The xStocks craze is here, with Solana tokenized stocks market capitalization rising three times in two weeks.

According to on-chain data tracked by rwa[.]xyz, the total market capitalization of the tokenized stock market on the Solana blockchain reached $48.53 million on July 4, up from $15.28 million on June 20, a more than threefold increase in just two weeks. This growth rate far exceeded all other tracked networks during the same period.

Solana RWA market share jumps to the forefront

This growth has brought Solana's total market capitalization share in the tokenization of stocks market to 11.4%. Currently, Algorand still leads the field with $294.71 million, while XRP Ledger (XRPL) ranks second with $5.535 million. Solana's rapid growth is quickly narrowing the gap with the leaders.

Tokenization of Stock Operation Mechanism

Tokenized stocks on Solana serve as on-chain representations of traditional equity (following the SPL token standard) and complete settlement on-chain. Their prices are tracked through off-chain market making and regular collateral audits to ensure they are linked to the value of the underlying securities.

Highly centralized issuance: Backed dominates ( Backed Finance Solana issuance, centralized issuance )

The rwa[.]xyz directory lists 61 types of tokenized stocks based on Solana, all minted by the Swiss registered entity Backed Finance. Data from July 4 shows that assets issued by Backed on the Solana blockchain are valued at $48.53 million, accounting for 31% of its total cross-chain issuance of $155 million.

Products and Trading Channels

The tokenized versions of these real stocks are a product called xStocks launched by Backed, which can be traded on multiple mainstream cryptocurrency exchanges.

Issuance and Redemption Mechanism

Backed launched its first batch of Solana native staking Tokens in April this year and accelerated issuance through a permissioned mint-burn gateway. This gateway connects to regulated custodians holding the underlying stocks. Each Token is constructed as a 1:1 debt security backed by the corresponding stocks and is settled through authorized participants. After completing the KYC (Know Your Customer) process, Token holders can apply through the issuer's transfer agent to exchange their Tokens for the underlying stocks.

Market Capitalization: Connecting CeFi and DeFi

Market participants believe that this mechanism serves as a useful bridge connecting centralized broker liquidity with decentralized finance (DeFi) tools such as automated market makers (AMM) and lending protocols.

Future Outlook: Solana May Surpass XRPL

Backed Finance has publicly stated its plan to expand its Solana tokenized stock program to more stocks and exchange-traded funds (ETFs) in the second half of 2024 based on market maker demand. If the issuance pace of June is maintained, the total value of Solana's tokenized stocks is expected to surpass XRP Ledger (XRPL) in the short term, jumping to the second position in the market.