Rob Hadick, general partner at crypto venture firm Dragonfly, stated that tokenized equities will significantly benefit traditional markets but may not deliver expected gains for the crypto industry. He shared his perspective at the TOKEN2049 conference in Singapore.
The Securities and Exchange Commission is reportedly developing plans to allow blockchain versions of stocks to trade on crypto exchanges. Financial institutions have been pushing the regulator to enable always-open markets for equities trading.
Hadick noted that institutions prefer not to operate directly on general-purpose chains. He cited Robinhood and Stripe as examples of companies building their own Ethereum blockchain infrastructure rather than utilizing existing public networks.
Financial institutions want control over their execution environments without sharing economics or block space with other assets. They seek to manage aspects including privacy settings and validator selection within their own controlled ecosystems.
The use of layer-2 networks for tokenized stocks creates value leakage, according to Hadick. He suggested benefits may not flow back to $ETH or the broader crypto ecosystem as much as many industry participants anticipate.
If institutions construct their own layer-1 blockchains, the flow of value into the rest of the crypto ecosystem becomes even less clear. Several private permissioned blockchains have launched and failed in previous years, but hybrid chains offering company control with permissionless options represent where most institutions currently focus.
Hadick's assessment contradicts the prevailing narrative promoted by figures including Fundstrat's Tom Lee, VanEck CEO Jan van Eck, and Consensys founder Joseph Lubin. These industry leaders project that Wall Street and traditional finance moving on-chain will generate massive benefits for Ethereum and lift the broader market.
Fund issuers and exchanges, including VanEck and the New York Stock Exchange, have recently met with the SEC to discuss tokenized equities. Nasdaq filed for a rule change in September to allow listing and trading of tokenized stocks on its platform.
Ethereum Tokenized stocks represent a nascent sector within real‑world assets, comprising just $735 million or 2.3% of the market share according to RWA.xyz data. The small current footprint leaves significant room for growth as regulatory frameworks develop.