KEYTAKEAWAYS
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Ondo Finance is expanding from tokenized Treasuries into equities and ETFs, aiming to build a “Wall Street 2.0” onchain with scale and institutional-grade custody.
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Backed Finance’s xStocks bring the strongest liquidity and DeFi composability, Swarm Markets emphasizes strict BaFin compliance, while Synthetix shows the limits of synthetic assets.
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The future of tokenized stocks depends on regulatory clarity, product depth, and frictionless infrastructure—whoever closes the loop on compliance, custody and liquidity could define the market.
- KEY TAKEAWAYS
- ONDO FINANCE: FROM TREASURIES TO THE BROADER SECURITIES MARKET
- ONDO FINANCE, BACKED FINANCE (XSTOCKS), SWARM MARKETS AND SYNTHETIX: FOUR APPROACHES TO TOKENIZED STOCKS
- COMPLIANCE RADIUS, CUSTODY LINKS AND THE LIQUIDITY FLYWHEEL
- FUTURE TURNING POINTS AND THE RACE TO INFRASTRUCTURE
- DISCLAIMER
- WRITER’S INTRO
CONTENT
ONDO FINANCE: FROM TREASURIES TO THE BROADER SECURITIES MARKET
In the rise of real-world asset tokenization, Ondo Finance stands out as one of the most ambitious players. It started with a sharp entry point: bringing short-term US Treasuries and money market funds onchain. Products like OUSG and USDY combined safety and yield with onchain liquidity and composability, making them useful as collateral and trading assets in DeFi. Behind them were licensed brokers and custodians, ensuring every token was backed 1:1 by real securities with a redemption channel to keep prices close to traditional markets.
But Ondo never wanted to be just a “bond supermarket.” In September 2025, it launched Ondo Global Markets with more than 100 tokenized US stocks and ETFs, from Apple and Tesla to SPY and QQQ. By year-end, the goal is to reach more than a thousand listings. This shift pushes Ondo beyond fixed income into building a broad marketplace—essentially an onchain version of Wall Street, bridging bonds, equities, and ETFs under one roof.
ONDO FINANCE, BACKED FINANCE (XSTOCKS), SWARM MARKETS AND SYNTHETIX: FOUR APPROACHES TO TOKENIZED STOCKS
Different players are taking different roads toward tokenized equities. Ondo’s model looks very different from its rivals, but all are racing to define the rules of this new market.
Backed Finance has built the most liquid path so far. Its xStocks line covers over 60 major equities and ETFs, from Apple and Tesla to S&P 500 and Nasdaq 100 trackers. Every token is backed 1:1 by assets in Swiss custodial banks, redeemable at net asset value. The real edge is liquidity: xStocks are standard ERC-20 or SPL tokens, tradable on Kraken and Bybit, and active across Solana’s Jupiter and Raydium. They move across CeFi and DeFi almost like stablecoins. The drawback is fragility. Backed relies heavily on Switzerland’s DLT framework, leaving it shut out of the US and exposed if regulators shift their stance.
Swarm Markets represents the opposite. It is the first BaFin-licensed DeFi exchange in Germany, with a structure built for institutions. Every stock or bond ETF token is fully backed and supervised by a trustee, with monthly proof reports. But the tokens can only circulate in permissioned pools among KYC’d addresses. That makes Swarm safe and transparent, but slow. It is trusted by cautious banks and funds, but nearly unusable for open DeFi.
Synthetix once explored the extreme other end: synthetic equities without real backing. By staking SNX, users could mint tokens like sTSLA and sAAPL, tracking stock prices via oracles. It was fully permissionless and globally open, but with no shareholder rights or dividends, and high regulatory risk. Over time, usage declined, and the project shut down stock synths, focusing instead on stablecoins and derivatives. It proved the idea of radical decentralization, but also its limits in equities.
Ondo sits between these poles. With brokers like Alpaca, it offers real stock-backed tokens, daily third-party audits, and redemption channels, while also pushing listings to CEXs and DeFi aggregators. Its advantage is scale and credibility, but its tokens are still limited to non-US investors under whitelists.
COMPLIANCE RADIUS, CUSTODY LINKS AND THE LIQUIDITY FLYWHEEL
What decides who wins is not whether tokens can be issued, but whether an actual market can be built onchain. Three dimensions matter most.
The first is compliance radius. Ondo expands through multiple SPVs, serving institutions with bonds and non-US users with equities. Backed has the widest reach, with free-flowing tokens under Swiss law but no US access. Swarm has the smallest but most solid circle, anchored by BaFin and EU rules. Synthetix has an unlimited radius in theory, but no legal safety, keeping mainstream capital away.
The second is custody links. Ondo and Backed both ensure real stock custody—Ondo with US brokers, Backed with Swiss banks. Swarm adds trustee supervision and the highest transparency. Synthetix bypasses custody entirely, depending on its debt pool. Clearer custody lines mean stronger institutional trust.
The third is the liquidity flywheel. Backed pushes xStocks onto Kraken, Bybit, and Solana DEXs, creating a triple-layered flywheel. Ondo uses CEX listings, wallet integrations, and arbitrage through redemption to pin prices. Swarm’s liquidity stays inside its permissioned pools, limiting growth. Synthetix once promised “infinite liquidity” via protocol mechanics, but without real markets behind it, that depth was only an illusion.
Each model shows both strength and weakness. Ondo has scale and custody rigor but limited freedom. Backed has unmatched liquidity but regulatory fragility. Swarm has the clearest compliance but no composability. Synthetix had pure decentralization but no sustainability.
FUTURE TURNING POINTS AND THE RACE TO INFRASTRUCTURE
The next two to three years may define the future of tokenized stocks. Regulation will be the first turning point. Once Europe and the US set clearer boundaries, Backed’s flexibility will be tested, Swarm’s license moat will shine, and Ondo’s multi-jurisdiction model may expand further.
The second turning point will be product depth. From bonds to large-cap stocks, ETFs, and structured baskets, whoever offers the fullest curve will hold capital longer. Ondo is racing to scale to a thousand listings, Backed has proven the series model with xStocks, and Swarm is only at the start.
The third will be frictionless infrastructure. Redemption, settlement, and arbitrage must become as seamless as clearing houses. Backed is adding proof-of-reserve and cross-chain bridges, Swarm is building redemption pools on Hedera, and Ondo is exploring its own chain to cut settlement costs.
In today’s snapshot, Ondo is best placed to win scale with “custody plus distribution,” Backed is closest to making tokenized stocks behave like stablecoins, Swarm is the safest gate for institutions, and Synthetix has left equities behind but still shapes the derivatives space.
Tokenized stocks are not just about putting assets onchain—they are about recreating the logic of markets onchain. Whoever closes the loop on compliance, custody, and liquidity has the best shot at becoming the real infrastructure of this new Wall Street.
