How to Buy Tokenized Index Funds (ETFs) On-Chain with GM Markets
Learn how to buy tokenized US-listed ETFs on-chain with GM Markets. Access diversified equity exposure, benefit from fractional ownership, self-custody, and DeFi composability.
How to Buy Tokenized Index Funds (ETFs) On-Chain with GM Markets
Global interest in equity markets continues to grow, yet traditional access often presents barriers for investors outside the United States. These challenges can include complex brokerage account requirements, high minimum investments, and limited trading hours. At GM Markets, we address this friction by offering tokenized index funds, primarily US-listed Exchange Traded Funds (ETFs), directly on-chain. We do not serve users in the United States or other restricted jurisdictions.
Our platform integrates traditional finance with blockchain technology, allowing global investors to acquire tokenized US-listed ETFs with direct access. We provide a straightforward, secure, and composable method to gain exposure to these diversified assets. Benefits of trading tokenized ETFs with us include self-custody, fractional ownership from as little as $1, and integration within the broader decentralized finance (DeFi) ecosystem. To learn more about tokenized assets, visit our tokenized stocks learning page.
What Are Tokenized Index Funds (ETFs)?
Tokenized index funds are digital representations of traditional index fund shares, most commonly ETFs, that exist on a blockchain. These tokens are not speculative digital assets; each token we issue is 1:1 backed by a real share of the underlying US-listed ETF, held in a segregated custody account at a regulated broker-dealer. This ensures the token’s value directly tracks the performance of the traditional asset it represents. For a broader understanding of ETFs, Investopedia offers a comprehensive definition of Exchange-Traded Funds.
The underlying mechanism ensures that these tokens track the economic value of the traditional ETF, including price movements. For corporate actions such as dividends, we employ a total-return model. Dividends are reinvested into the underlying asset, which in turn raises the token’s on-chain Net Asset Value (NAV) rather than being paid out as a separate cash distribution. This approach allows your position to reflect the full economic benefit of the underlying asset.
Tokenized ETFs offer advantages that address many traditional market limitations. They provide fractional ownership, allowing investors to buy a portion of a share for as little as $1. This improves global accessibility, as investors can participate in markets that were previously difficult to access due to high entry barriers. Additionally, while the underlying market operates during traditional hours, our platform allows for order placement near 24/7, with orders queued on-chain and filled when liquidity appears or the market opens. As of July 5, 2026, our platform lists 8 attested tokenized assets, which include both stocks and ETFs.
Why Choose On-Chain Trading for Index Funds?
The choice to trade index funds on-chain through tokenization offers distinct advantages over traditional brokerage accounts, particularly for international users. Many traditional brokerages impose stringent Know Your Customer (KYC) requirements, geographic restrictions, and often higher minimum investment thresholds, making global access challenging. Tokenized ETFs on our platform address these common hurdles, requiring only a crypto wallet and an internet connection.
A core principle of our offering is self-custody. When you acquire tokenized ETFs through GM Markets, these assets reside in your own embedded wallet, secured by Privy's multi-party computation (MPC) technology. This means you maintain direct control over your assets, a fundamental shift from traditional brokerage models where assets are held by an intermediary. This self-custodial approach enhances security and financial autonomy.
Transparency is another significant benefit. Our platform provides real-time, on-chain verification of the underlying reserves backing each tokenized asset. Through our partnership with Accountable, a third-party proof-of-reserves provider, you can independently verify that every token issued is fully backed 1:1 by a real share. You can review our live backing ratio on the Proof of Reserves page.
Furthermore, tokenized ETFs enable DeFi composability. As standard ERC-20 assets, these tokens can be integrated into various decentralized protocols. This means your tokenized index fund exposure can be used as productive capital, such as collateral for borrowing, supplied for lending, or provided as liquidity within decentralized exchanges. This capability to leverage your assets within DeFi enhances capital efficiency. Discover more about DeFi composability on our learning hub.
Finally, we reduce entry barriers. While traditional ETFs might require substantial capital, our platform allows you to start trading tokenized ETFs with minimum trade sizes as low as $1. This fractional ownership model makes diversified US equity exposure available to a broader global audience.
How GM Markets Facilitates Tokenized ETF Trading
Our approach to tokenized ETF trading is built on a foundation of security, transparency, and efficiency. Every tokenized ETF on our platform adheres to a strict 1:1 backing model, meaning each token you hold corresponds directly to one real share of the underlying US-listed ETF. This share is held securely in a segregated customer account.
We partner with regulated broker-dealers, Interactive Brokers and Alpaca Markets, who serve as our custodian partners. They hold the underlying shares in segregated accounts, entirely separate from their own operational funds. This segregation provides a layer of investor protection, ensuring that your assets are not commingled with the broker-dealers' balance sheets. For more details on our security framework, visit our Security page.
To maintain transparency, we leverage Accountable, an independent third-party proof-of-reserves provider. Accountable continuously attests to the existence and quantity of the underlying shares held by our custodians and publishes this data on-chain in real time. This allows anyone to verify the full 1:1 backing of our tokenized assets at any moment, fostering trust and accountability. You can verify this for yourself on our Proof of Reserves page.
As previously mentioned, our platform operates on a total-return model for dividends and corporate actions. This means that instead of receiving separate cash payouts for dividends, these amounts are reinvested into the underlying asset. Consequently, the token’s on-chain NAV increases, directly reflecting the economic benefit. Similarly, corporate actions such as stock splits, spin-offs, mergers, or name changes are absorbed into the NAV, ensuring your tokenized position accurately tracks the economic performance of the underlying ETF without requiring any manual intervention from your side.
All tokenized ETFs issued on GM Markets are standard ERC-20 assets. This choice of a widely adopted blockchain standard ensures broad compatibility and interoperability across the decentralized finance landscape. You can easily transfer, store, and utilize these tokens within any compatible crypto wallet or DeFi protocol, enabling a range of composable financial opportunities.
A Step-by-Step Guide to Buying Tokenized ETFs on GM Markets
Acquiring tokenized index funds on GM Markets is designed as a direct process. We prioritize ease of access and security throughout the entire process.
Gas Abstraction and Trade Execution
A key feature of our platform is gas abstraction. You do not need to hold native chain tokens (like ETH for Ethereum or Arbitrum) to cover gas fees. Our smart account pays the native gas and bills the equivalent amount in USDF from your balance. This simplifies the trading experience, removing a common hurdle for new users in the DeFi space. After reviewing the quote, confirm your trade, and the tokenized ETFs will be settled directly into your self-custodial wallet on-chain.
Selecting and Trading Tokenized ETFs
Navigate to our trading interface. Here, you can browse our selection of tokenized US-listed ETFs, which function as index funds. Popular choices often include broad market index ETFs like SPY (tracking the S&P 500), VOO (Vanguard S&P 500 ETF), and QQQ (Invesco QQQ Trust, tracking the Nasdaq 100). Select your desired ETF, enter the amount you wish to buy (from as little as $1), and review the Request-For-Quote (RFQ) price. Our regulated market-making partners provide real-time quotes against the live underlying market, ensuring competitive pricing.
Depositing Funds (USDF)
Once connected, you can deposit funds using stablecoins such as USDC or USDT. These are unified into USDF on our platform, which serves as your stablecoin balance. We support deposits across several leading blockchain networks, including Base, Arbitrum, Ethereum, and Optimism. Our system manages the complexities of different stablecoins across chains, providing a unified balance for your trading activities. Find more details on USDF in our FAQ.
Onboarding to GM Markets
You can connect to our platform using an existing external wallet or, for added convenience, create an embedded wallet through a Google account or email magic-link. Our embedded wallets are secured by Privy's multi-party computation (MPC) technology, which means no single party, including GM Markets, holds the full private key. This provides a security framework for your digital assets. Get started by visiting the GM Markets homepage.
Beyond Buying: Leveraging Tokenized ETFs in DeFi
The utility of tokenized ETFs extends beyond simple acquisition. As standard ERC-20 assets, these tokens are composable within the decentralized finance ecosystem, allowing you to gain additional utility and potential yield from your holdings. The market for tokenized assets is expanding; industry reports from Mordor Intelligence and Grand View Research project significant growth, with estimates valuing the market at trillions of USD in the coming years. Mordor Intelligence, for example, projected the market to grow from USD 2.08 trillion in 2025 to USD 18.74 trillion by 2031. Similarly, Grand View Research estimated a rise from USD 1.8 trillion in 2025 to USD 24.5 trillion by 2033.
Collateral for Margin Trading
For more advanced strategies, tokenized ETFs can be used as collateral in various perps protocols for margin trading. This allows you to gain leveraged exposure to other assets while maintaining your diversified index fund position.
Liquidity Provision
Tokenized ETFs can be supplied as liquidity to decentralized exchanges (DEXs) like Uniswap, Curve, and CoW Swap. By contributing to liquidity pools, you facilitate trading for others and can earn trading fees, generating additional income on your held assets.
Lending and Borrowing
You can lend your tokenized ETFs on established decentralized lending protocols such as Aave and Morpho. By supplying your assets, you can earn yield from borrowers. Conversely, you can use your tokenized ETFs as collateral to borrow other crypto assets or stablecoins, providing capital without needing to sell your underlying investment.
These practical use cases demonstrate how tokenized index funds can be used actively within the DeFi landscape. You maintain exposure to traditional equity markets while simultaneously participating in the opportunities offered by decentralized finance, potentially generating additional yield on your held assets through these composable applications.
Fees, Security, and Important Considerations
At GM Markets, we are committed to transparent pricing and robust security measures. Our transparent pricing model centers on a single trading fee, ranging from 10 to 20 basis points (0.10% to 0.20%). The default fee is 20 bps, which scales down to 10 bps at our highest VIP tier as your 14-day trading volume increases. This fee is always included in the quoted price, ensuring the "You will receive" amount is final. We charge no fees for deposits, withdrawals, custody, inactivity, or FX markups. Gas fees are also abstracted, meaning you never directly pay for network gas in native tokens. For full details on our fee structure, please visit our Pricing page.
Your assets are held in self-custodial, embedded wallets secured by Privy's multi-party computation (MPC) technology. This ensures that no single party, including GM Markets, ever possesses your complete private key, enhancing the security of your digital holdings. Our smart contracts have undergone rigorous audits by leading firms such as Sherlock, Halborn, Cantina, and Cyfrin, with re-audits conducted on all material upgrades. We are also actively pursuing SOC 2 Type II certification, further demonstrating our commitment to security controls. The underlying shares backing your tokenized ETFs are held in segregated customer accounts at regulated broker-dealers, Interactive Brokers and Alpaca Markets, providing an additional layer of protection.
It is crucial to understand that tokenized ETFs on our platform provide economic exposure to the underlying asset's performance, including price appreciation and dividends (via NAV increase). However, they do not confer direct ownership or shareholder voting rights, which typically come with holding physical shares. GM Markets is currently in public beta. While core functionalities are robust and fully backed, some features and user interfaces are still evolving. We encourage users to trade with funds they are comfortable testing. In the unlikely event that GM Markets discontinues operations, a designated security agent is authorized to work directly with our custodians to redeem outstanding tokens against the underlying shares. This redemption path is enforced by our on-chain contracts and operates independently of GM Markets' ongoing status, ensuring asset continuity for token holders.
Please remember that trading tokenized assets involves inherent risks. Market prices can be volatile, and you may lose capital. Specifically, tokenized stocks carry unique considerations, including:
- Market Risk: Tokenized assets are subject to market price fluctuations. Increased liquidity in tokenized markets, while beneficial, can also contribute to sudden value drops, especially during rapid shifts in investor sentiment. Discrepancies between a token's price and its underlying asset can arise due to various factors.
- Settlement Risk: While atomic, near-instant settlement reduces counterparty exposure, its irreversible nature means errors are difficult to undo. Without clear frameworks, fragmentation can occur.
- Counterparty Risk: Reliance on third-party service providers (custodians, oracles, protocol developers) introduces risk. If a custodian faces bankruptcy, direct holders of the underlying security might be unaffected, but token holders could face complexities.
- Smart-Contract Risk: The functionality of tokenized assets relies on smart contracts, which are susceptible to vulnerabilities, bugs, or exploits if not rigorously programmed and audited. Rectifying flaws after deployment can be complex, and improper upgrades could corrupt data.
- Custody Risk: For self-custodial assets, the loss or theft of private keys can render assets inaccessible. While our MPC wallets enhance security, users must still safeguard their recovery methods. Secure management of underlying physical assets by custodians is also critical.
We do not provide financial, investment, tax, or legal advice. For a comprehensive understanding of these risks and our legal framework, please review our Legal page. As a reminder, GM Markets is not offered to users in the United States or other restricted jurisdictions.
Frequently Asked Questions
What is the minimum investment for tokenized ETFs on GM Markets?
You can start trading tokenized ETFs on GM Markets with a minimum investment of just $1. Our platform supports fractional ownership, making diversified US equity exposure accessible to a broader global audience.
How are dividends handled for tokenized ETFs?
We operate on a total-return model. Dividends are reinvested into the underlying asset, which increases the token's on-chain Net Asset Value (NAV). You will see the economic benefit of dividends reflected in the token's price rather than as a separate cash payout.
How are my assets protected on the GM Markets platform?
Your assets are held in self-custodial, embedded wallets secured by Privy's multi-party computation (MPC) technology. The underlying shares are held in segregated customer accounts at regulated broker-dealers, Interactive Brokers and Alpaca Markets, separate from their own funds. Our reserves are also independently attested on-chain in real time by Accountable.
What are the total fees when trading tokenized ETFs?
Our fee structure is transparent, with a single trading fee ranging from 10 to 20 basis points (0.10% to 0.20%), included in the quoted price. There are no fees for deposits, withdrawals, custody, inactivity, or FX markups, and gas fees are abstracted.
Can I trade tokenized ETFs 24/7 on GM Markets?
While the underlying traditional markets operate during specific hours, our platform allows for order placement near 24/7. Out-of-hours orders are queued on-chain and filled when liquidity appears or the market opens, providing flexibility for global investors.
Begin Trading Tokenized ETFs on GM Markets
Tokenized index funds, particularly US-listed ETFs, offer a direct and accessible way to gain diversified equity exposure on-chain. GM Markets provides a secure, transparent, and composable platform that streamlines access to these assets, enabling global investors with self-custody, fractional ownership, and integration into the DeFi ecosystem. We prioritize your financial autonomy and provide tools to leverage your investments in various ways.
Explore the opportunities that tokenized ETFs present and take control of your investment journey. We invite you to browse our selection of tokenized assets and begin trading today. Please remember that trading tokenized assets involves risks, and we do not provide financial advice. GM Markets is not offered to users in the United States or other restricted jurisdictions. Visit our platform to get started.
