The Kamino lending protocol introduces tokenized stock collateral, opening a new milestone in Decentralized Finance.

[Coin World] The Solana-based decentralized lending protocol Kamino is integrating tokenized stocks as collateral options. The tool it has chosen, the on-chain trading feature xStocks, is also used by some trading platforms and supported by Chainlink's data standards. "With this integration, Kamino becomes the first major lending protocol in DeFi to use tokenized stocks as collateral, marking an important milestone for DeFi," the team wrote in a Friday announcement. According to the announcement, the Kamino v2 architecture includes a new xStocks market designed to allow users to borrow stablecoins using xStocks as collateral. This feature will initially launch with the tokenized representation of Apple stocks, AAPLx, and will gradually expand. "Ultimately, our vision is for Kamino to become a complete on-chain asset market where users can exchange assets, borrow against assets, or use margin to amplify exposure," the team wrote. "Permissionless financial rails are maturing and beginning to address TradFi use cases in a more efficient, accessible, and transparent manner."

In recent weeks, several companies have made significant announcements regarding on-chain representations of tokenized stocks or shares of public or private companies. This includes a trading platform that announced it will provide EU customers with the ability to trade xStocks on Solana, as well as a platform that is building an internal solution for private stocks on the Ethereum layer 2, Arbitrum. Tokenized stocks have long been seen as the holy grail of the emerging real-world asset economy. Progress has been impeded to some extent by regulatory issues and the necessity of obtaining corporate support. For example, Hester Peirce, a commissioner of the (U.S. Securities and Exchange Commission), who is generally a representative in favor of cryptocurrency, poured cold water on this trend in a recent letter, stating that "tokenized securities are still securities." Meanwhile, OpenAI criticized a platform's "stock tokens," stating that it has not recognized or approved any transfers, prompting the platform's CEO to clarify that these on-chain tokens are derivatives and not actual equity.

xStocks, launched by Backed Finance, is a tokenized representation of U.S. stocks and ETFs issued in the form of SPL tokens on the Solana blockchain and in the form of BEP-20 tokens on the BNB Chain. Each xStock (such as xAAPL or xTSLA) is backed 1:1 by real stocks held by custodians. Placing these asset representations on-chain enables 24/7 trading and features such as fractional ownership. Backed stated in a previously released blog: "In addition to direct retail availability, integrating xStocks into lending protocols can elevate them as building blocks for new structured products, combine with other protocols, and allow for the construction of complex financial instruments."

DEX based on Solana, such as a certain DEX, offers lending and liquidity provision. Kamino Finance is the largest currency market on Solana, a decentralized liquidity management, lending, and leverage protocol on Solana with a total value locked of nearly 3 billion USD. Kamino launched its "intent-based" swap feature in December. Its products are not available in the US, UK, and other restricted markets.