Global equity tokenization is progressing in three stages, according to Grayscale head of research Zach Pandl, who said the next key development will be a DTCC pilot on Canton Network.
Pandl wrote that tokenized stocks could offer users several benefits, including 24/7 trading. The DTCC pilot, as described in the report, would allow tokenized equities and other assets to move within a regulated financial system using blockchain infrastructure.
Three models are taking shape
Grayscale said stock tokenization is likely to develop across three stages, with each one creating value for a different type of blockchain network.
Stage one: the wrapper model
The first stage is the third-party wrapper model. Under this structure, an issuer holds shares through a special purpose vehicle, or SPV, and the tokenized stock represents a claim on that SPV. Grayscale said more than 70% of tokenized stocks by market value currently use this model.
These wrapper-based tokens do not represent direct ownership of the underlying shares. Still, they can be used in DeFi and may appeal to retail investors. Grayscale said these assets are currently traded on networks including Ethereum, Solana, and BNB Chain.
Stage two: the entitlement model
The second stage is the entitlement model, which Grayscale said is represented by DTCC’s upcoming pilot. Instead of creating a new version of a security, DTCC is bringing existing eligible securities on-chain through its regulated post-trade infrastructure. Canton Network will be the first blockchain network used in that pilot.
Stage three: issuer-led issuance
The third stage is an issuer-led model in which companies issue securities natively on-chain. Grayscale cited Securitize, saying that last week it became the first public company to tokenize its own common stock at the time of its New York Stock Exchange listing.
Grayscale said this model has the greatest long-term potential, though it still requires more regulatory clarity. In the firm’s view, issuer-led tokenization would be better suited to open-architecture blockchains such as Ethereum and Solana, as well as hybrid networks such as Avalanche.
Five networks highlighted by Grayscale
Grayscale’s core argument is that tokenized stocks will not follow a single path. The three models are likely to coexist for years, it said. Based on that framework, the firm identified Ethereum, Solana, BNB Chain, Avalanche, and Canton Network as the blockchain networks most likely to benefit from growth in tokenized equities.
The report’s chart also said third-party platforms still dominate the tokenized stock market, while Ethereum, Solana, and BNB Chain account for most of the on-chain asset share.