Tokenized equities may transform traditional finance, but their advantages for the broader crypto ecosystem remain questionable, according to Dragonfly’s Rob Hadick.
Tokenized stocks — long touted as the bridge between Wall Street and Web3 — may offer traditional financial institutions a more efficient market structure, but could fail to deliver the windfall many expect for crypto networks like Ethereum.
Earlier coverage: Crypto Funds See $812M Outflows, But Solana Defies Trend With $291M Inflows
Speaking at TOKEN2049 Singapore, Rob Hadick, general partner at crypto venture firm Dragonfly, said tokenized equities will undoubtedly reshape traditional finance, but the benefits may be contained.
“There’s no doubt it has a big effect on TradFi. They want 24/7 trading, it’s better for their economics,” Hadick told Cointelegraph. “But institutions don’t want to be directly on these general-purpose chains.”
Rob Hadick speaking to Cointelegraph at TOKEN 2049. Source: Andrew Fenton/Cointelegraph
He explained that firms like Robinhood and Stripe are building their own blockchains rather than using Ethereum or other public networks, motivated by a desire to control privacy, validators, and execution environments.
Institutions Push for Control
Hadick argued that institutional adoption of tokenized assets on private or semi-private blockchains could create “leakage,” limiting how much value flows back into Ethereum or the wider crypto space.
“If tokenized stocks end up on layer-2s, or even worse, their own custom-built chains, the benefits to the crypto ecosystem become less clear,” he said.
This vision contrasts with the bullish narrative of figures like Fundstrat’s Tom Lee, VanEck CEO Jan van Eck, and Consensys founder Joseph Lubin, who believe Wall Street’s shift onchain will significantly boost Ethereum.
While many permissioned chains have failed in the past, Hadick suggested hybrid models — where companies control their own layer-1s or layer-2s but maintain an option to be interoperable — are the preferred path forward.
SEC Moves Closer to Tokenized Equities
The U.S. Securities and Exchange Commission (SEC) is reportedly weighing frameworks to allow blockchain-based versions of stocks to trade on crypto exchanges, following lobbying from major financial institutions for always-open markets.
In September, Nasdaq filed for a rule change to list and trade tokenized equities, while issuers like VanEck have also engaged with the regulator.
Despite the buzz, tokenized stocks remain a tiny sector. According to RWA.xyz, tokenized equities currently account for just $735 million in value — about 2.3% of the total real-world assets (RWA) market onchain.