Unlocking Onchain Liquidity and Yield With Tokenized Stocks

Tokenized stocks have entered a new era. They are no longer just a novel way to represent equities on blockchain. They now unlock onchain liquidity and yield when used as collateral, allowing investors to stay fully exposed to assets like Tesla or Nvidia while deploying that value into the wider decentralized finance (DeFi) economy. This shift is already changing how capital moves, how collateral behaves, and how users interact with both traditional and onchain markets.

To explore this evolution in depth, Falcon Finance hosted a live X Space with two thought leaders at the center of this change: Leo, Marketing Manager at xStocks and Backed, and Artem, Chief RWA Officer at Falcon Finance. The conversation walked through the big-picture context, how tokenized stocks work under the hood, what they unlock on Falcon, and what the future might look like once most major assets live onchain.

A New Phase for Tokenized Equities

Leo began by sharing how quickly the environment has shifted. A few years ago, combining stocks and crypto would have raised eyebrows. Today, things look very different. Institutions are familiar with blockchain, there is institutional-grade custody, regulation is evolving, and users are comfortable with self-custody and trading digital-native assets directly from their phones.

In that context, tokenized stocks like xStocks are not contracts for differences (CFDs) or synthetic contracts. Unlike broker-held synthetic exposure or CFDs, which are essentially just agreements to exchange price differences, xStocks are one-to-one asset-backed digital certificates. If you hold one AAPLx or TSLAx, there is always one corresponding share held by regulated, segregated, bankruptcy-remote custodians. That structure makes them real assets onchain, not just lines of code.

Why Falcon Integrated xStocks

From Falcon’s side, Artem explained that the view is simple. DeFi should not stop at crypto-native assets. If you can hold public equities onchain in a compliant way, you should also be able to plug them into the same composability stack as Ethereum (ETH), Bitcoin (BTC), or any other crypto assets. That is the core reason Falcon decided to integrate tokenized stocks as collateral.

For USDf and Falcon users, this integration unlocks entirely new strategy types. A crypto-native user can now hold exposure to something like the S&P through tokenized instruments, while at the same time minting USDf against that position. Tokenized stocks are treated as collateral only. They sit in a segregated reserve account and are not used inside Falcon’s trading or yield strategies. Yield for USDf is generated through a diversified set of market-neutral strategies, including cross-exchange arbitrage, spot and perpetual futures arbitrage, statistical arbitrage, a core options-based portfolio, positive funding farming with staking, selective negative funding farming, and strategies designed for extreme market movements. These are described on Falcon’s transparency page. It does not depend on whether the underlying collateral is BTC, stablecoins, or equities.

Access and Distribution

Leo clarified that Backed acts as the tokenizer for xStocks. They work with a wide range of partners who offer these tokenized equities to their own user bases. Today, that includes exchanges with global reach like Kraken, which offer them in Europe and other regions, as well as wallets such as Phantom and Solflare on Solana, and Telegram-based apps and vaults. These partners work with regulators in each country to fit within local frameworks.

In terms of direct access for minting and redeeming, xStocks are available to institutional investors and qualified, verified retail investors in jurisdictions where tokenized equities are recognized under existing rules. Exact availability depends on each country’s regulatory environment, so there is no single universal list.

How It Works on Falcon

Once a user passes KYC on Falcon, using tokenized equities as collateral feels very similar to using BTC or ETH. Artem explained that Falcon’s Classic Mint has a minimum of 10,000 USDf, which means a user needs at least that much collateral value to start. In his example, around 30 TSLAx, worth roughly 13,000 USD, would meet that threshold. Falcon is currently applying an overcollateralization ratio of around 20 percent for equities, so with 30 TSLAx as collateral, a user can mint roughly 10,000 USDf.

Once USDf is minted, the user keeps their Tesla exposure and now has liquid onchain dollars. They can choose to stake this USDf to receive delta-neutral yield without doing anything else, and they can also use USDf across DeFi for liquidity provision, swaps, or restaking, depending on their risk appetite and goals. The core idea is simple: you stay on Tesla, you stay fully onchain, you stay liquid, and you can receive yield.

Turning Tesla Into Liquidity

The Tesla example neatly captures what this integration is about. As Artem described it, many investors have “precious Tesla stock” they believe could multiply over time, so they do not want to exit the position. With tokenized stocks, they do not need to. Instead, they can use that stock as collateral, mint USDf against it, and free up onchain liquidity while staying fully invested.

That liquidity can then be put to work: used in DeFi lending markets, added to liquidity pools, or deployed into more complex structures such as the strategies Falcon offers around USDf. The partnership is built around exactly this point. You keep the equity exposure you believe in, yet you are no longer forced to choose between “hold” and “sell” as the only two actions available.

Who Is Using Tokenized Stocks Today

When discussing adoption, Leo outlined three main groups. 

• First are crypto-native users, especially in Asia and Southeast Asia, who are already used to DeFi and want exposure to assets like Tesla and Nvidia without leaving crypto rails. 
• Second are CEX users, who access xStocks through partners such as Kraken and Bybit. These users benefit from what Leo called the “DeFi mullet”, where a centralized front end sits on top of a DeFi and crypto back end, combining familiar user experience with self-custody and better transferability. 
• Third are users who are used to investing in stocks or ETFs through traditional brokerage apps and are now being “brought to the light of crypto”, as Leo put it, by lower fees, real ownership, and more efficient infrastructure.

In terms of what people actually buy, Leo noted that demand naturally flows toward names users already watch in tech and crypto news. That is why there is strong demand for Tesla, Nvidia, Circle, and Coin, and growing interest in stocks like AMD and newer crypto-related stocks such as BitMine and SharpLink.

Where xStocks Are Used Beyond Falcon

The ecosystem around xStocks is already active. Leo explained that there is lending on Kamino, which allows users not only to mint against their holdings but also to borrow other assets and build long or short positions. There are pools on Raydium where users can deposit TSLAx or other xStocks alongside stable assets like USDC to earn trading fees. Primary liquidity still comes from an Request for Quote (RFQ) system through Kamino Swap or Jupiter, which integrates the Pyth Express Relay and uses market makers to keep token prices close to their underlying shares. Liquidity pools help democratize fee earnings, while RFQ remains efficient since market makers only need one side of liquidity, the underlying asset.

On the structured products side, Leo mentioned that they already have minting of USDf through Falcon and are exploring onchain ETF-like products. In practice, this means working with a partner to create bundles of tokens that provide stock market exposure through smart fee balancing, all onchain. The aim is to integrate xStocks into products that DeFi builders have been experimenting with for years, but with less volatility and more time-tested underlying assets.

Falcon’s Collateral Approach and Future Assets

Looking ahead, Artem said the direction is clear. Falcon wants to be able to take any liquid onchain asset that makes sense and use it as collateral. Right now, that means crypto, tokenized treasuries, and tokenized stocks. The next logical step is deeper fixed-income style instruments, such as short-duration notes, tokenized Collateralized Loan Obligation (CLO) tranches, and some non-USD denominated treasuries. Onchain versions of these products are getting better every month, and Falcon is watching that space closely.

The engineering challenge is to keep the system clean and robust while adding new building blocks. If done well, each new asset type increases the range of strategies users can run with USDf as the central liquidity layer.

What 2030 Might Look Like

In the closing part of the Space, the discussion zoomed out to 2030. Artem shared a view of a world where the line between traditional assets and onchain assets is basically gone. Investors will not care where the asset sits. They will care about speed, access, transparency, and how easily they can interact with a platform. Onchain infrastructure is simply better suited for the liquid parts of global markets, including large-cap equities, treasuries, credit, gold, and major currencies. In that world, Falcon’s role is to make these onchain assets usable, turning them into collateral, liquidity and programmable building blocks across DeFi.

Leo added that this is not just theory. Backed launched xStocks only four months ago and already crossed 10 billion in total volume, with thousands of users holding and trading these assets onchain. He noted that interest is coming not only from retail and crypto players like Kraken and Bybit, but also from large traditional names such as BlackRock and NASDAQ, which are publicly discussing their own tokenized equity platforms. The real question, he said, is whether the industry can maintain models that are accessible and aligned with core crypto values like transparency and accessibility, rather than pushing everything into heavily gated structures that restrict who can participate.

Closing Thoughts

By the end of the session, one theme was clear. Falcon and Backed are not just bringing equities onto blockchain. They are changing what those equities can do. A Tesla share no longer has to sit passively inside a brokerage account. In tokenized form, the same share can be held in a regulated, bankruptcy-remote structure, used as collateral, and plugged into DeFi strategies, all while the holder keeps their equity exposure.

Capital that once had to be sold in order to move can now stay invested and still become liquid. That is the core promise of tokenized stocks on Falcon: real assets, real exposure, and real yield, all onchain.

Get started on Falcon Finance here.