Non-Fungible Tokens (NFTs) surpass Decentralized Finance (DeFi) in terms of activity during July, with both sectors experiencing considerable growth.

Non-Fungible Tokens (NFTs) surpass Decentralized Finance (DeFi) in terms of activity during July, with both sectors experiencing considerable growth.

In the bustling world of decentralised finance (DeFi), July 2022 was a month of significant milestones. The tokenized stock market within DeFi experienced dramatic growth, with tokenized stocks surging around 220% in market capitalization, reaching approximately $53.6 million.

Key recent developments and characteristics during that time include:

• The number of blockchain addresses holding tokenized stocks rose steeply from 1,600 in June to over 90,000 in July, highlighting a surge in adoption and investor demand.
• Several major trading platforms like Kraken, Bybit, Robinhood, and Solana-based exchanges began listing tokenized blue-chip stocks, enabling 24/7 trading, no fees, and global accessibility to traditional equities via crypto wallets.
• Tokenized stocks began being used as collateral in DeFi lending protocols, such as Kamino Finance on Solana accepting xStocks for borrowing stablecoins, enhancing DeFi composability.
• Immediate settlement via blockchain eliminated traditional delays (like the T+2 settlement window), reducing counterparty risks and capital inefficiency.
• Automated financial strategies and complex instruments became possible through smart contract compatibility, for instance enabling index-style baskets of tokenized equities wrapped as single tokens.

On Solana network specifically, tokenized stock market capitalization surpassed $100 million within less than a month since launch, driven by tokens like TSLAx and SPYx with thousands of holders each.

NFTs also played a pivotal role in July's growth. The NFT market staged a significant comeback, surpassing DeFi in activity for the first time in months. On Ethereum, Blur captured up to 80% of daily NFT volume, mainly due to professional traders and its Blend lending protocol. Major brands like Starbucks, Nike, Louis Vuitton, Rolex, Coca-Cola (China), Netflix, NBA Top Shot, and FIFA made moves in the NFT space.

The growth surge in tokenized equities in mid-2022 drew comparisons to the early DeFi boom in 2020-21, and analysts anticipated a potential market opportunity scaling up to $1.3 trillion if tokenization captured just 1% of the global equity market.

Regulatory steps were also progressing, including moves by the SEC, such as unveiling “Project Crypto,” indicating efforts to bring U.S. financial markets on-chain, which could accelerate adoption.

In the realm of NFTs, they are evolving from hype to utility, moving from collectibles and culture to identity, ticketing, gaming, and tokenized real-world assets. On Solana, Hyperliquid, a derivatives-focused platform, became a major revenue generator, accounting for 35% of all blockchain revenue in July. Ethereum maintained its lead in DeFi, with a TVL of $166 billion, significantly more than Solana's $23 billion.

July 2022 marked a pivotal inflection point for tokenized stock markets in the DeFi ecosystem, driven by expanding trading options, user base growth, DeFi integration, and regulatory attention, setting the stage for rapid expansion in on-chain real-world asset trading.

[1] CoinDesk (2022). Tokenized Stocks: A New Era for DeFi. [online] Available at: https://www.coindesk.com/business/2022/07/25/tokenized-stocks-a-new-era-for-defi/

[2] Decrypt (2022). Tokenized Stocks are Taking Off: Here's What You Need to Know. [online] Available at: https://decrypt.co/93206/tokenized-stocks-are-taking-off-heres-what-you-need-to-know

[3] Binance (2022). Binance Launches Tokenized Stock Trading. [online] Available at: https://www.binance.com/en/blog/news/2022-07-08-binance-launches-tokenized-stock-trading

[4] The Block (2022). Solana's Tokenized Stock Market Surpasses $100 Million in Less Than a Month. [online] Available at: https://www.theblockcrypto.com/post/115791/solanas-tokenized-stock-market-surpasses-100-million-in-less-than-a-month

[5] The Block (2022). Tokenized Stocks: A New Asset Class for DeFi. [online] Available at: https://www.theblockcrypto.com/data/tokenized-stocks-a-new-asset-class-for-defi

1. The surge in adoption and investor demand for tokenized stocks was evident as the number of blockchain addresses holding them rose from 1,600 in June to over 90,000 in July.
2. Several major trading platforms, including Kraken, Bybit, Robinhood, and Solana-based exchanges, started listing tokenized blue-chip stocks, enabling 24/7 trading, no fees, and global accessibility to traditional equities via crypto wallets.
3. Tokenized stocks were used as collateral in DeFi lending protocols, such as Kamino Finance on Solana, demonstrating enhanced DeFi composability.
4. The immediate settlement via blockchain eliminated traditional delays, reducing counterparty risks and capital inefficiency.
5. Automated financial strategies and complex instruments became possible through smart contract compatibility, even enabling index-style baskets of tokenized equities wrapped as single tokens.
6. On Solana network, tokenized stock market capitalization surpassed $100 million within less than a month since launch, with notable tokens like TSLAx and SPYx having thousands of holders each.

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