TLDR

The tokenized equity market has surged to nearly $1 billion in value amid institutional adoption. The next major unlock is scaled borrowing against tokenized stocks, providing retail holders access to vast liquidity without selling assets. Sentora, through partnerships with Ondo, Euler, and Chainlink, has released Sentora Tokenized Equity Yield (STEY) as our core solution to enable this massive unlock. Through STEY, we address risk management, liquidation challenges and automation, paving the way for tax-efficient share conversions and yield-generating vaults for stocks like TSLA, fundamentally reshaping asset allocation.

The Next Big Unlock: Scaled Borrowing Against Tokenized Stocks

Tokenized equities have evolved from experiments into a robust, institutional-grade asset class. The market value has exploded to approximately $963 million as of January, a staggering 2,878% year-over-year growth. This surge is fueled by platforms like Ondo Finance's Global Markets, xStocks and Securitize. 

The true game-changer arriving now is the ability to borrow against tokenized equities at scale, accessing large pools of liquidity without relinquishing ownership. Imagine holding $100,000 in tokenized NVDA or TSLA shares: At a conservative 50% loan-to-value (LTV) ratio, you could borrow up to $50,000 in stablecoins to deploy elsewhere, whether for DeFi yields, personal expenses, or further investments, all while retaining upside exposure to the stock.

This unlocks unprecedented capital efficiency for retail holders, mirroring prime brokerage services traditionally reserved for high-net-worth clients. With tokenized equities now listed as collateral on protocols like Euler, borrowing becomes more abstract and user-friendly. 

Sentora's Conviction and Role in Ushering the Next Stage

Sentora is deeply convinced that this borrowing unlock will propel tokenized equities forward, and through strategic partnerships with Ondo, Euler, and Chainlink, we're leading the charge. As vault curator, Sentora abstracts the complexities to make borrowing intuitive.

Starting today, February 11, 2026, users can borrow against tokenized stocks at scale through STEY, available right now on Euler. This new market allows users to deposit tokenized stock and borrow PYUSD, Paypal’s USD stablecoin. 

This builds on our prior work in RWA liquidity (e.g., assisting RLUSD and Superstate growth on AAVE Horizon), creating a robust ecosystem where equities serve as high-quality DeFi collateral. 

Why Now: Overcoming the Liquidation Hurdle

The biggest obstacle in launching these borrow markets was the lack of sufficient on-chain liquidity for tokenized stocks during liquidations. While traditional markets boast abundant depth, on-chain venues remain fragmented and thin, posing risks to scaling. Over time, on-chain trading will mature, but we chose not to wait for the market to catch up.

The solution? Partnering with liquidators who bridge DeFi and TradFi, executing sales on high-liquidity exchanges like NYSE or Nasdaq when needed. This hybrid mechanism, unwrapping tokens and liquidating off-chain, ensures stability without relying solely on nascent on-chain pools. With these partners now live and execution paths thoroughly tested, this mechanism is production-ready and built to scale.

Self-custody of equities was a monumental first step for retail owners; enabling borrowing against them is an even larger leap, democratizing access to liquidity that rivals institutional tools.

Future Enhancements: Tax Efficiency and Yield Vaults

Looking ahead, the ecosystem's robustness will enable the deployment of transformative features. Chief among them: Converting fully owned, appreciated shares into tokenized versions without triggering capital gains taxes. Once tokenized, these can immediately serve as collateral for borrowing dollars, exponentially amplifying demand and potentially elevating DeFi borrow rates market-wide.

Once the borrow markets stabilize, Sentora will launch specialized vaults for earning yield on tokenized stocks, building on our expertise in automated DeFi yield strategies with advanced risk management. 

Picture owning a hyper-growth asset like TSLA, deploying it into a Sentora vault, and earning an additional 3-5% APY through optimized lending or structured strategies. This effectively turns growth stocks into dividend-payers, blending capital appreciation with income generation. Such products will revolutionize asset allocation, allowing portfolios to capture both upside and steady yields without compromise.

That's why Sentora is committed to every step in this journey toward a tokenized future.

Conclusion: A Trillion-Dollar Horizon

Tokenized equities are no longer a fringe idea; they're a multi-billion-dollar reality unlocking trillions in potential. With scaled borrowing now live and future innovations on the cusp, retail investors gain tools once exclusive to elites. Sentora's partnerships and solutions address key barriers, setting the stage for exponential growth. As DeFi and TradFi converge, this next stage promises not just efficiency, but a fundamental reimagining of how we hold, borrow, and earn from equities.