Layer One: NYSE and Nasdaq prime tokenized stocks for trillion-dollar growth

Layer One•March 26, 2026, 2:31AM EDT
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Layer One: NYSE and Nasdaq prime tokenized stocks for trillion-dollar growth
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Welcome to Layer One: the newsletter and podcast on the intersection of crypto and the real world. Hosted by Steven Gates and Kelvin Sparks, Layer One brings you inside the conversations driving blockchain forward.

In last week's episode, we were joined by Niklas Kunkel, CEO of Chronicle, and Rhett Shipp, founder of Avant, to discuss the future of DeFi and how tokenized equities could bring millions of investors onchain.

In this edition of the Layer One newsletter, we're taking a look at how the United States' two biggest exchanges are adopting tokenization, opening the door for trillions of dollars in potential onchain TVL.

NYSE and Nasdaq prime tokenized stocks for trillion-dollar growth

This week, the New York Stock Exchange announced a partnership with Securitize to build a 24/7 tokenized securities trading platform: a major stride in bringing traditional equities onto blockchain rails. The tokenization giant previously won a commission from the EU to build a pan-European securities settlement layer on top of the Avalanche blockchain.

Now they’ll also be establishing pipelines which could theoretically bring trillions of NYSE stocks and ETFs onchain in the coming years. This comes just one week after the SEC approved a pilot scheme for tokenized equities trading on the Nasdaq: both strong signals that the tokenization trend is only set to accelerate.

A significant number of traditional finance institutions have come to recognize how tokenization can improve legacy trading infrastructure: near-instant settlement, 24/7 trading and minimal fees. BlackRock CEO Larry Fink last week compared this to the leap between postal mail and email.

I think having the ability to trade equities 24/7 is gonna cause a massive onchain flood. [...] It’s such a big deal that equities are going to all be onchain relatively soon, because if you're not trading onchain, you're going to miss significant opportunity.

– Rhett Shipp
 

Of the dozen or so firms spearheading the tokenized equities trend, Ondo Finance is the clear leader. Rising to prominence last year, the platform now boasts over $500 million in tokenized equities: more than half of the entire ~$1 billion category. Just this week, trillion-dollar asset management firm Franklin Templeton announced plans to tokenize a further five stocks and commodities ETFs through the firm.

Overall, the nascent tokenized stocks sector has seen some of the most impressive growth among RWAs, rising over 100% since this same time last year. However, it remains dwarfed by the likes of US Treasury debt funds (~$12 billion) and commodities (~$5.5 billion).

Nonetheless, with both of the world’s two biggest exchanges actively moving towards tokenized settlement, the remaining growth potential is significant. The NYSE and Nasdaq are currently the sources for the vast majority of tokenized stocks, but only a tiny sliver of their total assets have been brought onchain so far.

Of the current top 50 tokenized stocks (representing ~80% of total volume), around $413 million were sourced from the NYSE and $334 million from the Nasdaq. In both cases, the figures represent less than 0.001% of each exchange’s total market cap.
 
This means there's still trillions more that can move onchain.

As our podcast guests pointed out last week, this becomes especially interesting for crypto natives when tokenized equities begin seamlessly plugging into DeFi. This sort of interoperability appears to be a core objective for the Nasdaq, which this week partnered with Payward (parent company of Kraken) to build an “equities transformation gateway” bridging decentralized networks and regulated traditional markets.

The system will make use of Kraken’s xStocks framework — itself the second-largest tokenized equities outlet with ~$225 million in asset volume — to allow users to permissionlessly move their tokenized assets between the DeFi and TradFi spheres. If they can truly cross this divide then there might be no stopping the RWA rally.

Podcast Recap: Why tokenized assets are DeFi’s biggest unlock

This week we were joined by Niklas Kunkel, CEO of Chronicle, and Rhett Shipp, founder of Avant, to discuss DeFi's path to trillion-dollar TVL, the growth of tokenized stocks and how to survive the ups and downs of being a crypto founder.

Subscribe to Layer One on Youtube, Apple, Spotify or wherever you get your podcasts.

In the Headlines: The stories driving the conversation this week

  • USDC issuer Circle’s stock dropped almost 20% this week, as draft Clarity Act yield restrictions rattled investors. CRCL — one of the most prominent tokenized equities with $150 million issued across xStocks and Ondo — dropped from ~$126 to $100 on Tuesday. Financial services firm Bernstein argued the panic is misdirected, as the draft bill’s provisions relate to middle-men such as exchanges, rather than stablecoin issuers themselves.
  • The NYSE has announced the imminent launch of a Morgan Stanley bitcoin ETF. The financial services firm, which holds upwards of $6 trillion of assets under management, will become “the first bank to do a Bitcoin ETF” as noted by Bloomberg analyst Eric Balchunas. They will be joining the ranks of Blackrock, VanEck and Fidelity, all of which have launched BTC exchange-traded funds in recent years.
  • Avalanche’s Build Games hackathon has progressed to the final stages, with 20 projects making it to “pitch day.” These businesses, hewn down from a field of 2,000 applicants, are vying to win one of three grand prizes from a $1 million total prize pot. The projects mentored throughout the the contest will begin hitting the market within the coming weeks. 

Top of the Charts: Ondo's rise doubled the size of the tokenized stocks category in under a year

Keep up with the latest in tokenization, DeFi, and institutional adoption by subscribing to Layer One's weekly market insights.

Layer One is brought to you in collaboration with Avalanche.


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