Moments' narrative "a passing trend" is not as good as trading US stocks on DEX

Author: Seed.eth

“On-chain US stocks” is not a new concept, but in the context of the recent crypto market weakness and lack of clear direction among mainstream tokens, this sector remains a hot trading ground.

Over the past year, many projects have attempted to bring US stock indices, bond yields, or even individual stocks onto the blockchain. However, most of these products remain in the “shadow asset” stage: either their prices heavily depend on oracle machines, or trading depth is insufficient, or there is a significant price gap with traditional markets, making them hard to be considered truly “substitutable markets.”

Hyperliquid’s HIP-3 upgrade seems to be a turning point. This upgrade technically enables permissionless creation of native on-chain order books for perpetual markets, to some extent ending the reliance on synthetic assets or oracle-driven models for traditional asset trading on the chain. It offers an alternative way to build an on-chain market with self-discovering prices and independence.

Take TradeXYZ’s XYZ100 as an example: since launch, its trading volume has continued to rise, with daily transaction volume stabilizing at hundreds of millions of dollars, and the open interest limit increasing from an initial $25 million to $60 million.

Background

TradeXYZ, as a native protocol incubated within the Unit ecosystem on Hyperliquid, focuses on tokenizing real-world assets (RWA)—such as US stocks and indices—and bringing them into on-chain trading scenarios. The protocol supports both spot and perpetual futures trading modes, integrating Unit Protocol for liquidity and settlement of spot assets. Users can deposit, withdraw, and trade using USDC. Its core product is a stock-equity perpetual contract built on the HIP-3 standard, aiming to connect traditional financial markets with decentralized trading experiences.

XYZ100 is a fully on-chain CLOB (Central Limit Order Book) model, supporting up to 20x leverage and 24/7 trading. Prices are anchored to Nasdaq futures oracle from CME (Chicago Mercantile Exchange), with an 8-hour EMA (Exponential Moving Average) smoothing during non-trading hours to avoid sharp fluctuations.

HIP-3 was officially launched around October 13, 2025. TradeXYZ nearly simultaneously released XYZ100, initially accessible only to the top 100 whitelist users (those with over $5 million trading volume on Hyperliquid) for alpha testing.

Within just two days, XYZ100’s trading volume exceeded $630 million, with open interest reaching $150 million, far surpassing other RWA perpetual contract DEXs.

Why are crypto traders turning to US stocks?

First, the “high volatility and low certainty” of crypto is being overshadowed by the “steady growth” of US stocks: although BTC shows signs of institutional accumulation, the October 11 leverage crash still leaves retail investors wary.

Meanwhile, the US stock market is on a rising trend, with the S&P 500, Dow Jones, and Nasdaq indices hitting record highs for three consecutive trading days this week. At the same time, on-chain trading platforms are attracting global investors with their unique advantages: 24/7 trading, no KYC required, up to 20x leverage, allowing users from Asia, Europe, and other time zones to adjust positions anytime, completely breaking free from the T+1 settlement mechanism and weekend market closures of traditional markets.

However, traditional Nasdaq E-mini futures on CME still have a daily trading volume of hundreds of billions of dollars, whereas the on-chain asset scale remains a “decimal point” figure by comparison.

On-chain US stock sector competition

As this wave heats up, the entire on-chain US stock ecosystem is evolving rapidly, with multiple protocols entering the market from different angles:

On Solana and BNB Chain, xStocks offers over 80 US stock/ETF spot trading pairs through its alliance ecosystem, supporting users to collateralize tokens of Apple or Tesla for borrowing. The protocol has accumulated over $2 billion in trading volume, accounting for 58.4% of the tokenized stock trading volume in 2025, with over 30,000 daily active users, gradually competing for retail share from Robinhood.

Derive.xyz focuses on multi-chain options and perpetual futures, covering Bitcoin, Ether, and some RWA indices. Its institutional-grade tools and real-time oracle machines attract advanced traders. Although fees are higher and the learning curve steep, total trading volume has reached $18.6 billion, with the RWA perpetual sub-market averaging $500 million in monthly trading volume.

Kraken xStocks, backed by the exchange, received preliminary SEC approval and is migrating to layer 2 networks like Arbitrum to enhance composability. Its total trading volume exceeds $5 billion, with over 37,000 unique holders, covering more than 60 assets. However, its non-on-chain custody model still carries centralization risks.

Vest Markets takes a different approach, focusing on reducing weekend slippage through RFQ fill mechanisms, with 24-hour trading volume reaching $34.05 million. Its blockchain auditing and LP incentive models are innovative, but current market depth remains limited.

Ostium, based on Arbitrum, offers a fully on-chain experience for synthetic RWA perpetual contracts, expanding from US stocks to commodities like crude oil and gold. The protocol’s TVL has grown over 150%, with Q1 perpetual contract trading volume of $2.36 billion, providing an important option for entry-level users without KYC.

Risks and challenges

Of course, all these developments are not without controversy.

Kaledora, co-founder of Ostium Labs, points out that the model of reconstructing market depth with on-chain order books is more suitable for crypto-native assets rather than traditional financial assets, which have more stable, centralized, and deep liquidity structures. In Kaledora’s view, a better solution is an “on-chain brokerage model”: directly referencing TradFi market prices and accessing them via on-chain channels, rather than trying to rebuild an order book on-chain that competes with CME.

Additionally, oracle and manipulation risks exist. During non-trading hours, on-chain prices rely on algorithms to smooth movements, but this is not foolproof. Previously, the PAXG gold contract experienced a price anomaly that led to millions of dollars in liquidations, sounding an alarm for all RWA products—when markets are closed but trading continues on-chain, the risk of price deviations exists.

Regulatory uncertainty is also a concern. The US SEC is reviewing the compliance of these on-chain US stock products, and if they are ultimately classified as securities, existing DeFi protocols may need to obtain relevant licenses. While many projects are exploring compliance pathways, most still operate in a regulatory gray area.

Summary

The crypto world once enjoyed its own circle of self-entertainment: new chains, new tokens, new stories, new narratives. But true financial power comes from those who can support markets where global capital truly wants to participate.

And Nasdaq has always been there, with trillions of dollars flowing, and the most valuable companies trading there.

Therefore, the real players in the crypto space don’t care where the battlefield is—they only care where opportunities exist.

Disclaimer: The content of this article is for informational purposes only and does not constitute any investment advice. Invest cautiously and make decisions rationally based on your own circumstances. Risks are your own.