Olivia Capozzalo & Camila Russo
March 10, 2026

gm, Defiers!

Today’s big story:

The convergence between crypto and traditional finance is no longer theoretical. It’s happening in real time. The harder question is what the dominant market structure for tokenized assets will look like.

In other news:

Zcash Open Development Lab raises $25M from VCs
Pudgy Penguins launches browser game
Trump’s cyber strategy includes crypto
Sahara AI’s Vision for the Agentic Era [SPONSORED]
7 Altcoins That Outgrew Bitcoin in 2025 — And What They Have in Common [MEDIA PARTNER]

Read more below! But first, please give our sponsors some love; they make this newsletter possible.

Ethereum's decentralised staking protocol just got a big upgrade! Saturn One brings 4 ETH validators, an RPL fee switch, and more. Stake your ETH with Rocket Pool today.

We’re back! Here’s what you need to know in web3 today

📈 Markets in the Past 24 Hours

TICKER	VALUE	24H
Bitcoin	$70,019	1.46 %
Ethereum	$2,036.49	0.18 %
BNB	$641.34	0.47 %
XRP	$1.38	0.85 %
Solana	$86.02	0.01 %

Today’s Big Story

The Tokenization Race Has Started But No One Agrees on the Model

The convergence between crypto and traditional finance is no longer theoretical. It’s happening in real time.

In the past week alone, we saw two notable partnerships: Kraken teaming up with Nasdaq to explore tokenized equities, and Intercontinental Exchange—the parent of the NYSE—partnering with OKX.

It’s clear traditional assets are getting tokenized. The harder question is what the dominant market structure for tokenized assets will look like.

Right now, three competing models are emerging.

Model 1: Tokenized Assets on Traditional Exchanges

The first model keeps traditional exchanges at the center.

Here, institutions like Nasdaq or Intercontinental Exchange issue tokenized representations of securities but continue to control the trading venues and regulatory structure.

Crypto platforms become distribution partners, but the core infrastructure remains within the traditional exchange ecosystem.

This approach has obvious advantages. It preserves the existing financial plumbing—clearing, settlement, listing standards, and regulatory oversight—while introducing blockchain-based settlement efficiencies.

But it also risks replicating the old system with a token wrapper.

Model 2: Tokenized Assets on Crypto Exchanges

The second model flips the power dynamic.

Instead of traditional exchanges tokenizing assets themselves, crypto platforms like Kraken or Coinbase list tokenized versions of traditional securities and distribute them to a global user base.

In this world, crypto exchanges become the primary trading venues, offering 24/7 access and programmable financial infrastructure.

For investors, this model could unlock dramatically greater accessibility: fractional ownership, global participation, and composability with DeFi.

But it raises difficult questions around custody, legal ownership, and shareholder rights.

If the token is only a synthetic representation of a stock held somewhere else, the system risks becoming a patchwork of wrapped assets.

Model 3: Brokers and Exchanges Launching Their Own Chains

There is a third model: financial platforms launching blockchains themselves.

We’re seeing early examples with companies like Robinhood experimenting with Layer-2 infrastructure to support tokenized assets.

In this vision, trading venues become blockchain operators, embedding settlement, custody, and asset issuance directly into their own networks.

This approach promises efficiency and vertical integration. But it also introduces another problem: fragmentation.

If every broker, exchange, and financial institution launches its own chain, we could end up with dozens of incompatible tokenized markets.

The Fragmentation Risk

This is the core danger of the current moment.

If every institution issues its own tokenized version of the same stock, markets could fragment into parallel liquidity pools.

You might end up with:

• one version of Tesla stock tokenized by a traditional exchange

• another issued by a crypto exchange

• yet another circulating on a proprietary blockchain

Liquidity, price discovery, and investor protections would splinter across competing ecosystems.

The promise that tokenization might bring more efficient global markets and composability could instead produce a maze of incompatible assets.

What the Optimal Model Might Look Like

The cleanest outcome would be a system where the token and the security are the same thing.

That would require two structural shifts.

First, existing equities would need to become tokenized at the issuer level, meaning the token itself represents the legal share.

In practice, that would require coordination across the institutions that run today’s capital markets infrastructure, including Depository Trust & Clearing Corporation (DTCC), stock exchanges, custodians, transfer agents, and securities regulators.

If that alignment happens, each share would have a single canonical token representation.

Second, new companies could issue shares natively as tokens from day one.

In that world, stocks would trade globally across any venue capable of listing them, whether a traditional exchange or a crypto platform.

Exchanges would compete on liquidity, distribution, and user experience, not on proprietary asset wrappers.

The Internet Capital Markets Endgame

Tokenization has the potential to create something finance has never had before: truly global, 24/7 capital market infrastructure.

But getting there requires avoiding the trap of fragmented token standards and synthetic assets.

The next few years will determine whether tokenization simply recreates the old system on new rails or unlocks a more open financial architecture.

The technology is ready. The question now is whether the institutions can agree on the rules.

With love,

Cami, founder of The Defiant

Forwarded this newsletter? Subscribe for daily insights and curated news from The Defiant team, Monday-Saturday. It’s free.

Subscribe to Defiant Daily

🎬WATCH

Optimism Is Done With “Ethereum Alignment” — Users Come First

In this episode of The Defiant Podcast, Cami sits down with Jing Wang to discuss how Optimism is evolving and why the debate over what counts as a “real” Ethereum L2 might be missing the point.

Watch the full interview: