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1. Tokenized U.S. stocks vs a traditional broker

Compared with the traditional model of paperwork, fixed trading hours and custodians, tokenization offers simpler and faster access to global financial assets. It also brings new risks, explained below.

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2. Tokenized U.S. stocks vs other crypto products

  • Stablecoins (USDT, USDC). Stablecoins are mainly used to hold a dollar value or to pay. Tokenized stocks and ETFs track the price of real-world assets instead, so their value moves up and down with those assets.
  • Staking (ETH, SOL and others). Staking rewards depend on the network and on the price of the staked coin. Tokenized stocks are linked to traditional assets, so their performance depends on the stock market rather than on crypto prices alone.
  • DeFi lending and liquidity. These can carry risks such as collateral swings, forced liquidations and smart-contract failures. Tokenized stocks are backed by real-world assets held through Ondo, but they still carry smart-contract, issuer and liquidity risk.

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The risks to keep in mind

  • Market risk. Stock and ETF prices can fall, sometimes sharply. You can lose some or all of what you invest.
  • Token vs underlying. The token is not the share itself and may not track it exactly.
  • Issuer and custody. If Ondo or a custodian has problems, the token’s value can be impaired.
  • Liquidity. You may not be able to sell at the price you want, especially outside U.S. market hours.
  • Smart contracts and execution. Bugs, exploits, front-running or slippage can affect your trade.
  • No insurance. Tokens are not covered by any deposit or investor protection scheme.
Full list: section 7 of the Tokenized Securities Terms. No return is guaranteed. This page is information only and is not financial advice.
Tokenized U.S. stocks can be one way to diversify a digital portfolio with exposure to the traditional economy, held on-chain in your own wallet. Whether they fit you depends on your own situation, so consider independent advice before investing.