Key Takeaways
- • Tokenized equities market is progressing through three distinct models: Phase 1 (third-party wrapper model, currently 70%+ of tokenized stocks by market cap), Phase 2 (DTCC entitlement model via regulated post-trade infrastructure on Canton Network), and Phase 3 (issuer-sponsored natively onchain issuance).
- • Securitize achieved a milestone by becoming the first public company to tokenize its own common stock at the time of its NYSE listing, exemplifying the Phase 3 issuer-sponsored model that Grayscale identifies as having the greatest long-term potential.
- • The DTCC's tokenization pilot on Canton Network represents a critical inflection point, enabling tokenized equities and other assets to move across blockchain infrastructure within the existing regulated financial system rather than creating parallel markets.
- • Tokenized equities unlock operational benefits including 24/7 trading, settlement modernization, and fractionalization, though tokenization is fundamentally infrastructure innovation modifying settlement mechanics rather than creating a new asset class.
- • All three tokenization models are expected to coexist for years; issuer-sponsored models favor open-architecture blockchains like Ethereum and Solana as well as hybrid networks like Avalanche, while current Phase 1 tokenized stocks trade primarily on Ethereum, Solana, and BNB Chain.
Summary
The tokenization of global equity markets has transitioned from theoretical concept to operational reality, with three distinct models now coexisting at different maturity stages. According to Grayscale's analysis, the market is experiencing a three-phase evolution that will drive value to different blockchain infrastructure providers over time.
Phase 1, the third-party wrapper model, currently dominates the tokenized equity market, representing more than 70% of tokenized stocks by market cap. In this model, issuers hold equities in Special Purpose Vehicles (SPVs), and tokenized stocks function as claims against these vehicles. While wrapper-style tokenized stocks do not represent true ownership, they enable participation throughout decentralized finance ecosystems and appeal to retail investors. These instruments trade across multiple blockchain networks including Ethereum, Solana, and BNB Chain.
Phase 2, exemplified by the DTCC's tokenization pilot on the Canton Network, represents a fundamentally different approach. Rather than creating new versions of securities, the DTCC is bringing existing eligible securities onchain through its regulated post-trade infrastructure. This model operates within the established financial regulatory framework and allows tokenized equities and other assets to move across blockchain infrastructure while remaining within the regulated system—a critical distinction that legitimizes tokenization as infrastructure evolution rather than parallel-market creation.
Phase 3, the issuer-sponsored model, represents the longest-term opportunity. Securitize recently became the first public company to tokenize its own common stock at the time of its NYSE listing, marking a significant achievement in this category. This model involves companies issuing securities natively onchain, eliminating intermediaries and SPVs. Grayscale identifies this approach as having the greatest long-term potential, though it will require additional regulatory clarity. Issuer-sponsored tokenized equities favor open-architecture blockchains such as Ethereum and Solana, as well as hybrid networks like Avalanche.
The operational benefits of tokenization include extended trading hours (24/7 availability), modernized settlement mechanics addressing legacy inefficiencies like multi-day settlement cycles, and democratization through fractionalization that lowers barriers to entry for retail investors. Importantly, industry analysis emphasizes that tokenization represents infrastructure innovation modifying settlement mechanics and operational efficiency rather than creating a fundamentally new asset class with different risk-return characteristics. All three models are expected to coexist for years as the market matures and regulatory frameworks develop.
Phase 1, the third-party wrapper model, currently dominates the tokenized equity market, representing more than 70% of tokenized stocks by market cap. In this model, issuers hold equities in Special Purpose Vehicles (SPVs), and tokenized stocks function as claims against these vehicles. While wrapper-style tokenized stocks do not represent true ownership, they enable participation throughout decentralized finance ecosystems and appeal to retail investors. These instruments trade across multiple blockchain networks including Ethereum, Solana, and BNB Chain.
Phase 2, exemplified by the DTCC's tokenization pilot on the Canton Network, represents a fundamentally different approach. Rather than creating new versions of securities, the DTCC is bringing existing eligible securities onchain through its regulated post-trade infrastructure. This model operates within the established financial regulatory framework and allows tokenized equities and other assets to move across blockchain infrastructure while remaining within the regulated system—a critical distinction that legitimizes tokenization as infrastructure evolution rather than parallel-market creation.
Phase 3, the issuer-sponsored model, represents the longest-term opportunity. Securitize recently became the first public company to tokenize its own common stock at the time of its NYSE listing, marking a significant achievement in this category. This model involves companies issuing securities natively onchain, eliminating intermediaries and SPVs. Grayscale identifies this approach as having the greatest long-term potential, though it will require additional regulatory clarity. Issuer-sponsored tokenized equities favor open-architecture blockchains such as Ethereum and Solana, as well as hybrid networks like Avalanche.
The operational benefits of tokenization include extended trading hours (24/7 availability), modernized settlement mechanics addressing legacy inefficiencies like multi-day settlement cycles, and democratization through fractionalization that lowers barriers to entry for retail investors. Importantly, industry analysis emphasizes that tokenization represents infrastructure innovation modifying settlement mechanics and operational efficiency rather than creating a fundamentally new asset class with different risk-return characteristics. All three models are expected to coexist for years as the market matures and regulatory frameworks develop.
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