Wall Street stocks are heading directly into decentralized finance after Formation Securities LLC formally notified the U.S. Securities and Exchange Commission (SEC) on November 9, 2026, of its plan to operate the first tokenized securities venue on the Solana blockchain.
By David Chen | November 9, 2026
The Strategy Outline
For years, regular investors have faced a strict divide between traditional stock markets and decentralized finance. Traditional brokerages shut down every afternoon at 4:00 PM, take two business days to clear transactions, and require multiple intermediaries that each extract fees. Meanwhile, crypto markets operate around the clock with instant settlement, yet they have largely been cut off from real-world corporate shares. The filing submitted by Formation Securities LLC on November 9, 2026, represents an ambitious attempt to break down that wall under direct regulatory oversight.
Formation was created through the October 2026 merger of two prominent Solana ecosystem platforms: the decentralized exchange Orca and the lending market Loopscale. Instead of launching unauthorized shadow tokens or offshore synthetic trackers—strategies that historically triggered immediate lawsuits from corporate executives—Formation secured direct, upfront consent from public company issuers. The initiative will initially bring tokenized common shares of three publicly traded firms to on-chain liquidity pools:
- Exodus Movement, Inc. (EXOD) — public crypto wallet provider listed on the New York Stock Exchange
- Forward Industries, Inc. (FWDI) — NASDAQ-listed design and manufacturing company
- Galaxy Digital Inc. (GLXY) — prominent digital asset financial services firm listed on NASDAQ
The regulatory foundation behind this launch relies on the SEC’s Innovation Exemption, a conditional policy framework published on September 17, 2026. This framework provides temporary relief for qualifying secondary trading venues to host tokenized public equities using automated liquidity pools without being forced into a legacy national securities exchange license. By law, Formation must observe a 30-day public notice window before going live, putting the platform on track for a targeted commercial launch in early 2027.
Smart Contract Architecture
To understand how this venue functions, consider how everyday decentralized exchanges operate compared to a Wall Street trading desk. Traditional equity exchanges depend on matching bid and ask orders across a centralized order book operated by commercial market-making firms. If market makers leave during high volatility or outside standard business hours, trading freezes entirely. In contrast, Formation licenses proven Automated Market Maker (AMM) technology directly from Orca, creating shared liquidity pools where trades execute continuously against smart contracts—acting like automated digital vending machines.
Under this design, verified retail users can swap regulated stablecoins for tokenized shares at any hour of the day. Because the underlying transactions occur on the high-speed Solana network, trades achieve what developers call atomic settlement. In plain English, atomic settlement means your payment and the transfer of your stock tokens happen at the exact same second in a single transaction, removing the traditional multi-day clearing delay where counterparty risk usually hides. I checked the regulatory notice against Formation’s formal filing: the dates and company disclosures match.
Crucially for long-term equity savers, these digital tokens are not mere price trackers. Each tokenized asset provides 100 percent identical voting rights and dividend distributions as standard shares registered with traditional transfer agents. To protect user assets, Formation operates as a strictly non-custodial venue: it never holds user private keys, runs an internal order book, or manages centralized deposits. Physical share custody and reserve backing are managed by institutional trust entities including Anchorage Digital Bank, BitGo, and Fireblocks, while token issuance rails are maintained through specialized tokenization partners Securitize and Superstate. Retail investors will access the venue using standard self-custody wallets like Solflare and Squads, as well as institutional brokers like Alpaca and CoinList.
Risk vs. Reward
Bridging traditional corporate equities into decentralized money markets introduces powerful advantages alongside distinct structural risks that every everyday investor must weigh carefully:
- 24/7 Global Liquidity — allows investors to manage positions and hedge stock market risks instantly during weekends or corporate earnings releases outside exchange hours
- Direct Passive Yield — corporate dividends flow directly into your connected crypto wallet in stablecoins, bypassing brokerage sweep delays
- Regulatory Sunset Risk — the SEC’s Innovation Exemption is strictly conditional and temporary, meaning regulatory policy reversals could restrict secondary trading pools
- Pool Slippage and Imbalance — automated liquidity pools can suffer sudden price slippage during sudden sell-offs if stablecoin liquidity reserves become depleted
The broader market environment also demands caution. At present, the crypto market is working through a period of elevated risk aversion, with the Crypto Fear & Greed Index resting at a cautious 29. Meanwhile, Solana itself is trading at 87.43 USD, reflecting a broader pullback across digital asset networks. In a cooling altcoin climate, introducing equity pools offers everyday investors a way to park capital in established corporate securities while keeping their assets fully deployed on-chain.
Step-by-Step Execution
For retail investors interested in participating once the venue opens in early 2027, preparing your wallet and understanding the execution workflow is straightforward:
Step 1: Set up a compliant self-custody wallet. Because the venue operates under an SEC exemption, users will connect using supported Solana wallets like Solflare or multisig solutions like Squads. Before trading, users must complete a streamlined identity verification process through integrated onboarding partners like CoinList or Alpaca to ensure compliance with federal investor standards.
Step 2: Fund your account with audited stablecoins. Trading pairs in the AMM pools will be denominated against recognized dollar-backed stablecoins. Depositing funds in your wallet gives you direct buying power without having to wait for traditional wire transfers or bank clearing delays.
Step 3: Execute instant atomic swaps. Through user interfaces such as Jito’s JTX portal or direct wallet integrations, investors can execute instant swaps between stablecoins and shares of Exodus Movement (EXOD), Forward Industries (FWDI), or Galaxy Digital (GLXY). The smart contract swaps the tokens automatically with zero broker intervention.
Step 4: Collect automated corporate distributions. Once tokenized shares reside in your address, any dividend announced by the underlying public company is forwarded automatically into your wallet in stablecoins, letting you earn corporate cash flow without selling your underlying assets.
Final Thoughts
The formal submission by Formation Securities LLC signals that decentralized finance is moving past its wild-west era of speculative yield farming into legitimate capital market infrastructure. By combining the automated speed of Solana with the legal clarity of the SEC Innovation Exemption, everyday investors are getting an early glimpse of how public markets may function over the next decade. While regulatory timelines and pool depth will determine long-term success, the barrier between traditional finance and on-chain portfolios has taken another decisive step toward disappearing.
David Chen’s take
My view is that moving real shares into automated liquidity pools changes market making from an institutional privilege to an open DeFi yield strategy, but issuer consent cannot erase the regulatory fragility of a temporary exemption. I plan to track whether early 2027 secondary trading volume matches traditional exchange spreads once the 30-day notice window closes, while any sudden SEC revocation of exemptive relief would immediately convince me this hybrid model is dead on arrival.
The cryptocurrency market remains highly volatile. This article is for informational purposes only and does not constitute financial advice.
tokenized GLXY trading around the clock in solana pools while NYSE folks wait on T+2 settlement. the gap between both worlds is getting silly
Remember the Innovation Exemption is conditional relief, not a full license. Early 2027 target could slip the moment the SEC gets cold feet.
they got direct consent from issuers like EXOD upfront instead of waiting for the lawsuits. thats the only reason this filing reads different from earlier tokenized share attempts
w take on the consent thing. EXOD in the first batch makes sense tho, they been on chain for a while already