Coinbase enters the tokenized stock war

Coinbase tokenized shares went live on Base this morning.

We have four big names available from the start, namely Nvidia, Meta, Apple and Google. More launches will be coming within days and, according to Base founder Jesse Pollak, “thousands” will be targeted over time.

The tokens themselves operate 24/7 on B20the ERC-20 overhaul Base designed specifically for stablecoins and real-world assets (RWA), so this launch also serves as Base’s first real showcase using this new standard for one of its other flagship products.

Zooming in, each Coinbase tokenized share represents a 1:1 claim backed by shares held at broker-custodian Alpaca rather than functioning as a synthetic tracker like most competing products.

Thanks to the B20 architecture, dividends are managed automatically at the token level so that shares do not break if placed in DeFi as collateral, and there is also no fundamental KYC, as restrictions on US users are applied at the application level, not base-wide.

It’s a smart setup, both off-chain and on-chain, although it’s also true that Base is a little late to the party.

This delay may not matter in the long run if we are entering a tokenization supercycle, but for now there are other heavyweights to contend with here, for example Ondo Finance, which today controls ~$1 billion of the ~$3 billion tokenized stock market, followed not far behind by Kraken’s xStocks and Binance’s bStocks in size.

As Base maestro Jesse Pollak told Bankless this morning, Coinbase is certainly up for the challenge. He framed the entry like this:

“I was talking with someone and they said to me, I feel like Coinbase is the Navy. Sometimes we move a little slowly because you have to move ships around the world, but we’re always going to come, and when we come, we’re going to come strong. We’re the people you can always count on to bring the most reliable version to market.”

Slow, then overwhelming force. This This is how Base plans to close the market share gap, and in doing so, if the plans come to fruition, the chain will become a major hub for equity-centric on-chain borrowing and yield strategies. As Jesse added:

“We have all the pieces, we just need to put them together. Three years ago when we launched Base, that wasn’t the case. We didn’t have tokenized stocks yet, things were still slow and clunky. Now we have amazing wallets, amazing stablecoins, and this whole wave of tokenized assets coming. It’s a special time to be in crypto.”

All of this leads naturally to Coinbase’s growing “Everything Exchange” vision, of which Base is an important pillar and in which B20 tokenized stocks now feature prominently. On this subject, Jesse noted:

“In building the Everything Exchange, you’re not just talking about exchanging assets, but you’re talking about exchanging value. And that value can take the form of trading stocks, or it can take the form of payment for goods and services, or it can take the form of a loan or credit to someone else.

(…) We think it’s good that Ethereum is saying, “Hey, we’re going to be the world computer, maybe commerce isn’t our top priority, because that means, great, Base is going to complement that.” We maybe the Ethereum exchange. We can be the world’s exchange with Ethereum. And I think that kind of difference has been cool to be able to flesh out and start to formalize more over the last six to nine months. »

That said, as for what to watch here in the future, volumein a word. Keep an eye on whether Base DeFi giants like Aerodrome and Aave can help Base move a significant volume of tokenized stocks away from other prior notable players like Ondo and Kraken. He certainly has a fighting chance; now the task at hand is simply to keep moving forward.