Three Paths of CEX US Stock Products: Tokenized, Synthetic, and API Routing
Crypto exchanges advertise US stock trading, but users actually receive three alternatives: tokenized spot (e.g., ERC-20 wrapped stock tokens), synthetic perpetual contracts (derivatives tracking prices), and API routing to real stock markets via traditional brokers. In the first two cases, users hold no stock ownership—only internal IOUs from the exchange.
Alpaca's Clearing Monopoly and Five-Layer Equity Evaporation
The tokenized model relies heavily on clearing broker Alpaca, which commands a 94% market share, creating a de facto monopoly. The five-layer architecture (user → exchange → token issuer → clearing broker → custodian → DTCC) strips away multiple rights: voting power is nullified, dividends are paid contractually rather than as a shareholder benefit, and SIPC (Securities Investor Protection Corporation) coverage is absent. If Alpaca or any intermediate layer fails, user assets face systemic risk.
DTCC's Compliant Tokenization May Reshape the Landscape
Notably, DTCC (Depository Trust & Clearing Corporation) is preparing to launch a compliant tokenization service that allows real stocks to be issued and traded on blockchain while preserving shareholder rights and regulatory protections. If this service materializes, current non-compliant tokenized products on CEXs could be disrupted, potentially reshaping the industry structure.