Passive Stocks Turn Active: DeFi Unlocks Yield in Traditional Equities

Falcon Finance, a leading decentralized finance (DeFi) platform, has partnered with Backed Finance to integrate tokenized equities into its collateral framework, marking a significant step toward bridging traditional finance and blockchain-based liquidity. The collaboration enables Falcon users to mint USDf, Falcon's overcollateralized synthetic dollar, using Backed's xStocks-compliant tokenized versions of real-world equities such as Tesla (TSLAx), Nvidia (NVDAx), and S&P 500 ETFs (SPYx). This innovation transforms tokenized stocks into yield-bearing assets within DeFi, expanding the range of collateral options for decentralized finance users, according to a Daily Hodl report.

The xStocks, which are fully backed by underlying equities held in regulated custodians, provide direct economic exposure to traditional stocks while operating as transferable ERC-20 and SPL tokens. Unlike synthetic instruments or contracts for difference (CFDs), xStocks represent actual ownership in the equities they track. Chainlink oracles ensure transparent and accurate valuation by tracking real-time prices and corporate actions, enabling seamless integration into DeFi protocols, according to a DL News article. Falcon's system allows users to leverage low-volatility real-world assets alongside DeFi's liquidity and composability, offering a hybrid approach to asset management.

The partnership underscores Falcon's role as a universal collateralization infrastructure, supporting assets beyond digital tokens. As of the latest attestation cycle, USDf's total supply has exceeded $2.1 billion, backed by $2.25 billion in reserves verified by HT Digital and audited quarterly under ISAE 3000 standards. This growth highlights the demand for stable, transparent onchain liquidity solutions. Andrei Grachev, Founding Partner at Falcon Finance, emphasized that the collaboration "extends DeFi's reach into the traditional financial economy," allowing users to maintain exposure to companies like Tesla or Nvidia while generating yield, the Daily Hodl report added.

Backed's David Henderson, Head of Growth, noted that the integration "builds something new" by evolving tokenized equities from value storage to foundational building blocks for decentralized finance. The xStocks program, launched in 2021, has already facilitated tokenized trading across multiple blockchain ecosystems, with Falcon's integration representing a milestone in onchain-TradFi convergence, DL News noted.

Tokenized real-world assets (RWAs) have emerged as one of the fastest-growing onchain sectors, yet most of their $12 billion in value remains passive. Falcon and Backed's collaboration addresses this gap by activating tokenized equities as productive collateral, leveraging DeFi's open infrastructure while maintaining compliance with traditional financial regulations. The initiative aligns with broader industry trends, including Kraken's recent $5 billion in tokenized equities trading volume and tZERO's plans for a 2026 IPO in the tokenized securities space.

As the RWA market matures, Falcon's universal collateral model positions it to capitalize on the growing demand for hybrid financial systems. With USDf's reserves and transparency standards, the platform aims to attract institutions and retail users seeking yield from both digital and traditional assets. The partnership with Backed, however, also raises questions about regulatory scrutiny, particularly as tokenized equities navigate evolving compliance frameworks in jurisdictions like the U.S. and Switzerland, the Daily Hodl report observed.