1 00:00:14,230 --> 00:00:18,228 [HOST] This is X1 Report. It's Saturday morning, and the New York Stock Exchange is closed. It 2 00:00:18,228 --> 00:00:22,179 won't open again until Monday. Yet this morning a token that tracks one share of Apple 3 00:00:22,179 --> 00:00:26,315 traded on Solana for three hundred thirty-nine point eight nine dollars, a few dimes under 4 00:00:26,315 --> 00:00:30,266 Friday's close. Nobody rang a bell, and the market never stopped. Today we explain the 5 00:00:30,266 --> 00:00:33,942 tokenization supercycle through stocks, for people who have never owned a token. 6 00:00:34,192 --> 00:00:39,475 [ANALYST] Start with the words. A token is a record of ownership on a blockchain, a shared ledger 7 00:00:39,475 --> 00:00:44,879 that anyone can read and nobody can quietly edit. A supercycle is a shift that outlasts a 8 00:00:44,879 --> 00:00:50,162 normal boom and bust, because it changes how capital moves. Solana Foundation president 9 00:00:50,162 --> 00:00:55,323 Lily Liu defines the token supercycle as the long-term migration of money, assets and 10 00:00:55,323 --> 00:00:58,299 ownership onto always-on internet infrastructure. 11 00:00:58,549 --> 00:01:02,651 [HOST] Here's the surprise most investors don't know. If you own Apple through a brokerage app, 12 00:01:02,651 --> 00:01:06,801 your name is not on Apple's list of shareholders. The name there is Cede and Company, the 13 00:01:06,801 --> 00:01:10,903 nominee of the Depository Trust Company, or DTC. Your broker keeps its own book, and you 14 00:01:10,903 --> 00:01:15,006 are an entry in it. DTC held more than one hundred trillion dollars of securities in its 15 00:01:15,006 --> 00:01:16,405 custody in twenty twenty-five. 16 00:01:16,655 --> 00:01:21,882 [ANALYST] And that system was the fix for a crisis. In nineteen sixty-eight, trading outgrew the 17 00:01:21,882 --> 00:01:27,171 paper stock certificates that had to be carried between brokers. Certificates were lost 18 00:01:27,171 --> 00:01:32,520 and stolen, and the New York Stock Exchange closed every Wednesday from June to December 19 00:01:32,520 --> 00:01:37,929 just to catch up. Dozens of brokerages failed. The answer, in nineteen seventy-three, was 20 00:01:37,929 --> 00:01:43,400 DTC: one vault, one central ledger. Stocks have been digital for fifty years. What changes 21 00:01:43,400 --> 00:01:45,406 now is whose ledger they live on. 22 00:01:45,656 --> 00:01:49,609 [HOST] So what actually changes when a share becomes a token? First, the market stops closing. 23 00:01:49,609 --> 00:01:53,608 The US regular session runs six and a half hours a day, roughly one thousand six hundred 24 00:01:53,608 --> 00:01:57,424 thirty of the year's eight thousand seven hundred sixty hours. That's under nineteen 25 00:01:57,424 --> 00:02:00,696 percent. A tokenized share can trade whenever someone wants to trade it. 26 00:02:00,946 --> 00:02:06,030 [ANALYST] Second, settlement shrinks from a day to seconds. A US stock trade settles one business 27 00:02:06,030 --> 00:02:11,230 day after you click buy, and until then clearing houses demand collateral in case someone 28 00:02:11,230 --> 00:02:16,255 fails. On the twenty-eighth of January, twenty twenty-one, at the peak of the GameStop 29 00:02:16,255 --> 00:02:21,280 frenzy, Robinhood faced a collateral demand of about three billion dollars and stopped 30 00:02:21,280 --> 00:02:26,305 customers from buying the stock. On a blockchain the share and the payment move in one 31 00:02:26,305 --> 00:02:28,993 transaction. Either both move or neither does. 32 00:02:29,243 --> 00:02:33,238 [HOST] Third, access. Sixty-two percent of Americans owned stock in twenty twenty-five, but only 33 00:02:33,238 --> 00:02:37,189 twenty-eight percent of households earning under fifty thousand dollars did. A token can 34 00:02:37,189 --> 00:02:41,184 be bought in fractions for a few dollars, from a phone, anywhere. Fourth, a share becomes 35 00:02:41,184 --> 00:02:44,954 a building block. On Solana, the lending protocol Kamino accepts tokenized stocks as 36 00:02:44,954 --> 00:02:48,859 collateral, so you can borrow dollars against an S and P five hundred token at three in 37 00:02:48,859 --> 00:02:49,937 the morning on a Sunday. 38 00:02:50,187 --> 00:02:55,791 [ANALYST] How big is this today? Tiny. RWA dot xyz counts three point one four billion dollars of 39 00:02:55,791 --> 00:03:01,523 tokenized stocks, held by three point nine nine million addresses, up seventy-two percent 40 00:03:01,523 --> 00:03:06,870 in thirty days. Global stock markets were worth one hundred fifty-seven point eight 41 00:03:06,870 --> 00:03:12,474 trillion dollars. So tokenized stocks are about zero point zero zero two percent of the 42 00:03:12,474 --> 00:03:18,207 world's equity. Two dollars in every hundred thousand. Every structural shift starts as a 43 00:03:18,207 --> 00:03:19,173 rounding error. 44 00:03:19,423 --> 00:03:23,525 [HOST] Solana became the home of the retail market. xStocks, issued by Backed, went live on 45 00:03:23,525 --> 00:03:27,823 Solana in July twenty twenty-five. A year later it counts thirty-five billion dollars of 46 00:03:27,823 --> 00:03:31,876 total transaction volume. The reason is practical: a stock market needs cheap, fast 47 00:03:31,876 --> 00:03:36,174 transactions and cash on the same ledger. Solana holds sixteen point six billion dollars 48 00:03:36,174 --> 00:03:39,348 of stablecoins, and the exchanges and lenders were already there. 49 00:03:39,598 --> 00:03:45,254 [ANALYST] Now the part most explainers skip. Tokenized stock means three different things. Tracker 50 00:03:45,254 --> 00:03:51,038 tokens, like xStocks, follow the price and pass on dividends, but give you no vote. Native 51 00:03:51,038 --> 00:03:56,758 tokenized shares are issued by the company itself, as Securitize did with its own equity. 52 00:03:56,758 --> 00:04:02,349 And exchange-tokenized shares are the old system tokenizing itself, under rules the SEC 53 00:04:02,349 --> 00:04:08,069 approved for Nasdaq in March. Retail trades the first kind. Institutions are building the 54 00:04:08,069 --> 00:04:08,712 other two. 55 00:04:08,962 --> 00:04:13,328 [HOST] And here's the strangest fact. Tokenized stocks are export products. xStocks are not 56 00:04:13,328 --> 00:04:17,642 offered to US persons. And the London Stock Exchange's plan to tokenize the hundred 57 00:04:17,642 --> 00:04:22,268 largest UK companies will reach investors in more than one hundred ten countries, but not 58 00:04:22,268 --> 00:04:25,282 UK investors. The limit isn't technology. It's permission. 59 00:04:25,532 --> 00:04:30,255 [ANALYST] That permission started to arrive on the seventeenth of September. The SEC issued an 60 00:04:30,255 --> 00:04:34,921 Innovation Exemption that lets new venues trade tokenized US stocks in permissioned 61 00:04:34,921 --> 00:04:39,756 liquidity pools. The conditions are strict. Only verified wallets, no leverage, trades 62 00:04:39,756 --> 00:04:44,478 published within ten minutes, and the token must carry the same rights as the share, 63 00:04:44,478 --> 00:04:49,425 including the vote. It points toward native and exchange-tokenized shares, not trackers. 64 00:04:49,675 --> 00:04:53,643 [HOST] So what will it take? The token has to be the share. Home markets have to let their own 65 00:04:53,643 --> 00:04:57,702 investors in. Cash has to live on the same ledger. One stock should mean one market, when 66 00:04:57,702 --> 00:05:01,625 today RWA dot xyz lists seven thousand six hundred ninety-one tokenized stock products 67 00:05:01,625 --> 00:05:05,638 that mostly can't be swapped for each other. Prices need an anchor outside market hours. 68 00:05:05,638 --> 00:05:09,195 Corporate actions have to travel with the token. And custody has to be boring. 69 00:05:09,445 --> 00:05:14,566 [ANALYST] The share can already travel. X1, a separate blockchain running the same Solana Virtual 70 00:05:14,566 --> 00:05:19,863 Machine, connects to Solana through the Warp bridge. Your xStock is locked on Solana and a 71 00:05:19,863 --> 00:05:24,866 matching token is minted on X1, with five of seven guardians approving each side. Ten 72 00:05:24,866 --> 00:05:30,104 stocks are live. About four thousand three hundred dollars of shares have been bridged so 73 00:05:30,104 --> 00:05:34,341 far, and on X1 a farm even pays liquidity providers in tokenized stocks. 74 00:05:34,591 --> 00:05:39,147 [HOST] It's small and weeks old, and liquidity on a new route is thin until providers arrive. But 75 00:05:39,147 --> 00:05:43,653 it shows the supercycle in miniature. The shares were issued once, on Solana. X1 extended 76 00:05:43,653 --> 00:05:48,209 their reach with a bridge instead of years of agreements. Solana stays the primary market. 77 00:05:48,209 --> 00:05:49,525 X1 is an extension market. 78 00:05:49,775 --> 00:05:54,474 [ANALYST] The bottom line: the record of who owns a company is moving from private ledgers that 79 00:05:54,474 --> 00:05:59,395 close at four p m to a shared ledger that never closes. Watch for three things: tokenized 80 00:05:59,395 --> 00:06:04,150 shares that carry votes, brokers offering them in their home countries, and one ticker 81 00:06:04,150 --> 00:06:08,960 meaning one market again. When all three are true, a share is simply software. The full 82 00:06:08,960 --> 00:06:12,388 explainer, with charts, is on X1 Report. Thanks for listening.