OKXICE, owned by Intercontinental Exchange and an affiliate of OKX, plans to trade stock tokens around the clock against automated pools instead of order books. Prices will depend on pool inventory rather than NYSE quotes, and 16 companies have already objected to third-party tokens of their shares.
OKXICE will price off-hours stock trades from the balance of a DeFi-style pool, not from a new bid on the NYSE. The venue is owned by Intercontinental Exchange (ICE) and an affiliate of OKX. Its public notice says stock tokens will trade around the clock using technology behind Uniswap.
Pool pricing changes what buyers pay
In the new arrangement, traders would deposit stock tokens and stablecoins into an automated pool, and a buyer would trade against that inventory. Software adjusts the price as the token-to-dollar balance shifts, so a single purchase can make each additional fraction of a share more expensive than the last.
CryptoSlate's hypothetical shows the effect. In a pool of 100 tokens and $10,000 with a $100 starting price, a $1,000 buy returns about 9.09 tokens rather than ten, an average cost of $110 per token. A pool with ten times the shares and dollars would average roughly $101 per token for the same purchase.
OKXICE's notice also says the exchange won't be subject to Regulation NMS, the framework that includes some of the ordinary price protections connecting US equity markets. The platform plans to show estimated execution terms and fees, and users can set a slippage tolerance.
Weekend trading carries its own risks
The smart contracts won't use a stock-price feed from the NYSE or elsewhere. OKXICE says it will display outside market prices for reference, but the software will use only the assets in the pool.
Professional traders could try to close gaps between the token and the ordinary share. However, the underlying shares could be hard to obtain for the hedge, and hedging could cost more than the arbitrage earns. The exchange also must be able to halt trading in a token when the underlying stock has problems.
Sixteen companies object
As of Oct. 19, 16 companies had objected to third-party tokenized versions of their stocks trading on OKXICE, including Microsoft, Alphabet and Goldman Sachs. Fifteen were on the original proposed roster of 62 companies, roughly 25% of that list.
Most objectors haven't explained their reasoning. Applied Optoelectronics is the exception: a representative reportedly told The Wall Street Journal the company wasn't sure how the trading might affect the stock's price, liquidity or volatility.
Even with $100 displayed as the reference price, spending $1,000 wouldn't guarantee ten shares.
Source: CryptoSlate
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