The venue with credible in-kind redemption captures most of the trading, because arbitrage pins its token price to the listed share and market makers quote tightest there. Apps that own the user decide where each order goes. Chains that host the issuer collect the volume once stock tokens become the asset that other on-chain trades are priced in.
How does a tokenised stock work?
Three parties make one work. An issuer creates a token that tracks a listed share. A custodian holds the real shares that back the tokens one to one. Market makers mint new tokens when demand rises and burn them when it falls, and holders can redeem.
Robinhood's Stock Tokens show the details. They are tokenised debt securities issued by Robinhood Assets (Jersey) Limited, and they give economic exposure to the share without legal or beneficial rights in it (Robinhood docs, October 2026). Only Authorised Participants can subscribe for new tokens from the issuer, after KYB onboarding. At issuance there was one. Mint and burn orders run from Monday 02:00 CET to Saturday 02:00 CET.
The form of redemption decides a great deal. Cash redemption pays out the value of the share. In-kind redemption hands over the share itself. Frictionless Capital describes each Backpack SpaceX token as backed by an actual share held at a US regulated broker and owned by the holder under New York law (Frictionless Capital, 24 September 2026). Robinhood announced plans for in-kind redemption and voting on 14 September 2026, and its tokens offered neither at that date (Crypto Briefing, 14 September 2026).
Why does in-kind redemption pull trading to one venue?
It turns any gap between the token and the share into a trade with a known exit. If the token trades below the share, a trader buys tokens, redeems them for shares and sells the shares. If it trades above, the trade runs the other way. The on-chain price stays close to Nasdaq, so market makers can quote tight spreads with little inventory risk, and takers follow the tight quotes.
Frictionless Capital's figures, from an investment thesis written in favour of Backpack, show the effect (all as of 24 September 2026):
| Measure | Venue with in-kind redemption (Backpack) | Comparison |
|---|---|---|
| Share of all tokenised stock held | About 4% | xStocks: 68% |
| Share of tokenised stock trading | 64% | xStocks: less than half of volume |
| Cost of a $1,000 to $5,000 order | 0.9 basis points | Robinhood's chain: 10.3 basis points |
| Volume change, week of 18 September 2026 | Added $193 million | Robinhood: lost $1.4 billion |
The order costs come from Blockworks Research, which priced two weeks of real orders in September 2026, as cited in the same article. We have not checked these figures against on-chain data.
The point for a revenue leader: float share and trading share are separate numbers. The issuer with the most tokens outstanding can still lose the volume to a venue with a better exit.
The market is small and early. Frictionless puts all tokenised shares at roughly $2.5 billion against a $69 trillion US stock market, which works out to under 0.01% by our arithmetic. It also reports that 55% of tokenised stock trading happens outside American market hours, and that Backpack's SpaceX token did $1.08 billion of volume in its first month.
What happens when stocks become the asset other trades settle in?
Volume moves to the chain where the stock token is the quote asset. From mid-July 2026, launchpads on Robinhood Chain let anyone issue a memecoin paired against stock tokens across more than 90 tickers, and memecoins trading against tokenised NVDA, TSLA, INTC, RBLX and SPCX entered the chain's top 100 pools (crypto.news, 30 July 2026). The same report says Robinhood Chain passed Solana in tokenised stock volume.
Follow one purchase. A buyer holds ETH and wants a memecoin priced in tokenised NVDA. A router sells the ETH for the NVDA token, then sells the NVDA token for the memecoin, inside one transaction. The buyer never chooses to trade a stock, yet each purchase counts as stock token volume. When the pools hold enough stock tokens, market makers mint more, and minting means buying real shares. Demand for a memecoin turns into demand for the underlying share.
The limit sits in the mint window. Robinhood's window closes at 02:00 CET on Saturday, so supply stays fixed through the weekend while trading continues. Prices can drift from Friday's close until market makers can mint and burn again.
Who captures distribution?
Three positions collect most of the value, and each controls a different decision.
| Position | What it controls | What to check before you commit |
|---|---|---|
| Redemption venue | The cheapest exit to the real share | Redemption form (cash or in kind), who may redeem, KYC terms |
| App that owns the user | Which venue fills each order | Routing logic, fill quality, who sets the default venue |
| Chain that hosts the issuer | Where minting happens and which pairs use stock tokens as the quote asset | Number of Authorised Participants, mint window, pairs live |
Apps carry more weight than their market share suggests. Solana Legend argued on 30 August 2026 that finance apps will outsource liquidity, execution and settlement to on-chain venues, and that users of trading apps already route to on-chain liquidity without knowing it (X post, 30 August 2026). Solana Legend also expects a repeal of SEC Rule 611 to make brokers prove best execution across fragmented venues, on-chain ones included. That repeal is a forecast, and no such rule change is final today.
Venues that list tokens without redemption rights and without their own users sit in the weakest spot. They compete on spread against a venue whose spread arbitrage holds down.
We covered the wider distribution question for open financial rails in who wins distribution when anyone can run a bank.
What should a team entering tokenised equities do now?
Pick a position first, then buy or build the rest. Use this list:
- Read the redemption terms before the listing terms. Ask whether holders redeem in cash or in shares, who may redeem, and how long it takes.
- Count the Authorised Participants. One participant means one firm sets supply. Ask your issuer for the roster and the mint window.
- Price the weekend. With 55% of trading outside US market hours (Frictionless, September 2026), decide how your product quotes and margins positions while the underlying is shut.
- Make stock tokens a quote asset in your product. Pairs, collateral and payments priced in a stock token route volume through it.
- Own the routing decision. If you own the user, send orders to the venue with the best measured fill, and publish fill quality to win broker and wallet partners.
- Choose the chain where issuers mint. Volume follows minting and quote-asset pairs, so list where the issuer and its market makers already operate.
- Track venue share weekly. Robinhood's weekly tokenised stock volume fell $1.4 billion in the week of 18 September 2026 (Frictionless). Review venue share every week and move quotes and listings when it shifts.
Your first buyers are the brokers, wallets and market makers who will route, quote and mint, and each picks partners early. Infrastructure teams win them one integration at a time, as covered in how blockchain infrastructure protocols grow market share.
To map the brokers, wallets and market makers in your segment and rank them for outreach, start with The Diagnostic at $2,500.