Blockchain Reshaping the World: A New Era of Stock Tokenization

In 2011, a well-known venture capital founder published an article titled "Software Is Eating the World" in The Wall Street Journal, which articulated the view that software is changing the world at an unprecedented speed and scale.

For more than a decade, we have witnessed the rapid development of the Internet, giving rise to numerous giant companies with a market value exceeding one hundred billion. Even now, this assertion still holds true, as artificial intelligence is beginning to reshape the world in entirely new ways. Some opinions even suggest that AI is devouring software. However, it seems that all of this began in 2011, as many of the social platforms we are familiar with experienced explosive growth that year.

Now, more than a decade after the birth of blockchain technology, we have finally ushered in the beginning of "Blockchain Devouring the World," and this starting point is the realization of tokenization in the US stock market.

Although the tokenization of U.S. stocks is not a new phenomenon, and has even been partially realized in some defunct crypto exchanges, the current participants entering the market are no longer limited to purely cryptocurrency companies, but include well-known internet financial enterprises.

Recently, a well-known internet finance company announced the launch of stock token trading services based on a certain Layer2 network in Europe, and will tokenize the equity of some unlisted companies, including a well-known AI company and a space exploration company. This news has caused a huge response in the financial sector and has driven the company's stock price to a historic high.

Currently, the total market capitalization of the global cryptocurrency market is approximately $3.4 trillion, while the total market capitalization of the global stock market is about $135 trillion, making the gap between the two nearly 40 times. In other words, the ultimate market potential for stock tokenization is as high as $135 trillion, and as the market capitalization continues to grow, the potential ceiling will also keep rising.

However, the current market share of stock tokenization may be less than 0.1%. Only when this percentage exceeds 3% can it be said that the industry has truly ushered in explosive growth.

This is precisely the future that emerging trading companies are targeting, and it is also the true growth point of Blockchain technology. If this logic holds and is realized, then the impact brought by Blockchain and cryptocurrency will be no less than the influence of "software eating the world."

It is foreseeable that the next 1-2 years will be a period of rapid growth in this field. More companies will enter the market, which will also force some traditional financial service companies to transform. The door to this trend has already been opened.

But the tokenization of stocks is not the end of the blockchain; it is merely an important step in the process. At the end of last year, a well-known technology company CEO released a proposal titled "U.S. Digital Asset Framework, Principles, and Opportunities." He predicted that the global digital capital market is expected to grow from $20 trillion to $280 trillion, while the digital asset market (excluding Bitcoin) could grow from $1 trillion to $59 trillion.

Currently, we are facing three important turning points: first, the global trend of embracing stablecoins, regardless of East or West; second, the continuous growth in the on-chain scale of government bonds and money market funds, which is widely discussed as the tokenization of real-world assets (RWA); and third, the beginning of stock tokenization.

The endgame scale mentioned by the above CEO refers to the market for all these assets once they are fully on the Blockchain, and the potential arrival of the true "Everything on the Blockchain". This concept has been discussed for many years, from the popular Security Token Offerings (STO) in 2018 to the current RWA and stock tokenization, we have finally reached a tipping point. Although the road ahead is still long and full of challenges, this process has already begun.

Although looking at these data now seems a bit unrealistic, it is much like predicting ten years ago that Bitcoin would reach $100,000, full of drama and absurdity. And now, Bitcoin has surpassed $110,000 and continues to set new highs.

In the foreseeable future, we will see Blockchain reshaping the presentation of assets and the way value is transmitted, while it remains to be seen whether it will reshape the way information is communicated. At the same time, AI is transforming the way information is captured and bringing about a productivity revolution. Today, technological development is once again on the eve of an explosion.

Coincidentally, both Blockchain and AI have backgrounds that have been lurking for over 10 years, from being ignored to being filled with bubbles, and then to value reconstruction. Perhaps it is time to welcome a new technological revolution.

So, who will be the next major player to enter the field of stock tokenization? Let us wait and see.