Opinion: Tokenization of real-world assets faces the risk of "weekend price misalignment".
AI Summary1 min read
TL;DR
The tokenization of real-world assets risks weekend price misalignment due to 24/7 crypto trading versus traditional market closures. Events like factory explosions can cause discrepancies between tokenized stocks and their Nasdaq values, as oracles freeze prices from Friday to Monday. This may lead to arbitrage or undercollateralized lending, requiring better oracle systems.
Tags
RWA Tokentokenizationreal-world assetsprice misalignmentoraclescrypto trading
According to a report by CoinDesk, Marcin Kaźmierczak, co-founder of Oracle provider RedStone, warned that the difference between 24/7 trading in crypto markets and the weekend closures of traditional markets could pose significant risks as the tokenization trend of Real-World Assets (RWA) grows. When traditional markets are closed while on-chain trading continues, major events over the weekend (such as the "Tesla factory explosion") could cause a "price misalignment" between tokenized stocks and their Nasdaq intrinsic value. Most oracles freeze price data after the US market closes at 4 PM on Friday and do not resume updates until Monday. This could lead to on-chain protocols using outdated prices for trading, creating arbitrage opportunities or causing lending protocols to be undercollateralized. This problem could worsen as more complex asset portfolios are on-chain, requiring a more robust oracle architecture to manage the gap between open protocols and closed traditional markets.