RWAs: A Blueprint for the Future of Mantle
While most metrics are down across the board, the RWA sector is the only one showing consistent growth, with tokenised stocks among the fastest-growing RWA categories right now.
The sector has $1.6 billion in distributed value, up ~40% in the past 30 days.
Many are now moving into this vertical. Examples include NYSE parent company ICE, which has invested in OKX and plans to tokenise U.S. equities and ETFs, and Kraken, which plans 24/7 tokenised equity trading.
Others have already bet on it for some time.
Among those is Mantle, whose RWA pivot we have covered extensively in the past.
Mantle has set up a tokenised equity infrastructure that covers issuance, trading, and redemption onchain. Together with Bybit, its main distribution partner, Mantle has created a CeDeFi partnership that reaches over 80 million users.
However, building an RWA stack from scratch alone does not ensure adoption, especially amid growing competition. As Emily Bao, a key advisor at Mantle and Bybit, points out:
As part of these developments, Mantle has now collaborated with xStocks to leverage their new product, xChange, to ensure that onchain execution quality of xStocks matches offchain pricing.
xStocks holds over $500 million in assets across 172 tokenised equities (13 live on Mantle) and is increasing its market share among tokenisation platforms (ranking 15th overall), with over 50% growth in the last month alone.
By unique holder count, eight of the top 10 tokenised stocks are xStocks products. This number rises to 68% when accounting for the top 25.
At its core, xChange is a pricing and settlement mechanism that relies on an atomic Request for Quote (RFQ) system.
Instead of routing through a liquidity pool, Atomic RFQ pings every available liquidity source simultaneously, locks in the best available price in a single atomic transaction, and executes the order.
Up until now, xStocks were tradable via Fluxion, Mantle’s native DEX, but relied on onchain liquidity. Now, Mantle uses xChange as a pricing and settlement mechanism in the backend, ensuring optimal execution with no slippage.
24/7 trading is ensured by a combination of both: xChange Atomic RFQ during the week and onchain liquidity during off-market hours. This is an overall trend across TradFi towards 24/7 equities trading, which we analysed in our previous deep dive into commodities.
Execution quality is non-negotiable for many investors, especially those trading with size.
Leveraging xChange is a major unlock for the tokenised stocks currently tradable on Mantle, which have now received a much-needed execution upgrade that rivals offchain equities.
While only 13 tickers are currently listed, xChange allows tapping into liquidity for a much broader range of tokenised stocks.
Once the execution gap for tokenised equities is closed, they can finally scale and become a compelling alternative for institutional investors, addressing concerns such as fragmented liquidity across onchain and offchain venues, as well as inferior execution and slippage.
Tokenised stocks on Mantle still have a long way to go, with xStocks representing only about ~$4.5 million in tokenised value and the top stock, Tesla, having only about 250 holders.
The majority of tokenised assets on Mantle are in other categories, including Maple’s syrupUSDT, worth $90 million.
At this point, tokenised stocks can be compared to where Treasuries were in 2023, before their widespread adoption. But this time, we expect growth to accelerate due to the upcoming CLARITY Act legislation and because the infrastructure has already been built.
xChange allows any network to benefit from improved execution quality for xStocks. We expect these developments to drive increased volume to xStocks trading onchain.
Phase 1 of Mantle-xStocks collaboration was the initial integration and support for tokenised equities.
Phase 2 was solving the execution layer for tokenised stocks, the core aspect for institutional adoption.
Now, Mantle can focus on boosting its distribution and onchain activity, with Bybit playing a big role. More xStocks can be easily added to the roster to target different user niches.
An additional element to take into account, which could further boost this trend, is xStocks’ current loyalty program, in which active users are rewarded with xPoints, potentially related to a possible xStocks native token.
What’s next?
Once again, Mantle’s approach has focused on solving the key issues at the infrastructure layer, bringing onchain execution as close as possible to TradFi. As many have confirmed, institutions first and foremost care about their bottom-line slippage and execution. If moving onchain makes it worse, then this is just a no-go.
Having addressed this aspect with xChange, the next step for Mantle, through collaborations such as its partnership with xStocks, is to establish itself as a key distribution layer for tokenising stocks, particularly through partnerships outside its ecosystem.
written by @francescoweb3 ✍️
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Disclaimer: This article was produced in collaboration with Mantle. Castle Labs applies the same standard to sponsored content as in our independent research. We strive to be accurate, unbiased, and educational. Commissioned partnerships provide resourcing and distribution, not editorial control.