Unchained - How Tokenized Stocks Could Undercut Interactive Brokers' 77% Profit Margin

Episode Date: August 28, 2026

Coinbase just launched fully backed tokenized stocks on Base.  Dromos Labs’ Alex Cutler says they’ll chip away at Interactive Brokers "77% profit margin." ======================================================== Thank you to our sponsor! ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Visit⁠⁠⁠⁠ 1inch.com⁠⁠⁠⁠ to swap tokenized securities, crypto and more. Simple. Secure. Self-custodial. Whatever asset you’re buying - swap it at⁠⁠⁠⁠ 1inch.com⁠⁠⁠⁠ ======================================================== Coinbase this week launched tokenized versions of Apple, Nvidia, Meta, and Google stock on Base, moving past the prior synthetic tokenized-stock wrappers. The tokens are fully backed, held in trust, with ETF-style minting and redemption. Alex Cutler, CEO and Co-Founder of Dromos Labs, joins Laura Shin to unpack what real backing changes about tokenized stocks, and to argue decentralized exchanges can beat legacy brokers on cost and access. Cutler points to Aerodrome's roughly 25% share of AMM volume on the new assets, about $80 million traded and 5,000 wallets active within days, plus integrations across nine DeFi protocols including Aave, Morpho, and 1inch. He argues Interactive Brokers extracts a 77% profit margin as a middleman, and cites Nvidia's earnings, released after the bell, as proof onchain markets kept pricing news around the clock. They also cover the SEC innovation exemption and a roadmap of more assets, a Centrifuge migration to Aerodrome, and a launch on Circle's Arc chain. Host: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Laura Shin⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, Host / Unchained Guest: ⁠⁠⁠⁠Alex Cutler - CEO and Co-Founder of Dromos Labs Timestamps 🪙 01:15 How Cutler splits tokenized stocks: real backing vs synthetic wrappers 📈 04:44 Cutler's launch numbers: 25% of AMM volume, $80M traded, 5,000 wallets 💧 13:10 1inch Aqua: back multiple liquidity positions with one wallet balance at http://unchainedcrypto.com/go/1inch-x 🧩 13:59 Why composability across 9 DeFi protocols is Dromos' biggest draw 🌙 19:11 Cutler on 24/5 oracle risk: weekend price gaps are a feature, not a bug 🏛️ 24:23 Cutler on the SEC exemption bid and Armstrong's 10%-of-GDP vision Learn more about your ad choices. Visit megaphone.fm/adchoices

I like to think about this as like the internet allowed anybody, you know, to do what Stephen Spielberg did. You know, create content, movies, films. I don't know if you've seen obsession, but, you know, this is a guy who came out of creating content on the internet, has now created one of the highest grossing films to ever exist. And what these markets are going to allow people to do is anyone can now be Kim Griffin, right? They can come on chain and they can participate in the very apt of market making. in a really incredible way. Hi, everyone. Welcome to Unchained.

You're a no hype resource for all things crypto. I'm your host, Laura Shin. Thanks for joining this live stream. First, we'll take a quick word from the sponsors who make this show possible. This episode is brought to you by 1 Inch Aqua, the shared liquidity layer from 1 inch. Back multiple liquidity positions with one wallet balance and keep your tokens in your wallet until a swap fills. See how it works at 1inch.com slash aqua. Today's guest is Alex Kettler, CEO and co-founder of Dromos Labs.

Welcome, Alex. Thanks for having me. Good morning. Yeah, excited to chat. So Coinbase jumped into the tokenized stocks race this week by launching tokenized Apple, Nvidia, Meta, and Google on base. And there's already been a number of tokenized stocks that are out in the market, but, you know, as people are learning on the back, and they can be quite different. So kind of maybe explain some of the things.

the different types in broad strokes and explain what type the coin-based tokenized stocks are. Yeah. Thanks for having the end. This is like an incredibly exciting time for us. So I can't wait to jump in. Before I answer that, I'll say, you know, what's the overall vision here? I think in the words of my friend Jesse Pollack, the founder of base, you know, on chain, what we're trying to build is the most vibrant, deepest, richest, capital market in history, right? And we can do that because traditional markets, they are only open, right, for about a third of any given week. They work bankers' hours. And on-chain, our markets can be faster, cheaper, globally accessible, 24-7, 365, and the assets that power them are fully programmable.

So this is like bringing the network effects of the internet to financial markets for the first time. So you're correct. This is a very big moment for tokenized stocks because these represents something very different than the versions we've seen before. Prior versions, which I like to think of as kind of betas for tokenizing a real-world asset like a stock, they were largely synthetic representations, debt claims, a derivative wrapper, or something like that. And that, of course, just adds friction, right?

it adds risk and it adds cost to the usage. And any friction cost or risk will hold back their ability to be adopted freely. What Coinbase launched is a paradigm shift moment. I think this is leaping far ahead of the solutions we've seen because it is fundamentally a representation of the actual underlying asset in the stock. Every token that you see today issued on base, you know, it's backed one by one by an actual share, and it's custody and issued by a regulated custodian, right? It's held in trust. And the Mint and Redeem model here is the exact same one that we see in traditional ETFs. And so it's

basically the gold standard for this type of thing. And this is really critical because if you look at, some of the existing solutions out there right now, they will be very clear in their terms and conditions that you do not actually have any right to the underlying thing, right? That this is just a token. If something goes wrong, you know, you definitely can't sue us, you can't come claim it. And what Coinbase has said from day one is this is actual

beneficial ownership. This is the real thing. And for us to have true adoption parity with traditional markets, to have true price parity, you need to have functional parity, and this is the first true version of it we've seen yet on chain. Yeah, it's super interesting. Like, once I started digging into the details, I was like, wow, it gets kind of complicated. But I do agree that, you know, what you have built seems kind of like a superior product in multiple different ways.

What kind of volume have you seen out of the gate? Yeah. I mean, this is really incredible. And, you know, we've been working as a close partner to Coinbase for some time since the launch of base. And we've helped them to stand up what is the highest volume markets around the top traded digital asset in Bitcoin today. So on base on the Aerodrome, many weeks do more volume than every other chain, every other exchange combined on the world's top digital asset. And same thing for global FX markets, right, which is another trillion dollar market. aerodrome and base today do more FX volume than pretty much every other chain and exchange

combined most weeks. So we had high expectations going into the launch of tokenized stocks, and I think we've blown past them. So as you mentioned, the opening set were four stocks, you know, tokenized Apple, Navidia, meta, et cetera. And the, in just I guess the first few days here, right? We have captured about 25% of the AMM volumes on these tokenized assets across all exchanges and chains and issuers, right? And this is like kind of a soft launch for us. I think we weren't anticipating it to go quite this fast. But, you know, even over the last weekend, before we were even able to announce, Eridrim was the top AMM on three or four of these assets and we've seen volumes scaling up basically exponentially ever since then.

So I think within the last 24 hours, if we're saying it was about 25% of the total share, I think that was about 25 million in volume. I think we've done about 80 million since launch. That's creating an extraordinary amount of, of course, fees for users of Aeroom, which is pretty incredible. I think there's already 5,000 wallets, you know, holding these assets. assets and that is growing very, very quickly. And I think one of the most exciting things about this is that we are already beginning to

see signs of these on-chain spot markets engaging in price discovery. Because as I mentioned, traditional markets, they close, right? They close at the end of the day. They close over the weekend. And there was a big moment yesterday in the markets closed and the video came out and announced their earnings, right? And while the stock market closed at a particular price, on-chain markets continue to operate.

And what we saw was millions of volume pouring in to the Navidia pool, right, on base and on aerodrome. And the price rising higher than the close, so much like an aftermarket is going to sort of price in those earnings. And that's what we expect the future to be here, right? We've just started with four of these, we've captured a significant portion of the overarching market.

We expect them to grow and scale significantly, and we expect a lot more assets, and that increasingly on-chain markets will be the venue for price discovery, for permissionless market making, and basically this future of on-chain finance that I think we've all been dreaming of, you know, for some time. Yeah, and I want to dig into more of the details about how it works on the back end,

because this part, you know, is quite fascinating. There's, I think, a sense already that there's many different flavors of these. You know, we saw a few years ago when Robin Hood initially did the tokenized versions of, I forget which I think it was like SpaceX and was it Open AI, I think was the other one. And clearly, you know, there was some, you know, drama that broke out into the public about sort of what those shares actually were. And so, like, you kind of have to dig into these details and then back end to sort of understand. So explain, like, how the tokenized stocks on Coinbase have been set up on the back end. Yeah.

I mean, I think the critical thing here is, like, if you've been on chain for a while, you know to do your due diligence on what a token. actually represents and of course what it doesn't represent. And of course, there's been a lot of discussion and evolution over the years on understanding what it means to have a token that represents some sort of immutable on-chain utility that has some sort of actual claim on value. And you're even beginning to see, right, the synthesis between tokens and equity and implying some kind of legal ownership. And I think that this analogy is helpful for on-chain audiences because if you go look at the terms and conditions, right, when you are engaging with many of these other derivatives or debt instruments or wrappers, they're going to be very clear that you do not own when using these things or you do not get the beneficial ownership claims of them, right?

And we know what it means to own something that might be a version of something, but when things get hairy, you know, that's when it's going to burn you. And that has held back adoption. And that's why I think like we've seen such consolidation in stable coins amongst the stable coins that do fundamentally represent the underlying thing and the ease of transacting between the real thing and the digital thing is very, very easy. So the key thing here is that it is held in a beneficial trust and that that. that the benefits of it are conveyed to the users of it. Like Coinbase says this is the real thing, and that is a big difference between other digital assets where they're gonna be very clear that it's not necessarily the real thing. And that means that they can bring on chain, right? Things like token, or sorry, stock splits.

They can bring on the chain things like dividends, and they can increasingly, I think, close that gap between what it means to hold a stock and a traditional brokerage and to hold a digital representation of it. And I think, honestly, we're in early days here. I think Coinbase is going to be very, very excited to ensure that more and more of the beneficial ownership translates through to users of these assets and of these tokens over time. But the net net is this is the real thing. And nobody else will tell you, you know, in their terms of conditions,

It's the real thing in the same way that Coinbase is here as well. Yeah, yeah, I found the way that it does the dividends thing pretty interesting because, you know, these are actually also freely tradable. So, you know, not every customer is KYC. So could you just explain like that mechanism, like how that works? I found it really interesting. Yeah, you can think about it as there is obviously the version of the underlying tokenized stock that exists on chain. right? So the number of shares or the number of tokens will not necessarily change

as you see dividends flow through to them or something like a split. But what they have is an off-chain multiplier, right? So you're basically translating the delta between one apple plus dividends and or stock split or things like that. So that allows the on-chain users of that to understand that when, an authorized party goes and mints and redeems, it is going to reflect not just that one apple, but that one apple plus that multiplier or something like that. So it allows you on chain to participate, use that token and that token, because authorized participants will be able to realize the value of that multiplier could then reflect, you know, the underlying. All right. So in a moment, we're going to talk now about how these tokenized stocks will be used

in Defi, but first we're going to take a quick word from the sponsors who make this show possible. $540 million. That's how much concentrated liquidity sat idle in a given week in the first half of this year. About 30% of the Defi TVL, if you're wondering. That's according to Dune Research commissioned by One Inch, but there's a solution. One Inch Aqua is the new shared liquidity platform. It lets LPs back multiple positions with the same token balance and keep their tokens in their wallet till a swap comes. Why does that help? Because the LPs don't have to split their tokens

across positions. They can cover more market conditions and pairs with their full balance. That means more activity across deeper liquidity. See how it works at 1inch.com slash aqua. Remember that providing liquidity carries risk and fees aren't guaranteed. Back to my conversation with Alex. So I'm sure that the feature that most crypto natives will be excited about is Composability. And at launch, you have integration with nine DFI protocols, or, well, I mean, you're one of them. So Aerov is one. Aube Morpho, Euler, zero X, one-inch, khyberswab, cowswap, wasabi. And these are, you know, all different kind of sectors of DFI.

So explain what it is that users can do with tokenized stocks in DPI. Yeah. So this is a great question because this is where I think we can. get really excited because this is not just a better version of a tokenized stock at this point. This is a better version of a stock period because of the programmability and the composability that comes with it. So we think about this from a few dimensions. I mean, one is first to talk about the basic portion of this, which is, you know, these

stocks now exist on an exchange. and most users of stocks internationally, they have to go through brokerages, right, and things like interactive brokers. And interactive brokers is an institution, right? It's got thousands of employees. It has, you know, billions under management, and it extracts, you know, a staggering, like, 77% profit margin on that type of activity. So the first and most critical thing is that we are giving access, right? to people to engage with these assets who otherwise would have had to have gone through a very expensive, a very clumsy, of very slow intermediary.

And the most exciting thing is that even in these first few days, we have seen moments where you can get better execution on these assets than you can even through this, you know, a billion dollar traditional incumbent. So access, right, in just trading or in the active participatory. betting market making is like the base level here. But what makes it even more exciting is the programmable portions of this and the composable portions of it. And this is critical because, of course, we've had tokenized stocks on chain for a

minute in like perpetual markets, right, as derivatives. And those are fine if you just want to sort of bet on what the price is going to be. And you can use things like RFQs today if you want. want to maybe trade these things in certain environments, but that is just a market. Or that is not a market, that's just a dealer connecting traders and market makers. A spot pool is the actual market for these assets.

It's where they actually sit. It's where people can provide liquidity and anyone can trade 24-7, 365. And I like to think about this as like the internet allowed anybody to do what Stephen Spiel's Spielberg did, you know, create content, movies, films. I don't know if you've seen obsession, but, you know, this is a guy who came out of creating content on the internet, has now created one of the highest grossing films to ever exist. And what these markets are going to allow

people to do is anyone can now be Ken Griffin, right? They can come on chain and they can participate in the very apt of market making in a really incredible way. And so we are seeing already all of these protocols line up to build these really interesting things, these programmable building blocks. We've seen like Arcadia, right, launching their leveraged LP positions. We've seen folks like Bitwise build the first automated token portfolio, right, which allows there to be no fund wrapper. All these tokens stay in your wallet and things like that. And it gives people access to these types of products and services and tokenized equities.

And so we think over time, the spot market, because of all the composability that comes with it, these will become some of the deepest, richest markets for these types of assets that everything else quotes against, that everything else hedges against, and will really be the foundation of the trade of tokenized stocks, tokenized effects, and all these other trillion-dollar markets that are quickly coming on chain.

Yeah, so, you know, I could imagine this, this would be very exciting for people to put these assets into defy, like for instance, as collateral. But I do have some questions about that because obviously the underlying does not trade 24-7. And so I know Chainlink is providing a price Oracle, but that's obviously to the underlying, which again is going to trade. It's a 24-5 Oracle, as far as I understand. So what does that mean for people who want to trade these over the weekend? You know, you could imagine situations where the price could start to dislocate somewhat significantly from the underlying. And potentially you might even see also thinner liquidity on the weekends, which, you know, those elements combined can cause problems come Monday morning.

So what are some of the risks that users should be aware of and how. are aerodrome or any of the other entities here, you know, trying to mitigate these risks? Yeah. I mean, that's a great question. And that goes right to the importance of these deeply liquid spot markets. Because in our opinion, price dislocations when markets are closed is the feature, not the bug of these tokenized on-chain markets. because like we talked about with the Navidia earnings that we saw yesterday, that price dislocation on chain was not a slippage thing between the closed price and the actual. That was on-chain markets

participating in the act of discovering what they believe the opening price would be. And that only works, right, to the point we were discussing earlier, if the asset you are trading is an actual claim one to one on the underlying thing. So when after markets, right, we see a lot of speculation on NVIDIA because of a earnings beat. That is basically the market saying, well, hey, we think we're able to get some NVIDIA today. And by the time the market's open, we think the price is going to be somewhere else. And that is why we think, like, over time, these markets will increasingly be the venue for that on-chain price discovery.

Things like the ChainLink Oracle, I think that will become 24-7 very soon. I know that they're working on it. But lending markets, this is why we are the bedrock of things like the Morphos, on-chain Bitcoin lending product, right? That's available to Coinbase customers today. Because that market, if it needs to liquidate, it's finding a price and it's finding deep liquidity on Aerodrome and the AMM pools there. And for the lending to scale up, right, on these new tokenized equities, they need deep

liquid AMM pools on each of these tokenized stocks. And their Oracle won't necessarily be the price that was the market price at close. It will be the price that the on-chain markets are pricing it at. And this is truly what we think is so exciting about this because of the open, composable nature of this, because everyone can participate in the act of market making, because these markets exist 24-7-365, and because they're fully transparent, we believe increasingly these will be the markets whereby price discovery happens. And it was actually very interesting with the Navidia earnings.

We actually saw liquidity providers positioning on either side in various weights ahead of the earnings, right? Either if they were a bit more bullish, maybe on the buy side, if they were a bit more bearish on those earnings on the sell side. So there was deep liquidity on either side. And then you saw the market contract, right? And the liquidity sort of come tighter around the range on the day of. As lending markets scale up, you know, that is the type of liquidity that they will be able to tap into. And the Oracle will not be some off-chain connection between the NASDAQ and these on-chain markets, but will increasingly be the liquidity on those tokens in AMMs like ERADrome.

And out of curiosity, when you said that ChainLink is working on having the Oracle work on the weekends, since I think they're supposed to reflect the stock price, I'm confused how that would works. Yeah, I mean, I'm not super deep in the weeds. And, you know, that's just something I was, was told that they're working on the 24-7. But, you know, you could imagine a scenario where, you know, chain link, of course, aggregates a bunch of different price feeds, right, and a bunch of different sources of truth to ensure that those oracles are extremely resilient. And my expectation would be over time, different types of products and services, they certainly look at closing prices and redemption values, but they also look at liquidation.

values and prices within AMMs and things like that. Okay, okay. So I'm sure our mostly U.S. audience is going to be interested in knowing because so currently these are not available in the U.S. surprise, surprise. But as far as I understand, Coinbase has applied for an SEC innovation exemption. However, I think that even if that were granted, U.S. users would still not be able to use the tokens as they're currently designed. So I think it would need to be some kind of separate token for U.S. users.

Like, it almost seems to me like it might have to be an inferior product to the one that it was launched. So could you kind of explain, you know, what this innovation exemption was, is that you applied for, like, what it would allow? And, you know, obviously I know it has been granted. So, you know, like the details would need to be worked out. But just at this point, time, what do you think the product would end up looking like in the U.S.?

Yeah. I mean, I think Coinbase has been very, very clear, and they've been some of the biggest advocates in Washington for not just our industry, but for bringing all of these assets on chain in the most robust and permissionless way they possibly can. And, you know, I guess I'll just be careful. in what I say, but I think when you've looked at some of the leaks that have come out of the SEC, I think we've done this a few times now, right? Something very big.

Guidance is coming on how the SEC will treat tokenizing things like U.S. equities in a very global way. And, you know, I'm just going to take what I've been hearing, you know, through public channels, which is they've had a lot of this ready to go. They're very interested in getting it out. And of course, there are a lot of interested parties like us, like Coinbase, in seeing that come out. But they've been waiting for clarity. Perhaps there's some game mention even here. And, you know, the SEC's only going to come out with that.

Once it's clear, clarity's either passing or not passing or things like that. But from what we've heard, I think it is a version of things that is very, much aligned with the direction that CoinBit has been taking. And I think where the separation will exist is between what you can do with these assets on chain and what you can do with these assets if you are willing to KYC and take them and use them on Coinbase. And so in some ways, it's the best of both worlds, right? The tokens themselves are still permissionless and accessible and composable across Defi,

that for the full experience, say I wanted to take my Apple shares and I wanted to vote in an issue that was being brought up for Apple shareholders to vote on, I might need to go do that on Coinbase.com, you know, with my KYC. And so, you know, if I had the bet, I would I would bet that when we do eventually get the guidance from the SEC on how they plan to treat tokenize equities, it will be very synergistic with the product that Coinbase is brought to market, while also unlocking some of these benefits for U.S. users of these products today. Okay. Okay. Well, yeah, I, you know, looking at that, kind of thought it seems like it might be more limited in DFI, but it feels like, you know, you guys have thoughts on how to still allow

usage there. So let's end on another question that I'm pretty sure the users will want to know about, which is which other assets are you considering adding or what are the criteria for deciding and when do you think you will be adding new ones? Yeah. I mean, I think both us and Coinbase are very, very excited to bring as many of these to market as quickly as we can, especially. seeing the impact of these assets so far. You know, on Aerodrome, we redistribute 100% of the protocol's revenue right back to users of the token. The Arrow token represents 100% claim on that revenue.

And you can see, even in a few days of these, they generated tens of thousands of fees, and those fees go right back to users of our protocol. So we're deeply incentivized, and all the users of our protocol are deeply. incentivized to see massive growth on these tokens and real world assets on our platform. So I'd expect to see a whole bunch more over the next week or so scaling up significantly. We've also seen new products like Reserve launched on our platform, a tokenized Meg 7 token. We're very excited. I believe the news will come out today that centrifuge.

is bringing some of their products over from another decks, and we'll be hosting that liquidity on AeroDrom. And so it won't just even be the tokenized stocks and things you've seen coming out of Coinbase. We will be the hub of these new on-chain financial products and primitives, because we want to dominate them just the same way we dominate the top digital asset in Bitcoin and on-chain FX, because we think these are the most important growth verticals of the on-chain economy. And like Brian Armstrong said,

Coinbase's belief is that in the next five years, we will bring 10% of global GDP on chain. And I think that seemed a little crazy to folks when he said that on our earnings call, I think, late last year, kind of in the midst of the bear market. But seeing the rate at which these are being adopted, seeing the rate at which we are already competing with folks like interactive brokers,

some of the most, you know, complex, long-lasting billion-dollar incumbents, I think we're all very, very anxious to see more. So by this time next week, there will be a lot more, I guess, is what I can say. And we'll be bringing a number of these things to market. And we're also very excited to be launching soon on ARC, which is Circles Chain and where we're going to see, I think, significant growth in the FX category as well. Oh, wow. Okay.

Great. Well, I look forward to seeing those announcements. Thank you so much, Alex, for sharing your news and giving us a taste of what's to come. Thank you so much for having me. And thanks to everyone for joining this live stream. We will catch you next week. Nothing you hear on Unchained is investment advice. This show is for informational and entertainment purposes only, and my guest and I may hold assets discussed on the show. For more disclosures, visit Unchained Crypto.com. Thank you.