The hottest topic in the market recently is definitely the @xStocksFi stock token application~ 🔥 Launched by @BackedFi, the core mechanism of xStocks is 1:1 backing with real assets. Each xStock token circulating on the blockchain (for example, representing Apple Inc. with $AAPLX) is backed by a corresponding real stock, held in custody by a regulated financial institution 🏦. In addition to making U.S. stock trading available 24/7, the biggest breakthrough is that DeFi mechanics can be applied to stocks. The reason the DeFi world has always been so fascinating is its composability. The BTC/ETH we hold can be used as collateral, for mining, and to earn transaction fees, adding an extra layer of thick returns to the underlying assets, greatly enhancing capital efficiency 📈. Now users can deposit their xStock tokens, such as $NVDAX or $TSLAX, into @RaydiumProtocol to earn transaction fees as LPs. Currently, the common yield is over 50% 💰. However, one aspect worth noting is its liquidity depth ⚠️. Although mainstream pools have around $1M in depth, it is clearly still far from enough for such large-cap stocks. Moreover, the LPs on-chain are driven by AMM, and the trading hours are somewhat disconnected from U.S. stock market hours, which can lead to frequent price deviations from the underlying stocks. In the past few days, the trading volume has been very high, mainly due to arbitrage, but now that the U.S. stock market has closed, the trading volume has become quiet again, with only a few hundred thousand in the last 12 hours. This situation has caused LP returns to be not as good as expected, and transaction fees may not necessarily cover potential losses 📉. If liquidity does not improve, this vicious cycle will continue. But personally, I am still very much looking forward to the composability that stock tokens can bring, which is expected to truly take DeFi mainstream; it just depends on whether the critical liquidity issue can be resolved ⚖️.