Tokenized Stocks on Cryptocurrency Exchanges Have 'Significant' Trading Cost Divergence

Tokenized stocks on cryptocurrency exchanges have been found to have vastly different trading costs, according to a study by CryptoRank. The research compared the execution costs of tokenized versions of Nvidia, Microsoft, Meta Platforms, and Tesla across Bitget, Binance, and Gate.

The results showed that Bitget's Reality rTokens had the lowest simulated slippage for $1,000, $10,000, and $50,000 orders across all four stocks. The estimated slippage on its rTokens ranged from 9.6 to 13.3 basis points for $50,000 trades, which was between 45% and 58% below the next-best fully executable venue.

The study found that Bitget's stronger performance on larger orders came from the volume available behind the best quoted price. Reality rTokens also had the highest balanced displayed liquidity within 25 and 50 basis points of the midpoint across all four stocks.

The findings challenge the idea that tokenized versions of the same stock are interchangeable, as each product trades on a separate order book with different market makers and redemption mechanisms.