Analysis: Why Robinhood and OpenAI Clashed over Onchain Stock Tokens
Today’s onchain equities are mostly wrappers — but native tokenization is coming.
Gm Fintech Architects —
Today we are diving into the following topics:
Summary: We examine the resurgence of tokenized stocks, with platforms like Robinhood and Kraken pushing to offer equity-like exposure onchain, despite regulatory ambiguity and the use of derivative wrappers. Robinhood’s new Arbitrum-based chain and its synthetic OpenAI equity token exemplify the neobroker race to dominate onchain capital markets, paralleling the rise of DeFi-native perpetuals and memecoins. While many current offerings are financial wrappers tied to offchain assets, players like Superstate and Securitize aim for native tokenization, where ownership, custody, and governance are all encoded onchain. The market's future hinges not on regulatory delay or wrapper complexity, but on whether onchain systems can replace legacy financial architecture entirely.
Topics: Robinhood, Coinbase, Kraken, Arbitrum, OpenAI, Backed.fi, Mirror Protocol, Terra/Luna, FTX, eToro, Hyperliquid, Securitize, Superstate, Consensys, DTCC, BNY Mellon, Jack Henry, Broadridge, Nasdaq
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Long Take
These Markets are One
There is a generational divide in finance.
Those of us who grew up with disconnected sectors of payments, banking, lending, private capital markets, public capital markets, and insurance think of all of these things separately.
Here is how finance people have been trained to think about them. Visa is the network for payments. Core banking systems, like Jack Henry, are the ledgers for deposits and loans. Portfolio management companies, like Broadridge, and custodians, like BNY Mellon, support investment management. Exchanges, like the Nasdaq, are required to trade equities, and private markets use completely different infrastructure. All of these things are disconnected, custom, and of a different type.
Imagine yourself in the 1990s, thinking about the supply chain of books, movies, and music. Imagine being convinced that there is no common interface through which will be delivered.
Of course, that’s wrong. The computer — in the shape of the smartphone today — delivers to you any and all digital media.
In the same way, financial products are transitioning from having separate supply chains with distinct technological infrastructure to a single computational architecture.
One can complain all they want about detail, regulation, and exceptions! The reality is that all of finance is going to be onchain, and there is no difference whatsoever between a commercial payment and a trading-related money transfer. There is no difference between a public or a private security being turned into a token.
They are all just financial hyperlinks moved around by the world computer.
Security Tokens Yet Again
Just earlier this week, we covered the explosion of tokenized stocks coming to market on familiar financial platforms — Robinhood for equities, and Kraken for crypto — among others. This is worth a read.
Of course, bringing equities onchain is not a 2025 idea. It’s not even a 2020 idea. Since the launch of Ethereum, the industry has been talking about capital formation, crowdfunding, and reforming the capital markets. In reaction to the wildness of the ICO boom in 2018, followed by an SEC crackdown, there was a wave of things called “security tokens”.
Here is an old 2019 chart to make the point.
These were painfully constructed, usually structured through multiple jurisdictions and entities. After the STOs (security token offerings) failed to gather interest, Decentralized Finance came into fashion. Fully onchain offerings saw billions in inflows, supported by market makers, airdrops, and centralized exchanges. Still, the investment banks continued to try rebuilding their back offices using private permissioned blockchains, which led to the term “digital assets”.
Digital assets, largely, were private securities — like real estate or debt offerings in private credit — that did not have existing capital markets. The investment banks wanted to sell these in tokenized form to find liquidity (i.e., buyers) and avoid existing financial platforms. It didn’t work, primarily because the products themselves were of low quality and DeFi had better returns.
But the DeFi sector overheated, FTX followed, and everyone got wiped out.
In response to that, we saw the rise of “RWAs” and “stablecoins” — two wrappers of existing financial products that had demand. The more conservative stablecoins are a tokenized version of a money market fund or a bank deposit. RWAs, or real world assets, tended to be large-scale treasury funds or high-quality debt with pre-existing liquidity.
For the risk-on crowd, memecoins emerged as the gambling instrument of the day.
The SEC is responsible for this abomination in the way that Alan Greenspan’s Federal Reserve is responsible for the 2008 financial crash. Greenspan underwrote an enormous amount of free money to real estate lenders and speculators. Gensler’s SEC forced token issuers to avoid any cash flows that resembled collective investment schemes, thereby seeding a market of meaningless, nihilistic drivel.
So where we are today is that the current administration symbolically lifted all restrictions on crypto innovation through the issuance of Trump’s and Melania’s own memecoins, which proceeded to get rugged (i.e., robbing the holders through market manipulation) by a criminal gang called Kelsier Ventures. Since this was deemed a nothing-burger by the regulators, everyone now has permission to do whatever they want.
One of the things that everyone wants to do is bring public stocks onchain. Like deposits, money market funds, and treasuries, public stocks are a good financial product, and people like them. There is no argument about "democratizing access to” some horrible niche alternative investments. You can just trade stocks, but faster and better!
Well, you can’t really. But we will touch on this later.
Robinhood Stole It
There are a handful of players in this market that are rushing to bring things to the consumer. Companies like Backed.fi are working on infrastructure to plug into centralized crypto exchanges.
These exchanges host millions of users, and now we are seeing around $5-10MM of volume per day in familiar equity names like Tesla and NVIDIA. It’s a useful start. One fun fact is that there used to be a thing called Mirror Protocol, from the same guys that built the Terra/Luna $40B disaster that, in turn, led to the collapse of FTX.
Mirror protocol did *exactly* the same thing as what we are now seeing with the crypto versions of stocks in 2025, but in 2021. The posture of the SEC at the time was to file lawsuits against the company and founder, because you can’t just say you are going to trade American securities without a license. But this is no longer the SEC we have in charge.