Previously, I mentioned that xStock itself is also a pitfall, with liquidity being a complete mess and poor depth. A large number of coins and stocks cannot be settled, and many friends do not understand this. Whether it's xStock or Ribinhood, what they are doing now is merely mapping "stocks" onto the "chain."

In simpler terms, they have issued a Token that corresponds to the name of a stock, but this Token itself has no relation to the stock. It does not enjoy the liquidity of the stock, nor does it benefit from the depth of the stock; they are completely different things.

In fact, many times the price of the Token does not align with the underlying stock. The reason for this misalignment is that settlement cannot occur. Without settlement, there is no meaning to arbitrage, and naturally, there will be no price correction.

Currently, the more compliant ones are hoarding, for example, 5,000 shares of Tesla, and then issuing 5,000 shares of Tesla Token. However, these Tesla stocks and Tesla Tokens cannot be physically exchanged. If one insists that they can, it is only the issuer who can do so.

Of course, Ribinhood now supports dividends and stock splits, but settlement is still not achievable.

The future belongs to on-chain brokers, but this path is still very difficult to walk at least for now.

Decentralized Broker #DeBroker

This article is sponsored by #Bitget ｜ @Bitget_zh

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