NYDIG Research Director: Tokenization of Stocks Will Not Immediately Bring Huge Profits to Crypto Market, Benefits Will Gradually Emerge

In a report released on Friday, NYDIG's Global Research Director Greg Cipolaro pointed out that the tokenization of stocks will not immediately bring huge profits to the crypto market, but if such assets can be better integrated with blockchain, the benefits will gradually emerge.

The networks on which these assets are based (such as Ethereum) initially generate modest profits, but as the accessibility, interoperability, and composability of the assets increase, profits will grow in tandem, Cipolaro wrote in the report. He added that initial profits mainly come from transaction fees generated by tokenized asset trading, and the blockchains that support these assets will also enjoy increasing network effects due to storage demand.

In the future, these real-world assets may be integrated into decentralized financial ecosystems as collateral for lending, lendable assets, or trading targets, Cipolaro said, but this will take time and will only be possible after technological development, infrastructure improvement, and regulatory rules evolve.

He also pointed out that building tokenized assets with composability and interoperability is not easy, as their forms and functions vary greatly and are distributed across public and private networks. For example, the private blockchain Canton Network created by Digital Asset Holdings currently hosts $380 billion worth of tokenized assets, representing 91% of the total value of real-world assets. Ethereum, as the most mainstream public blockchain, has deployed $12.1 billion worth of real-world assets.

Cipolaro emphasized that even in open networks like Ethereum, the design of tokenized assets can vary significantly. These assets typically fall under the category of securities and still rely on traditional financial structures such as brokers, KYC/qualified investor verification, whitelisted wallets, transfer agents, etc. However, he also stated that companies are leveraging blockchain technology to achieve advantages such as near-instant settlement, 24/7 operation, programmable ownership, transparency, auditability, and collateral efficiency optimization.

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