Solana Tokenized Stocks Hit $100M in a Month, But DeFi Adoption Lags
Solana’s Tokenized Stocks Surge Past $100 Million in Market Cap
Rapid Growth of Tokenized Stocks on Solana
In less than a month since their launch on June 30, tokenized stocks based on the Solana blockchain have exceeded a market capitalization of $100 million. As of July 22, data from rwa.xyz indicates that the market for these tokenized assets has reached approximately $102 million, marking a remarkable 242% increase from its initial valuation of $29.8 million. This growth is primarily driven by xStocks, a product of Backed Finance.
Solana’s Dominance in the Tokenized Stock Market
Currently, Solana holds a significant 20.4% share of the tokenized stock market. In contrast, Ethereum and its layer-2 solutions, including Arbitrum, Polygon, and Base, collectively account for only $11.8 million, making Solana’s market more than eight times larger. The leading tokenized stock is TSLAx, which represents shares of Tesla and boasts a market cap of $13.6 million, with over 11,000 holders. Other notable tokenized stocks include SPYx, linked to the S&P 500, with a market cap exceeding $10 million and nearly 10,000 holders, and CRCLx, representing Circle, with a market cap of $9.1 million distributed among 5,746 holders. Additionally, xStocks has reported over $300 million in trading volume on-chain.
Evaluating Composability in the Market
Despite the impressive growth of tokenized assets on Solana, investors in xStocks have not fully engaged with decentralized finance (DeFi) protocols that could enhance the usability of these assets. The Solana-based money market, Kamino, currently accepts eight xStocks as collateral, including TSLAx, SPYx, and others. However, despite a combined market cap of nearly $50 million, only about $585,000—approximately 11%—has been utilized as collateral thus far.
In terms of liquidity, the largest TSLAx pool on Raydium holds $1.1 million, with $423,600 in tokenized stocks deposited. The SPYx pool also shows a healthy liquidity level of $1.9 million, with $502,000 in tokenized stocks. Nevertheless, the ratios remain low, with only 4.7% of TSLAx’s market cap and 7% of SPYx’s market cap being utilized in DeFi applications.
The Shift from Crypto to Traditional Finance
The limited adoption of tokenized stocks within DeFi platforms can be attributed to a trend where capital flows primarily from the cryptocurrency sector to traditional financial products, rather than the reverse. Michael Cahill, CEO and co-founder of Douro Labs, noted in an interview that traditional market participants entering the crypto space are not yet inclined to leverage DeFi‘s composability features.
Cahill cited the Apollo Diversified Credit Securitized Fund (ACRED), which has over $100 million in net assets but has only a small portion allocated to its on-chain lending pool, as an example of the challenges facing the tokenization industry. However, he remains optimistic about future growth, stating, “We’re just getting started. The introduction of xStocks is a significant development, and while it has taken time for users to become comfortable with these innovations, gradual acceptance is likely.”
He also mentioned that a pivotal moment for a major company could catalyze further growth, emphasizing the importance of creating a user-friendly interface that bridges traditional finance with on-chain products. Cahill concluded, “Once we break down some of these barriers, we could see rapid growth in this sector.”
Conclusion
The burgeoning market for tokenized stocks on Solana illustrates a significant shift in the financial landscape, with potential for further expansion as users become more familiar with DeFi applications. The ongoing evolution of this market will be closely watched as it continues to develop.
