Author: Lao Bai (ABCDE Investment Research Partner) Source: X, @Wuhuoqiu

Today I will reply to the topic of Wei Shen, and by the way, I will talk about other solution ideas mentioned by many friends in the comment area

1. Synthetic Assets - At that time, many veterans said that if all you want is a price exposure similar to spot stocks, and you want to hold it for a long time to avoid the Funding Rate wear-out like Perp, synthetic assets are the best way.

I have personally followed this all the way from the SNX era to Mirror in the Luna era. Even if you think of GMX's GLP as a "variant synthetic asset", many of the designs in it are very fancy. I still vaguely remember the amazing feeling when I first saw the design of SNX synthetic assets and GLP during the Defi Summer era (GLP has no stocks, and later GNS was inspired by GLP to create a synthetic asset pool that can trade everything including stocks)

However, the market has already voted once with real money, and what users ultimately choose is real assets (or trusted mapped assets) > synthetic assets

It has nothing to do with decentralization, technology, or mechanisms. It is more credible and is an asset backed by real assets

What is also interesting is that the synthetic assets that did not reach the top but survived in the end, one DAI (USDS) and one USDE, are all semi-centralized solutions

2. Tokenized stocks - I had the honor to discuss a topic with my sister more than a year ago. At that time, a sister asked me what I thought was the biggest problem in the currency circle. My answer at the time was "We have over-financialized too many things." I looked at Meme, Gamefi, and AI Crypto more from a VC perspective. I felt that I was looking for a nail with a hammer.

The first sister’s answer to me was that she thought we lacked good assets. We are essentially talking about the same thing. At that time, I also asked the first sister if she had ever considered launching stock trading on Binance. The first sister said that Binance had tried it in 2021, but the regulatory pressure was too great at the time, and the product was removed from the shelves in just a few months.

So tokenized stocks are actually the second attempt in our circle. 21 The first attempts by Binance and FTX to test the waters were blocked by regulation - but now Binance, Bitget, and other old CEXs, and platforms such as BIT, StableStock, and MSX are doing it again, which shows that the regulatory environment and product structure have evolved in recent years, and they are not simply repeating the same mistakes

3. The soul's blood is in the hands of the feuding - Here I agree with Wei Shen's view that "the rights and interests behind stocks are fundamentally the product of a single government power" and "those whose interests have been harmed are themselves the makers of the rules of the game". But we can look at it from another perspective - if you think of Alpaca as Tether, does this logic all work out?

Stablecoins are currently one of the most widely used and successful products in Crypto. No one will say that because the US dollar is controlled by the Federal Reserve, stablecoins have flaws

In other words, "centralization of underlying assets" ≠ "tokenization has no value"

Of course, Alpaca does not yet have the size and Reputation of Tether, but when USDT first started, Tether was also accompanied by various doubts, whether it was asset reserves, worries about being strangled by the Federal Reserve, or USDT being used for regulatory arbitrage, gray production, and even terrorist activities... But in a few years, it has reached a scale of hundreds of billions

Stablecoins are now seen as one of the means of expansion of the US dollar’s global hegemony. Why can’t tokenized stocks be seen as one of the means of global expansion of US dollar assets?

If it is said that "the person who loses interests is the rule maker, if the impact is too big, it will be vetoed by one vote" - if the impact is so big that it will be vetoed in the next few years, it just proves one point, that is, the impact is so large that it has proven its value and vitality. This is very similar to the growth path of stablecoins back then. As for how the final regulatory framework will evolve, that is actually another question.

Crypto has been creating new trading methods for the past ten years, but rarely created new high-quality assets. When a market lacks asset supply, existing assets will continue to be financialized. Meme, Perp, and various high-leverage products are essentially the result.

From this perspective, tokenized stocks are not necessarily creating new financial instruments, but introducing new asset supplies to Crypto. Some kind of arbitrage is just a feature at present, not the whole purpose. On the one hand, there is the real desire of major CEXs and users for high-quality assets, and on the other hand, under the macro background of de-globalization, the global expansion of US dollars and US dollar assets, and the perfect match between the supply side and the demand side, I am firmly optimistic about the future of tokenized stocks :)