Author: Punk Source: @punk2898

Finally, Gate US stocks are also online. It is not RWA, nor tokenization, but directly connected to brokers.

Looking at the entire industry, the direction is very clear: the road to RWA US stocks (basically the Ondo plan) is getting narrower and narrower, and direct connection to securities firms is the end point. But what Gate is taking this time is different from most platforms on the market

Outline of this article:

Why did Gate go the other way?

Why is U.S. stock trading a prisoner’s dilemma?

Three fatalities crush RWA (Ondo mode)

The last straw that broke the camel's back: dividends

When one tiger falls, thousands of them stand up

1. Why did Gate take another path?

Most of the U.S. stock trading platforms on the market take the on-chain route - tokenizing U.S. stocks into RWA, and what you buy is essentially a certificate linked to the stock price

Gate This time is different. It does not do on-chain tokenization, but directly connects to the exchange - docking with compliant brokers holding a US Broker-Dealer license (Alpaca supports this, this is worth digging into, but it needs to be written in a separate article), what you buy is a real ticket, not a shadow on the chain

Even for the same brokerage, there are two completely different paths: one to put US stocks on the chain, and the other to directly connect you to the exchange

The path is different, the experience is completely different

Then the question arises: Wasn't RWA touted as a "trillion track" back then? Why is it that within two years everyone is calling for beatings?

The answer is simpler than you think

Because everyone who has used it knows how bad the experience of RWA US stocks is

2. Prisoner’s Dilemma: The more lively, the more dangerous, but if you are not lively, you are waiting to die

There is a very cruel game here: the more exciting you do in US stocks, the greater the policy risks. It’s only a matter of time before regulation targets you. Why were Tiger and Futu restricted back then? It’s just too lively

But what if you don’t do it?

The user went elsewhere to do it. Do you want to keep someone? Can't keep it. Users in the currency circle have no loyalty. Whoever has more targets, has lower costs, and has a better experience, that’s where the money will go

This is the prisoner’s dilemma——

Everyone knows there is thunder ahead, but no one dares to stop

After Tiger and Futu are restricted, where will Chinese retail investors go to speculate in U.S. stocks? This is a huge vacuum zone. Currency exchanges have seen it, and they have an advantage that traditional brokers don’t have: global users + cryptocurrency deposits and withdrawals + 24/7 trading habits

To put it bluntly, the currency exchange just filled the pit where the tigers fell

And the filling method is more ruthless than a tiger - directly connected to the brokerage, not the second-hand plan of RWA

Three, three weak points crush RWA (Ondo mode)

RWA did not die today. It is sentenced to death by three fatal points, each time more deadly than the last

The first Achilles heel: Liquidity

RWA’s biggest lie is “US stocks on the chain”. It sounds sexy, but in practice - what about depth? What about pending orders?

No.

Hundreds of people trade on it, which is nothing compared to the liquidity of the real US stock market. What to do? Only contracts can be made. There are indeed people playing with the RWA perpetual contract, but think about it: you originally wanted to buy Tesla spot, but you were forced to open a contract. I just wanted to hold TSLA spot, but ended up holding a long position on one contract.

And there are service provider risks behind the contract. Who are your counterparties? Is liquidation reliable? Who has the final say on price anchoring? Every step is asking "Do you believe me?"

Asking "Do you believe me or not" in the currency circle is a joke in itself

The second Achilles heel: the number of assets

RWA’s ability to achieve hundreds of targets is incredible. Tesla, Apple, Nvidia, Microsoft, plus a few ETFs, and you’re almost done

But what about direct brokers? Access the five major exchanges: NYSE, NASDAQ, NYSE Arca, NYSE American, and BATS, and choose from more than 10,000 stocks

Hundreds vs. more than 10,000 - this is not a difference in quantity, but a difference in generation

Do you want to buy a less popular ticket? Not available on RWA. Do you want to do some sector rotation? RWA can't get up on the wheel. Your strategy space is blocked by hundreds of targets

The third Achilles heel: holding costs

This is the most disgusting

No matter whether you are long or short in RWA stock contracts, you will be charged for holding a position. Where did this cost come from? Because the bottom layer of the RWA contract is a derivatives structure - essentially an "equity certificate" linked to the stock price, you have neither real equity nor voting rights with it. Service providers need to lock positions, hedge, and charge you "overnight fees"

Where is the stock? You buy it and leave it alone, you don’t have to pay a penny

You will be charged for going long, and you will be charged for going short. The longer RWA is used, the more blood it loses. Users are not stupid, and they still have the ability to settle accounts

After these three fatal points, it’s strange that RWA is still alive

4. The last straw that broke the camel’s back: dividends

Although the first three questions are disgusting, at least they are bearable

Dividends directly affect the interests of users

Why is dividends a Achilles heel for RWA? Back to the sentence above - what you are holding is not a real stock at all, but a linked certificate. Real stock dividends are paid to shareholders by listed companies, and you are not even on the shareholder list. How the money is transferred to you depends entirely on the service provider

How to handle dividends from RWA stocks? Both options are overturned

Option 1: Record it on the price.

After the dividend is received, the service provider adds the dividend amount to the stock price. Sounds reasonable, right? But the problem is - after adding it, your stock price is decoupled from the real market price of U.S. stocks. Same stock, 180 outside, 182 here. Who will make up the price difference? Arbitrage people. Who loses after the deal? Are you in trouble?

Option 2: The service provider distributes it to the account.

This solution is the cleanest in theory, but a mess in execution. The service provider needs to reconcile, distribute and confirm with each exchange - if there is a problem in any part of the process, your dividends will be stuck. Some exchanges have delayed delivery for a month or two. If you call customer service, they will say, "We are communicating with the service provider."

You can’t get dividends from the stocks you paid for

Can this be tolerated?

Directly connecting to securities companies directly solves this problem. What you buy is a real ticket, the money is held in custody by a licensed brokerage and clearing agency, and the account is also protected by SIPC. Just like Tiger and Futu - dividends are transferred directly to your account, no need for service provider transfer, no need for reconciliation, no need to wait

On this one difference, RWA deserves to die

5. When one tiger falls, thousands of them stand up

Looking back at this whole thing

Tiger and Futu are restricted, and the entrance to U.S. stocks for Chinese retail investors is blocked

The currency exchange saw this pit and jumped in

First, I used RWA to explore the road, and found that RWA was not going to work - the liquidity was poor, there were few targets, the positions were expensive, and the dividends were ridiculous

Then change the path - directly connect to brokers, the same underlying logic as Tiger and Futu. Behind Tiger is Interactive Brokers, and behind these exchanges are licensed Broker-Dealers like Alpaca. They are essentially the same thing

Technically, with access to the five major exchanges, more than 10,000 stocks can be directly connected

From an experience point of view, there is no holding fee for spot stocks, dividends are credited directly to the account, and the account is protected by SIPC, which is no different from traditional US stock platforms

Users have no reason not to choose you

The entire industry is using practical actions to declare: RWA US stocks are dead, direct connection to brokers is the endgame

Tiger can fall, but the demand for speculation in U.S. stocks will not. What Gate picked up was not the tiger's body, but the user who dropped it on the ground.

Above.