The crypto exchange platform Coinbase wants to bring Wall Street into DeFi. Indeed, the exchange is officially deploying its tokenized actions on Base, its own Layer-2 network. This market is breaking new records. Thus, it reached an amount of 2.3 billion dollars by mid-2026. The main players in the sector aim to make these actions tools that can be used in decentralized applications.
In brief
- Coinbase takes a major step in integrating traditional finance with Web3 by deploying tokenized US stocks on its Layer-2 Base network.
- Based on the B20 standard, these securities backed by the 1:1 ratio benefit from Chainlink’s oracle infrastructure to guarantee real-time updating of their prices.
- This architecture allows international investors to access major Wall Street stocks 24 hours a day and use them directly as collateral or in DeFi liquidity pools.
- Supervised by a regulated depository under the jurisdiction of the ADGM, this initiative lays the foundations for a decentralized, programmable and highly fluid stock market.
A technical architecture based on the B20 standard and the Chainlink infrastructure
In order to develop the network circulation of capital stocks from the American stock market such as NVIDIA (NVDAc), Apple (AAPLc), Alphabet (GOOGLc) or Meta (METAc), Coinbase has created tokens based on the B20 standard, immediately executed on its Base second layer blockchain. Transaction fees are reduced while execution is almost instantaneous thanks to strategic and technical choice.
In addition, the conservation of each B20 token is done at the strict ratio of 1:1. Such a system facilitates the fragmentation of securities for investors starting from small amounts. It also allows the direct custody of these shares in non-custodial portfolios.
The creation of tokens on decentralized ledgers requires accurate and continuously updated short feeds. The Coinbase exchange chooses Chainlink as the oracle infrastructure for the entire its tokenized shares issued on Base.
Thus, Johann Eid, Chief Business Officer at Chainlink Labs, illuminates on the importance of such a deployment: “Tokenized assets only reach their full potential when the overall ecosystem can build with them through DeFi. With Chainlink, Coinbase leverages secure and reliable price data required to unlock the utility and distribution of tokenized stocks within DeFi, while accelerating the convergence between TradFi and DeFi.. Through Chainlink’s price data feeds, smart contracts from lending and exchange protocols arrive at market values in real time.
The important characteristics of this infrastructure are based on numerous major technical specifications:
- Native execution on Base: the use of Ethereum Layer-2 to ensure high transaction throughput and reduce network fees to a few cents;
- The B20 issuance standard: it is a token designed to maintain complete composability with the smart contracts of the decentralized ecosystem;
- Chainlink price oracles: continuously updating the prices of underlying assets on the chain in order to power partner DeFi protocols.
A model of detention regulated in international jurisdiction
The legal security of these tools is linked to the reality of the underlying asset. Indeed, each of the B20 tokens is equivalent to a physical security acquired and kept in a custody service isolated from the risk of bankruptcy with the financial intermediary Alpaca, under the regulation of the Abu Dhabi Global Market (ADGM). Such product is intended for users who reside outside the United States only.
It requires passing verifications (KYC) in accordance with local requirements. Antonio Garcia-Martinez, head of growth at Base, explains this positioning : “Base has built one of the most vibrant DeFi ecosystems, and Chainlink’s oracle infrastructure unlocks new utility for tokenized assets. With institutional-grade market data now online, we are providing millions of users with access to financial primitives that, until now, have been locked behind traditional guardrails.”.
Alongside synthetic derivative contracts, the structure installed by Coinbase makes every effort to ensure that the economic rights relating to the shares are profitable for token holders. Dividends paid by companies are distributed to owners of B20 tokens on Base, while the infrastructure takes care of automatically managing corporate actions such as stock splits. This legal sustainability builds a direct bridge between regulated stock markets and the distributed ledger.
The use of tokenized shares as collateral and the search for yield
The major attraction for these stocks lies in their ability to cooperate without difficulty with decentralized finance protocols. While a share placed in a traditional securities account remains immobilized, an NVDAc or AAPLc token on Base can be offered as collateral on a protocol like Aave to borrow stablecoins.
It can also be deposited into automated liquidity reserves on Aerodrome. Users can thus generate additional yield or develop arbitrage strategies 24 hours a day, 7 days a week, in order to overcome the time constraints relating to the American stock markets.
Such an initiative implemented by Coinbase justifies the intensification of the digitization of financial securities, but its extension in the future will depend on the evolution of international regulatory and normative frameworks. The choice of an international deployment under the ADGM framework illustrates the caution of various stakeholders in the face of strict regulatory uncertainties in the United States regarding the distribution of tokenized securities.
While cross-border compliance challenges remain real, the alliance between the issuance capacity of Coinbase, the precision of Chainlink and the speed of Layer-2 Base lays the foundation for a unified global financial infrastructure.
Maximize your Tremplin.io experience with our ‘Read to Earn’ program! For every article you read, earn points and access exclusive rewards. Sign up now and start earning benefits.
