The HIMS token is designed to track shares of telehealth company Hims & Hers, which trades on the New York Stock Exchange (NYSE). On Robinhood Chain, traders can buy and sell the tokenized stock alongside crypto assets such as memecoins.

That is what happened with BONER, a deliberately ridiculous memecoin that was paired with HIMS in a liquidity pool. The pool allowed traders to swap between the two tokens.

At one point, it held 31,198 HIMS tokens — more than half of the 58,714 tokenized HIMS shares in circulation. The imbalance briefly pushed the Robinhood HIMS token to $132.64, more than four times the $28.84 closing price of the real HIMS shares on the NYSE.

The episode offers a striking example of what can happen when real-world assets are placed onchain and made usable in crypto markets. Thomas Probst, a research analyst at Kaiko, told Magazine:

“A listed stock effectively becomes a composable DeFi asset at an unprecedented scale, in the same way Ether did.”

The episode also highlights an important distinction for readers: a tokenized stock can be linked to a listed company without every onchain price becoming a reliable reflection of the underlying share price. In this case, the liquidity pool’s composition and reserves played a central role in the divergence.

Why would anyone want to trade a memecoin against a tokenized healthcare stock? And what happens when onchain markets make even more unusual pairings possible?

Onchain finance is for the “crazy ones”

The development recalls the summer of 2020, when DeFi pioneers were farming for yield, deconstructing legacy finance and trying not to get rugged in the process. Mike Dudas, co-founder of 6th Man Ventures, described the ethos in a post on X:

“Onchain finance is for the crazy ones, the misfits, the rebels, the troublemakers, the round pegs in square holes.”

Robinhood Chain appears to be a new iteration of that phenomenon, creating uses for tokenized stocks that few had considered. Within less than three months of its launch, traders on Robinhood had created crypto-native pairings including BONER/HIMS, AI/NVIDIA and SPACEHOOD/SPCX.

The basic concept is straightforward. Rather than simply buying and holding a tokenized stock, users can place it in a decentralized liquidity pool alongside almost any other token. Traders can then swap between the two assets, creating a market around the pair.

One of the launchpads behind the trend, LONG, said its stock-paired markets generated more than $425 million in trading volume over a 24-hour period on Sept. 2, while nearly $12 million was locked in stock-token liquidity. LONG reported the figures in a post on X.

Stock tokens where they are the quote asset. Source: DeFi Prime

Sergej Kunz, co-founder of DeFi aggregator 1inch, told Magazine:

“The opportunity tokenized equities present is much bigger than assets appearing onchain. [...] this is not just about changing the venue. It is about creating an asset that can plug into an open financial system.”

Angelo Aspris, a finance academic at the University of Sydney, said the structure creates a range of new possibilities:

“Once equity exposure becomes programmable, it can be used as a quote asset, collateral, loanable inventory or margin for derivatives.”

Once a stock becomes a token, it does not have to remain only a stock. It can become a component of entirely new DeFi markets.

A familiar mechanism with unusual assets

The underlying infrastructure is not particularly revolutionary. These markets use automated market makers (AMMs), a type of decentralized exchange mechanism that relies on liquidity pools and algorithms to set prices. AMMs allow traders to swap one token for another without a traditional order book or a matching buyer on the other side.

The novel element is what those markets can contain. In traditional stock markets, shares trade against currencies or other conventional financial instruments. In onchain finance, a tokenized stock can become one side of a market with almost any other asset that has sufficient liquidity.

Reid Noch, vice president of US equity market structure and electronic trading at TD Securities, said AMMs remain “very novel when compared to traditional markets.” He described the idea of making a stock part of the quote asset and liquidity for another market as “interesting,” but said the use case could make institutional adoption more difficult. Noch told Magazine:

“As long as they are primarily used to drive liquidity in memecoins, it will be challenging for more traditional players to take them seriously.”

Stock-paired markets generated more than $425 million in trading in 24 hours. Source: longdotxyz

The pairing may sound strange, but it has a clear logic from a DeFi perspective. Traders do not necessarily need a fundamental reason to pair two assets; they need a market in which they can exchange one for the other.

The more significant experiment is whether tokenized stocks can become reusable financial building blocks rather than merely digital versions of traditional shares. That question depends not only on whether the tokens can be traded, but also on whether the surrounding markets can provide enough liquidity and a dependable connection to the reference assets.

Thin liquidity can produce distorted prices

The BONER/HIMS episode shows that unconventional pairings can produce unconventional outcomes.

Aspris said the extreme divergence between the tokenized HIMS price and the underlying stock was largely caused by “thin reserves” and “temporarily restricted issuance.” He warned:

“This creates the conditions for these events and increases the potential for strategic exploitation or manipulation.”

Arbitrage would normally push the tokenized stock toward the price of the underlying shares. However, that connection can weaken when liquidity is thin or the real-world market is closed. Probst explained:

“Arbitrage relies here on a single actor rather than a continuous competitive mechanism like the one seen in traditional stock markets. These pools can therefore produce unreliable price signals, without any real transmission to the reference market.”

Memecoin/stock-token pairings are succeeding at scale. Source: @howdymary

Noch was similarly skeptical that such pools would become the primary venue for discovering the price of tokenized stocks:

“I still see price discovery happening more in traditional markets, and AMMs being used [by] arbitrageurs to keep the market in line. [...] I struggle with how these markets will drive price discovery given their low volumes compared to traditional markets.”

Price discovery may not be the primary objective

Memecoin/stock pools may be able to trade around the clock, but the markets remain immature and, for now, largely isolated from traditional markets.

Even so, they are already generating demand for tokenized stocks and testing how those assets behave when connected to DeFi, Kunz said:

“Memecoin pairs might not be the number one case for tokenized equities, but are yet another source of demand, volume and liquidity for those assets.”

This leaves several practical questions for the next stage of the market: whether liquidity grows beyond isolated pools, whether arbitrage can keep token prices aligned with their reference shares, and whether the assets find uses beyond memecoin pairings. The experts’ comments suggest those questions remain open rather than settled by the BONER/HIMS example.

Memecoins may also be only the beginning. If tokenized stocks become established DeFi building blocks, there is no obvious reason they would need to be paired with other stocks or cryptocurrencies. They could potentially be traded against tokenized real estate, commodities, artworks or even tokenized farts — a concept that already exists.

That does not mean such markets will emerge, become popular or make economic sense. However, the BONER/HIMS experiment shows that once real-world assets become composable onchain, markets can form around combinations that traditional finance would never have considered.

Aspris said the experiment remains in its early stages:

“The experiment is useful and the direction is clear, but calling tokenized equities a finished DeFi primitive would be ahead of the facts.”

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