Solana-based decentralized lending protocol Kamino integrates tokenized xStocks as a collateral option

Solana-based decentralized lending protocol Kamino is integrating tokenized stocks as a collateral option. Its chosen tool, the onchain trading feature xStocks also used by centralized exchanges like Kraken and Bybit, is powered by Chainlink’s data standard.

“With this onboarding, Kamino becomes the first major borrow/lend protocol in DeFi to onboard tokenized equities as collateral, marking a major milestone for DeFi,” the team wrote in an announcement on Friday.

According to the announcement, the Kamino v2 architecture includes a new xStocks Market, designed to enable users to borrow stablecoins against xStocks collateral. The feature will launch with a tokenized representation of Apple equity, AAPLx, and will gradually expand.

“Ultimately, the vision is for Kamino to be the full-suite, onchain asset marketplace, where users can swap their assets, borrow against their assets, or leverage their exposure with margin,” the team wrote. “Permissionless financial rails are maturing, and beginning to encompass TradFi use cases in a way that is more efficient, accessible, and transparent.”

In recent weeks, several firms have made significant announcements regarding tokenized equity, or onchain representations of public or private corporate shares. This includes Kraken, which announced it would offer EU clients the ability to trade xStocks on Solana, and Robinhood, which is building an in-house solution on the Ethereum scaling layer Arbitrum for private stock.

Tokenized equity has long been a Holy Grail of sorts for the growing real-world asset economy. Advances have been hampered in part by regulatory concerns and the necessity to gain buy-in from businesses.

For instance, Commissioner Hester Peirce, typically a pro-crypto representative of the U.S. Securities and Exchange Commission, poured cold water on the trend in a recent letter, saying, “Tokenized securities are still securities.” Meanwhile, OpenAI slammed Robinhood’s “stock tokens,” stating that it did not endorse or approve any transfers, prompting Robinhood CEO Vlad Tenev to clarify that these onchain tokens were derivatives, not true equity.

xStocks, launched by Backed Finance, are tokenized representations of U.S. stocks and ETFs issued as SPL tokens on the Solana blockchain and BEP-20 tokens on the BNB Chain. Each xStock, like xAAPL or xTSLA, is reportedly backed 1:1 by real shares held by custodians. Bringing representations of these assets onchain enables 24/7 trading and features like fractional ownership.

“Further than direct retail usability, the integration of xStocks into a lending protocol elevates them into building blocks for new structured products, composable with other protocols and allowing the constitution of complex financial instruments,” Backed wrote in a previously published blog. Solana-based DEXes, such as Jupiter and Raydium, provide lending and liquidity provision.

Kamino Finance, the largest money market on Solana, is a decentralized liquidity management, lending, and leverage protocol on Solana with nearly $3 billion in total value locked. Kamino launched its “intents-based” swap feature in December, The Block was first to report. Its products are not available in the U.S., UK, and other restricted markets.