structure, cross-chain deployment, and DeFi integration capabilities demonstrating strong product design capabilities. However, the liquidity constraints of the spot model and insufficient user expansion capabilities determine that it is difficult to independently support the growth curve of the tokenized stock market. In the future, breakthroughs around perpetual derivatives and early equity tokenization may become key nodes in driving the on-chain securities market from 'tool-type products' to 'trading-type assets.'