Tokenized S&P 500 are also in the tens of millions, with SPYx showing a market capitalization of just over $10 million and 9,886 holders.
Despite the explosive growth of tokenized assets issued on Solana, xStocks investors are not interacting with DeFi protocols that have made these assets composable.
Although their collective market cap stands at nearly $50 million, only $585,000, roughly 11%, has been used as collateral so far.
The SPYx with most liquidity also displays a significant amount of $1.9 million in liquidity, with $502,000 worth of tokenized stocks on it.
Nevertheless, the ratio remains short. The roughly $637,000 worth of TSLAx tokens used on DeFi is just 4.7% of its market cap. For SPYx, the ratio is 7%.
The relatively low usage of tokenized stocks on DeFi applications occurs mainly because money is mostly flowing from crypto to traditional products, rather than the other way around.
Michael Cahill, CEO and co-founder of Douro Labs, explained in an interview with CryptoSlate that holders from the traditional market who are entering the crypto space are not yet ready to utilize DeFi composability.
He used the Apollo Diversified Credit Securitized Fund (ACRED), launched by Pyth and created by Apollo Global Management and Securitize, as an example to illustrate that the issue of wasted composability still affects the entire tokenization industry.
ACRED has over $100 million in net asset value, yet its on-chain lending pool represents only a small fraction of this value.
However, Cahill also said he sees growth potential. He added:
“But it’s just getting started. We didn’t have xStocks last year. The last time we saw anyone making a meaningful attempt at stocks was Mmirror back in the Terra days, and it wasn’t even that big either. It’s taken a really long time for people to get comfortable with this, but I think that that’ll start very gradually and then people will get a little bit more and more comfortable.”
Furthermore, he believes a Strategy-style “big company moment” could help, but thinks the real catalyst will be the product experience with a traditional finance interface for on-chain products.
Cahill concluded:
“When you get one of those barriers to fall, then you can start to really see it grow together and explode way faster than that whole ramp-up we had with Strategy. It could happen very, very quickly in my mind.”
