More than 60 U.S. stocks including Nvidia and Tesla are headed onchain. Here’s how it works
In this news:
Key takeaways
- Over 60 U.S. stocks like Nvidia and Tesla are heading onchain.
- Investors will use stablecoins such as USDC, USDT, and USDG to buy tokenized shares.
- Trades will execute through blockchain-based automated market makers instead of traditional order books.
Take Nvidia. Instead of buying the stock through a traditional brokerage account and having the trade processed through the legacy stock-market system, an investor on OKXICE would buy a digital token representing an entitlement to an Nvidia share.
The filing said the underlying stock would be held by a registered broker-dealer on a one-for-one basis, meaning one Nvidia token would be backed by one Nvidia share. Token holders would also be entitled to the economic and shareholder rights that come with the stock, including dividends and voting rights.
How it works
Rather than paying in dollars, investors on the new platform would buy and sell tokenized stocks using digital dollars known as stablecoins. OKXICE plans to support USDC, USDT and USDG, three cryptocurrencies designed to maintain a $1 value.
There also won't be the traditional system of matching a buyer's order with a seller's order. Instead, the stock tokens and digital dollars will sit in blockchain-based pools that investors can trade against. Buying Nvidia tokens takes them out of the pool and adds digital dollars, pushing the price higher. Selling does the reverse.
The pools, known in crypto as automated market makers, or AMMs, use rules to determine the price at which investors can buy and sell. More sophisticated versions can also allow professional trading firms to actively adjust prices and the amount of stock available, potentially making the market behave more like a conventional exchange.
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