Aug 28, 2026 · 32 min
Tokenized stocks challenge the brokerage cost structure
How Tokenized Stocks Could Undercut Interactive Brokers' 77% Profit Margin
On-chain equities could make markets more continuous and programmable while forcing new answers about regulation, pricing, and investor access.
- 1Coinbase’s fully backed tokenized stocks differ from synthetic wrappers by tying tokens to clearer claims on underlying value.
- 2DeFi composability could extend equities beyond brokerage accounts, but closed markets and uneven oracle schedules complicate pricing.
- 3Alex Cutler argues on-chain markets could lower brokerage costs and broaden participation in capital markets traditionally dominated by major firms.
Don't miss
Cutler argues that when traditional stock markets close, on-chain liquidity could make price dislocations useful for discovery rather than merely a technical problem.
The brief
Alex Cutler frames on-chain markets as a possible internet moment for capital markets: a shift that could broaden participation beyond major financial institutions.
The conversation distinguishes Coinbase’s fully backed tokenized stocks from synthetic wrappers, emphasizing the need to understand each token’s claims, rights, and economic design.
Tokenized equities become more consequential when they can move through DeFi, where composability could make stocks usable as programmable collateral and trading assets.
That promise collides with practical problems: stock markets close, oracles update on different schedules, and price feeds must support trading when traditional venues are offline.
Cutler’s central claim is that on-chain liquidity could turn off-hours price dislocations into useful price discovery while reducing the costs of traditional brokerage services.
What was said on this episode
16 statements · 15 positive · 1 neutral
On-chain markets can operate continuously with lower costs and global accessibility.
“On-chain, our markets can be faster, cheaper, globally accessible, 24-7, 365, and the assets that power them are fully programmable.”
Listen at 2:08
Coinbase’s tokenized-stock structure is the gold standard for tokenized stocks.
“And so it's basically the gold standard for this type of thing.”
Listen at 3:44
Base and Aerodrome captured about 25% of tokenized-stock AMM volume.
“we have captured about 25% of the AMM volumes on these tokenized assets across all exchanges and chains and issuers.”
Listen at 5:51
Aerodrome and Base processed about $80 million since launch.
“I think we've done about 80 million since launch”
Listen at 6:34
Tokenized-stock markets will grow and scale significantly.
“we expect them to grow and scale significantly”
Listen at 7:50
On-chain markets will increasingly become venues for price discovery.
“increasingly on-chain markets will be the venue for price discovery”
Listen at 7:56
Tokenized stocks can convey stock splits and dividends on-chain.
“they can bring on chain right things like uh token uh or sorry stock splits um they can bring on the chain things like uh dividends”
Listen at 10:53
Tokenized stocks are superior to conventional stocks through programmability and composability.
“this is a better version of a stock period because of the programmability and the composability that comes with it.”
Listen at 14:45
Interactive Brokers extracts approximately a 77% profit margin from its activity.
“And it extracts a staggering like 77% profit margin on that type of activity.”
Listen at 15:22
Spot pools constitute the actual market for tokenized stocks.
“A spot pool is the actual market for these assets.”
Listen at 16:44
On-chain spot markets will become major reference and hedging markets for tokenized assets.
“These will become some of the deepest, richest markets for these types of assets that everything else quotes against, that everything else hedges against”
Listen at 18:05
Off-hours price dislocations are beneficial features of tokenized on-chain markets.
“Price dislocations when markets are closed is the feature, not the bug of these tokenized on-chain markets.”
Listen at 19:48
On-chain AMM markets will increasingly drive price discovery.
“we believe increasingly these will be the markets whereby price discovery happens”
Listen at 22:08
SEC guidance will likely align with Coinbase’s tokenized-equity product.
“I would bet that when we do eventually get the guidance from the SEC on how they plan to treat tokenized equities, it will be very synergistic with the product that Coinbase has brought to market.”
Listen at 27:03
Aerodrome redistributes all protocol revenue to token users.
“on aerodrome um we redistribute 100 of the protocols revenue right back to users of the token”
Listen at 28:14
More tokenized financial products will launch by the following week.
“by this time next week, there will be a lot more”
Listen at 30:16
Statements are attributed to the speaker as said on the episode and reflect their view at the time, not PodLume's. They are not advice.