Key Takeaways
- • Grayscale identifies three distinct phases of equity tokenization, from wrapper models (Phase 1) to entitlement models via DTCC infrastructure (Phase 2) to issuer-sponsored native issuance (Phase 3), with each phase benefiting different blockchain infrastructures.
- • Five blockchain networks—Ethereum, Solana, BNB Chain, Avalanche, and Canton Network—are positioned as primary beneficiaries of tokenized equities adoption, with Phase 3 issuer-sponsored models favoring open-architecture and hybrid networks.
- • Phase 1 wrapper-model tokenized stocks currently represent over 70% of tokenized equity market capitalization, trading across multiple networks including Ethereum, Solana, and BNB Chain, though they represent claims against assets rather than direct ownership.
- • The DTCC's tokenization pilot on Canton Network represents a critical institutional milestone, enabling regulated movement of tokenized equities and other assets across blockchain infrastructure within the existing financial system.
- • Securitize's recent completion of the first publicly listed company to natively tokenize its common stock at NYSE listing exemplifies Phase 3 potential, though broader adoption requires additional regulatory clarity.
Summary
Grayscale has mapped the evolution of tokenized equities into three progressive phases, each representing increasing institutional sophistication and blockchain integration within capital markets. The framework provides institutional investors with a structured understanding of how equity tokenization is likely to unfold across multiple blockchain networks over time.
Phase 1 consists of the "wrapper" model, wherein issuers hold underlying equities within a Special Purpose Vehicle (SPV) and issue tokenized representations as claims against that SPV. This model currently dominates the tokenized equity market, accounting for over 70% of tokenized stocks by market capitalization. Wrapper-model securities do not convey direct ownership but can be utilized throughout decentralized finance applications and appeal to retail participants. These tokens trade across Ethereum, Solana, BNB Chain, and other networks, providing liquidity and accessibility benefits including 24/7 trading capabilities.
Phase 2, exemplified by the Depository Trust & Clearing Corporation's (DTCC) Canton Network pilot, represents the "entitlement" model. Rather than creating new token versions of existing securities, the DTCC brings eligible securities directly onchain through its regulated post-trade infrastructure. This approach maintains alignment with existing institutional settlement frameworks while unlocking blockchain benefits for institutional participants. The Canton Network pilot marks a critical validation point for regulated tokenization at systemic financial infrastructure scale.
Phase 3 encompasses issuer-sponsored models where companies issue securities natively onchain from inception. Securitize's recent achievement as the first public company to tokenize its own common stock at the time of its NYSE listing demonstrates this model's emerging viability. Grayscale identifies this phase as possessing the greatest long-term potential, though broader institutional adoption requires additional regulatory clarity and standardization. Phase 3 issuance favors open-architecture blockchains including Ethereum and Solana, as well as hybrid networks like Avalanche, which offer the necessary infrastructure maturity and governance flexibility.
Grayscale specifically identifies five blockchain networks as positioned to benefit from accelerating equity tokenization adoption: Ethereum, Solana, BNB Chain, Avalanche, and Canton Network. Each network serves distinct use cases across the three-phase evolution. Importantly, Grayscale projects these three tokenization models will coexist for extended periods, creating sustained demand across multiple blockchain layers and infrastructure providers. The firm frames tokenized equities as one of the clearest examples of blockchain adoption in financial markets today, with the DTCC pilot serving as a pivotal institutional inflection point for mainstream capital markets integration.
Phase 1 consists of the "wrapper" model, wherein issuers hold underlying equities within a Special Purpose Vehicle (SPV) and issue tokenized representations as claims against that SPV. This model currently dominates the tokenized equity market, accounting for over 70% of tokenized stocks by market capitalization. Wrapper-model securities do not convey direct ownership but can be utilized throughout decentralized finance applications and appeal to retail participants. These tokens trade across Ethereum, Solana, BNB Chain, and other networks, providing liquidity and accessibility benefits including 24/7 trading capabilities.
Phase 2, exemplified by the Depository Trust & Clearing Corporation's (DTCC) Canton Network pilot, represents the "entitlement" model. Rather than creating new token versions of existing securities, the DTCC brings eligible securities directly onchain through its regulated post-trade infrastructure. This approach maintains alignment with existing institutional settlement frameworks while unlocking blockchain benefits for institutional participants. The Canton Network pilot marks a critical validation point for regulated tokenization at systemic financial infrastructure scale.
Phase 3 encompasses issuer-sponsored models where companies issue securities natively onchain from inception. Securitize's recent achievement as the first public company to tokenize its own common stock at the time of its NYSE listing demonstrates this model's emerging viability. Grayscale identifies this phase as possessing the greatest long-term potential, though broader institutional adoption requires additional regulatory clarity and standardization. Phase 3 issuance favors open-architecture blockchains including Ethereum and Solana, as well as hybrid networks like Avalanche, which offer the necessary infrastructure maturity and governance flexibility.
Grayscale specifically identifies five blockchain networks as positioned to benefit from accelerating equity tokenization adoption: Ethereum, Solana, BNB Chain, Avalanche, and Canton Network. Each network serves distinct use cases across the three-phase evolution. Importantly, Grayscale projects these three tokenization models will coexist for extended periods, creating sustained demand across multiple blockchain layers and infrastructure providers. The firm frames tokenized equities as one of the clearest examples of blockchain adoption in financial markets today, with the DTCC pilot serving as a pivotal institutional inflection point for mainstream capital markets integration.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.