Tokenization of US Stocks: New Opportunities for Ordinary Investors

For a long time, investing in the US stock market has been a significant hurdle for ordinary people. High account opening capital requirements, complicated account opening processes, as well as regional and trading time restrictions have made it difficult for many ordinary investors to truly enter the US stock market.

However, with the emergence of tokenization of US stocks (RWA US stocks), this situation is changing. Through Web3 technology, investing in US stocks has become simpler and more accessible, allowing anyone to easily invest in top global companies with just a small amount of capital. The tokenization of US stocks is transforming the way ordinary people participate in global investments, bringing new opportunities for investors.

Advantages of Tokenization of US Stocks

24/7 Trading

Traditional US stock trading is limited to the hours when the US stock market is open, which is not friendly to non-US investors and can lead to missed investment opportunities. US stock tokenization provides a 24/7 trading environment through on-chain transactions, allowing investors to seize market opportunities at any time.

The investment threshold has been significantly lowered.

In the past, purchasing stocks of well-known companies required a large amount of capital, while tokenization of US stocks breaks high-priced stocks into smaller shares, allowing investments to be made with just a few dozen dollars, realizing the concept of inclusive finance.

Diversified investment channels

Traditional stock investments primarily generate returns from price appreciation and dividends, while tokenized assets can also participate in the decentralized finance ecosystem, such as lending and yield farming, providing investors with more diversified and effective sources of income.

Simplified cross-border investment

For many investors, traditional U.S. stock investments involve complex cross-border procedures and high capital requirements. U.S. stock tokenization greatly simplifies this process, allowing investors to invest in top global companies with just a digital wallet, effectively breaking down the barriers of geography and capital.

The Difference Between Traditional US Stocks and Tokenized US Stocks

traditional US stocks

• Directly owning company equity
• Have clear voting rights and shareholder dividend rights
• Enjoy mature regulation and legal protection

tokenization US stocks

• Typically does not have shareholder voting rights
• Dividends may be distributed in the form of tokens
• Focus more on the gains brought by price fluctuations.
• Investors need to pay more attention to the platform's security, reputation, and compliance.

Newbie Investment Guide

1. Clarify the real rights of the investment Token: Understand the asset custodian behind the Token, the nature of the assets, and whether there are specific rights such as dividends and voting rights.

2. Pay attention to the platform's security and compliance: Choose a reputable platform with strong compliance to avoid the risk of scams or platform shutdowns. Refer to community reputation, compliance documents, and regulatory information.

3. Pay attention to liquidity risk: Some token markets have a small scale, insufficient trading volume, and may have large bid-ask spreads. It is recommended to choose platforms with a large user base and good liquidity.

4. Use Leverage Trading with Caution: Novice investors should avoid blindly using high leverage to prevent unnecessary losses caused by amplified investment risks.

Introduction to Existing Platforms

Currently, multiple platforms have launched U.S. stock tokenization products in the market, each with its own characteristics in terms of compliance, trading experience, and participation threshold:

• A European trading platform: supports tokenized stocks of popular private companies, but only for EU users.
• A synthetic asset platform: Focuses on a synthetic asset model, trading on-chain price exposure rather than holding real stocks.
• A securities-type asset platform: Provides real custodial securities-type assets, aimed at qualified investors, with strong compliance.
• A certain EU licensed platform: operates under the EU licensing framework, with some products available to retail users.

Selection Suggestions

For novice investors, it is recommended to start with platforms that offer a user-friendly trading experience and transparent information disclosure, focusing on the following points:

• Does the platform actually custody the underlying stocks?
• Is there legal authorization or registration in a specific jurisdiction
• Does it support micro transactions?
• Are there withdrawal limits or lock-up mechanisms?

The product structures and risk exposures of different platforms vary, and investors should not equate tokenized products with real stocks. It is recommended to start with small, experiential products and gradually familiarize oneself with this emerging market.

Conclusion

The tokenization of US stocks has opened the door for ordinary investors to access global capital markets. Although investing has become more convenient, investors still need to participate rationally, fully understand the risks and return characteristics of the investments, and manage risks effectively. Seize the opportunity, enter the market cautiously, and make the tokenization of US stocks an important part of a prudent investment strategy.