OnChain IPO: How Binance will exchange the world

A short history of the IPO

In 1602 the Dutch East India Company raised capital from the public to fund long-distance trade. That offering gave us the two ideas every IPO still rests on: ownership split into small, transferable units, and those units sold to anyone willing to buy.

Through the eighteenth and nineteenth centuries, merchant banks in London and New York began to underwrite: they bought the whole issue and resold it to clients. The issuer got certainty of funds, the bank earned the spread, and investment banking was born. A share at that point was a physical thing, an engraved certificate carrying the company's name, the holder's name, the number of shares and a serial number, signed and sealed. Your broker either mailed it to you or kept it in a vault on your behalf.

After the 1929 crash the United States passed the Securities Act and the Exchange Act and created the SEC. The founding principle was simple: the regulator does not judge whether a company is good, only whether it has told the truth. Register and disclose. That framework remains the global template.

Between the 1960s and the 1990s, book-building became standard. Underwriters canvassed institutions, then set the price and decided who got stock. Pricing became better grounded, but allocation power moved to the banks, and many later problems trace back to that. The back office changed too. As volumes surged, paper settlement broke down, and Nasdaq (1971) and DTC (1973) were set up in response. Certificates were immobilised in a central vault; from then on a trade simply changed a number on DTC's ledger.

From 1999 to 2003 the dot-com bubble produced a run of scandals: hot IPO shares steered to favoured clients, and analysts writing glowing research to win banking mandates. The response was Sarbanes-Oxley in 2002, which mandated internal-control audits, and the 2003 Global Settlement, which walled research off from investment banking. Compliance costs jumped and small companies found listing prohibitively expensive. Sell-side research shrank, and small caps have been thinly covered ever since.

Everything after 2004 has been an attempt to route around the problem: Google's Dutch auction, the JOBS Act, Spotify's direct listing, SPACs, and in crypto, ICOs and STOs. Each fixed one thing and broke another. Investor protection, low cost and open access have been a trilemma: historically you could pick two. The onchain IPO is the latest attempt on that line.

How a traditional IPO works

From appointing advisers to the first day of trading usually takes 12 to 18 months. Add the internal clean-up that comes before, and the whole journey is closer to two or three years. There are five stages.

1. Pre-IPO preparation (12–24 months before filing).Test the company against listing thresholds, the equity story and the comparables. Then fix what needs fixing: restructure the group, clean up the accounts and choose a venue.
2. Assemble the team and kick off (4–8 months).Lead underwriter; counsel for legal due diligence and prospectus drafting; auditors for three years of financials; an industry consultant to frame the narrative, pick the peer set and write the industry section.
3. Filing and review (3–6 months). Draft the prospectus, file, and answer the regulator's comments. This is where timetables most often slip.
4. Marketing and pricing (1–2 months). Early-look meetings to sound out valuation, the roadshow, pricing and allocation, then the bell.
5. Life as a public company. Lock-ups (typically 180 days), continuous disclosure, analyst coverage and follow-on offerings. Follow-ons, in aggregate, raise several times what IPOs do.

What is wrong with the traditional IPO

• It is expensive. The gross spread on a mid-sized US IPO has sat at around 7% for decades. Add legal and audit fees and the all-in cost is roughly 10% of proceeds.
• Allocation is unfair. Shares at the offer price go mainly to institutions and favoured accounts. Retail investors get to buy after the first-day pop.
• It is systematically underpriced. The average first-day return on US IPOs has run at around 18% over the long term. The gap between the offer price and what the market would have paid, multiplied by the shares sold, is the money the issuer leaves on the table. That hidden cost is often larger than the underwriting fee, and it accrues to whoever received an allocation.
• The underwriter is conflicted. It serves the issuer and the buy-side at once, and controls both price and allocation. A lower price suits its repeat customers.
• It is slow and hostage to market windows.Twelve to eighteen months from kick-off to listing. If sentiment turns, the window shuts and the sunk costs are gone.
• The plumbing is dated. Shares sit in layers of custody under DTC, so companies often do not know who their real shareholders are. Votes and dividends pass through several intermediaries. Settlement has crept from T+5 to T+1 (2024) but is still not real-time.
• Small companies are priced out. Fixed costs make a raise of a few tens of millions uneconomic. Small caps that do list get little research coverage and poor liquidity.
• Companies list later and later. The median age of a US tech company at IPO has gone from about five years in 1999 to more than ten. The fastest growth now happens in private markets, out of reach of public investors.
• It is fragmented by geography. An ordinary investor in one country can rarely take part in a new issue in another.

Why now

• Regulation. On 15 September 2026 the CLARITY Act failed in the Senate. Two days later the SEC issued a five-year Innovation Exemption, giving tokenized US equities their first lawful onchain trading route, on the condition that the token carries the same rights as the underlying common stock. On 1 September the SEC had also proposed modernising the transfer-agent rules so that a blockchain can serve as the record of ownership, the first time that layer has been touched in decades.
• Infrastructure. DTCC's tokenization service settled its first live trades in July and goes fully live in October. Nasdaq plans to launch Equity Tokens in Q2 2027 and has invested $100 million in Payward, Kraken's parent. In April, France's Lise exchange completed the IPO of ST Group, with the shares onchain from day one.
• Distribution. Payward already offers tokenized allocations in US IPOs, at the offer price, in more than 100 countries. Binance, Robinhood, Coinbase and Crypto.com all have tokenized-stock products in market.
• Data. Tokenized equities represent roughly $2.9 billion onchain (rwa.xyz), or about $4.0 billion of active market cap on Binance Research's count. Monthly volume rose from $237 million in January to $7.9 billion in August. CoinGecko finds that perpetual-futures volume on tokenized stocks is around fifty times spot. Turnover is growing far faster than assets, which tells you demand so far is for trading. Issuance has barely started.

How big is the IPO market

In 2025 there were 1,293 IPOs worldwide, raising $171.8 billion (EY). The first half of 2026 needed only 483 deals to raise $186.8 billion, more than the whole of the previous year, and roughly half of that came from a single transaction, SpaceX's record $86.3 billion float. Deal counts are falling while dollars are rising. The market is concentrating in mega-deals.

But IPOs are only the visible tip. Total global equity issuance in 2025 was $957 billion (Dealogic), and IPOs were less than a fifth of it. The rest was follow-ons and convertibles. On LSEG's numbers for the first nine months of 2025, follow-ons raised 3.6 times as much as IPOs. In the US the ratio for the full year was 3.3 times (SIFMA), and follow-ons have averaged about 64% of US equity deals since 2001.

One layer further out is the stock of listed equity: about $158 trillion of global market capitalisation. Tokenized equities, at $3–4 billion, are roughly 0.002% of that.

Three things follow. First, onchain issuance is starting from effectively zero, and the headroom is several orders of magnitude. Second, the dollars sit in mega-deals, but mega-deals do not need a blockchain. The opening is in the small and mid-sized deals that make up most of the thousand-plus listings each year. India is the proof that such a market can exist: a record 367 IPOs in 2025 raising $22.9 billion, about $60 million apiece, carried by deep domestic retail participation and a busy SME board. An onchain primary market is, in effect, a global version of that. Third, the real volume is in follow-ons, which is why we think they will move onchain before IPOs do.

What an onchain IPO is

https://x.com/cz_binance/status/2097152407147073613

In one sentence: a company sells shares to the public for the first time, with the share register, settlement and trading handled on a blockchain, and all of it inside securities law. It is not an ICO. It is not a wrapper around an already-listed stock. And it is not a pre-IPO token.

How it compares with a traditional IPO:

The pre-listing work (structure, audit, legal, regulatory review) is identical either way. What changes is allocation, registration, settlement and trading. Anchoring buys compatibility. Native issuance buys purity.

The onchain IPO process: three live routes, one common framework

Three routes have been proven so far. The choice has to be made at the outset, because every later step depends on it.

The framework common to all three:

1. Choose the route and test feasibility. Pick the path and the jurisdiction. Tidy up tax and structure. Run a cap-table due diligence that pins down every existing holder's position and rights. If the company has already issued a token, spell out how token and equity relate.

1. Bring existing shares onchain and decide which rights live where. This is normally done with a licensed transfer agent. In practice it means one register with two holding formats, and each shareholder chooses whether to switch. Nobody has to migrate the whole cap table at once. Contract layer: share count, classes, transfer restrictions, lock-ups, dividend and voting rights. Agreement layer: board appointment rights, tag- and drag-along, the more intricate governance terms.

1. Prepare to list. Three years of audited accounts, legal due diligence, industry due diligence, smart-contract audit.

1. Issue. Investors pass KYC and are whitelisted. Pricing can be fixed-price, first come first served (Lise's approach), conventional book-building, or an onchain auction. Settlement is in stablecoins or deposit tokens, cash against shares, atomically.

1. Trade, and keep going. Market-making, research coverage, automated dividends and onchain voting. Secondary liquidity in the first 90 days decides whether the deal counts as a success.

Binance and other crypto platforms may become issuance venues in time. Today what they do is distribution: bringing other people's issues to their own users. What stands between them and issuance is not technology. It is the licence to issue, and a good company willing to go first.

The onchain IPO value chain

A firm like Principia Labs plays a role similar to the Nomad (Nominated Adviser) on London's AIM market: judging whether a company is suitable for listing, guiding it through the process and staying with it afterwards. The difference is that Nomad status is granted by the London Stock Exchange. What is borrowed here is the role, not the accreditation. To avoid conflicts of interest, a firm in this seat should not also underwrite.

Case analysis

https://x.com/gregory_raymond/status/2039591947094921575

The ST Group details are telling. The company had about €3 million of revenue in 2025. There was no underwriter; the shares were sold at a fixed price, first come first served. The platform runs on a private, permissioned chain and settles in bank-issued deposit tokens. Retail investors could take part without a broker. In other words, the first users of native issuance are companies the traditional market would never have touched. Critics argue, fairly, that the real test is secondary turnover in the first 90 days and whether market makers show up.

The biggest dividing line among today's cases is native issuance versus 1:1 anchoring. Anchoring has an obvious advantage: the existing IPO machinery carries over intact and legal risk stays manageable. So several models are likely to run in parallel, the most common being a conventional IPO with a company-approved token available from the first day of trading. That is exactly what Securitize did with its own listing.

Whether legal risk really is manageable, though, depends on who is doing the anchoring. When the issuer sponsors the token, a licensed transfer agent keeps the register and token holders are shareholders. The risk is genuinely contained. With third-party wrappers the risk has not gone away. It has been passed to the investor: the holder is not a shareholder, the issuer can object (AMC and Robinhood are already in dispute), and if the underlying transfer is ever ruled invalid the token's price collapses.

Anchoring also has costs. Two ledgers have to be reconciled indefinitely. DTC, brokers and custodians are all still there, so costs stack up instead of falling away. Instant settlement holds only token to token. And the company still only knows who its onchain holders are.

Risks

• Regulation can reverse. The SEC's Innovation Exemption runs for five years and is an administrative order, not statute. A future administration could unwind it and a court could strike it down.
• Issuer demand is unproven. Cantor Fitzgerald and Securitize announced their onchain IPO pipeline in July 2026 and have yet to name an outside issuer. The pipes are built. The deals are missing.
• Adverse selection. The companies most willing to go first with native issuance tend to be the ones that cannot get to a traditional market. The quality of the first cohort will decide how the whole model is labelled.
• Fragmented liquidity. The same stock can exist as different tokens on several chains and platforms, and prices can drift from the underlying. Getting a deal away is not the same as having a market.
• Platforms bring it in-house. Exchanges and issuance platforms may build their own advisory and origination teams, squeezing independent providers.
• Technology and custody. In September 2026 a software flaw let an attacker drain 4,000 BTC from the Liquid Network. The same failure in a system carrying securities would be far more serious.