How to Buy Tokenized Stocks on Base with Crypto
Learn how to buy tokenized US stocks and ETFs on the Base network with crypto using GM Markets. Our platform offers gas abstraction, self-custody, and 1:1 backing, providing a secure and efficient way to access global equities.
How to Buy Tokenized Stocks on Base with Crypto
For crypto holders seeking to diversify into traditional finance, accessing US-listed stocks and exchange-traded funds (ETFs) can be challenging. GM Markets provides a solution, enabling you to buy tokenized US stocks and ETFs directly on the Base network using your crypto assets. Our platform simplifies this process by abstracting gas fees and offers a secure, permissionless, and self-custodial trading environment through stablecoin deposits. GM Markets is currently in public beta, with core functionalities fully operational and backed by 1:1 custody.
We offer global crypto holders a straightforward path to US equities, enhanced composability within the decentralized finance (DeFi) ecosystem, and the inherent efficiency of the Base network. To understand more about tokenized stocks, visit our Learn section on Tokenized Stocks. Please note, we do not serve users in the United States or other restricted jurisdictions.
Understanding Tokenized Stocks and the Base Network
Before exploring the trading process, it is important to understand the core components: tokenized stocks and the Base network.
What Are Tokenized Stocks?
Tokenized stocks are digital representations of real-world shares. On GM Markets, every token is backed 1:1 by an actual share held in a segregated customer account at a regulated broker-dealer, such as Interactive Brokers or Alpaca Markets. This model provides you with the economic exposure of the underlying stock, including price movements and dividends (which are reinvested into the token's value), without requiring direct ownership of the physical share or navigating traditional brokerage complexities. These tokens are standard ERC-20 assets, making them compatible with various blockchain applications.
Introducing the Base Network
Base is an Ethereum Layer 2 (L2) network, incubated by Coinbase, designed to provide a secure, low-cost, and developer-friendly environment for building on-chain applications. It is built on the open-source OP Stack, developed in collaboration with Optimism. As an L2, Base processes transactions off the main Ethereum blockchain, bundling them and submitting them back to Ethereum for finality. This architecture significantly reduces fees and improves throughput compared to transacting directly on Ethereum Mainnet. You can learn more about Base on its official website and about Ethereum Layer 2 solutions on ethereum.org.
Transaction costs for stablecoin transfers on Layer 2 networks like Base are substantially lower than on the Ethereum Mainnet. This efficiency has been further enhanced by the Ethereum Dencun upgrade, which went live on March 13, 2024. A core component of this upgrade was EIP-4844, introducing "blobs" for more efficient storage of transaction data. This innovation segregates L2 transactions from standard Ethereum mainnet activity, leading to substantial reductions in congestion and transaction fees. Following Dencun, median gas fees on Base plummeted significantly, making it one of the most cost-effective L2 networks. Further details on the Dencun upgrade are available on ethereum.org. This makes Base a highly suitable and efficient network for trading tokenized assets, particularly for crypto-native users prioritizing cost-effectiveness and speed.
Why Trade Tokenized Stocks on Base with GM Markets
GM Markets is designed to provide a superior trading experience for tokenized stocks on Base, offering several distinct advantages:
- Permissionless Access: Our platform offers a straightforward onboarding process. You can connect using an external wallet or sign up conveniently via your Google account or an email magic-link. This permissionless approach means you can start trading without lengthy verification procedures.
- Self-Custody: We prioritize your control over assets. GM Markets uses embedded wallets powered by Privy's multi-party computation (MPC) technology. This ensures that you maintain self-custody of your tokenized stocks, meaning no single party, including GM Markets, holds the complete private key for your wallet. Learn more about our security measures on our Security page.
- Gas Abstraction: One of the most significant benefits for users on GM Markets is gas abstraction. When you trade on our platform, the smart account pays the native network gas fees, and we bill the equivalent in USDF from your balance. This eliminates the need for you to hold native chain tokens like ETH on Base, simplifying the trading experience and removing a common point of friction for cross-chain users.
- Fractional Ownership: Our platform enables you to trade tokenized stocks from as little as $1. This fractional ownership capability allows for greater portfolio diversification, making high-value stocks accessible to a broader range of investors.
- 1:1 Backing and Transparency: Every tokenized stock on GM Markets is backed 1:1 by a real share held in segregated customer accounts at regulated broker-dealers. Our reserves are independently attested in real time on-chain by Accountable, a third-party proof-of-reserves provider. You can verify this transparency directly on our Proof of Reserves page.
- Composability: As ERC-20 tokens, the assets you acquire on GM Markets are fully composable within the broader DeFi ecosystem. This means you can use your tokenized stock positions for lending and borrowing on platforms like Aave and Morpho, provide liquidity on decentralized exchanges such as Uniswap and Curve, or use them as collateral across various perps protocols.
Your Step-by-Step Guide to Buying Tokenized Stocks on Base
Here is how you can begin trading tokenized US stocks and ETFs on the Base network with GM Markets:
- Step 1: Connect to GM Markets: Visit the GM Markets platform. You can connect your existing Web3 wallet or sign up using your Google account or email address. The process is designed to be quick and secure.
- Step 2: Fund Your Account with Crypto: To fund your account, deposit stablecoins such as USDC or USDT. These stablecoins are unified into USDF on our platform, providing a consistent balance across supported chains. Base is one of our supported deposit chains, allowing you to leverage its low fees for transfers. While deposit times can vary based on network congestion, funds are typically reflected efficiently.
- Step 3: Choose Your Tokenized Stock or ETF: Once your account is funded, navigate to our trading interface. Here, you can browse a selection of US-listed tokenized stocks and ETFs. While our underlying tokenization rails, operated by Flo Finance, support a vast universe of over 8,000 stocks across more than 40 exchanges via their SDK, GM Markets' interface allows you to discover our curated selection of tokenized US stocks and ETFs.
- Step 4: Place Your Trade: Select the tokenized asset you wish to buy. We use a Request-For-Quote (RFQ) execution model, where regulated market-making partners provide real-time quotes against the live underlying market. You can configure your slippage tolerance, with a default of 0.5%. The final 'You will receive' price displayed includes the transparent trading fee, so there are no hidden costs.
- Step 5: Confirm and Manage Your Holdings: After placing your trade, your tokenized stock position will appear in your portfolio. You can track its performance and manage your assets. Our total-return model means that dividends are reinvested into the underlying assets, which in turn raises the token's on-chain Net Asset Value (NAV) rather than paying out separately. This ensures your economic exposure accurately reflects all corporate actions.
Fees, Security, and Risk Considerations
Transparency and security are paramount on GM Markets, alongside an honest acknowledgment of market risks.
Transparent Pricing
Our fee structure is straightforward: a single trading fee ranging from 10 to 20 basis points (0.10% to 0.20%). The default fee is 0.20%, which decreases to 0.10% for our highest VIP tier as your 14-day trading volume grows. For example, volumes less than $1,000 incur a 0.20% fee, while volumes of $1,000,000 or more qualify for a 0.10% fee. We charge no hidden costs for deposits, withdrawals, custody, inactivity, or FX markups. For a detailed breakdown of our VIP tiers and their associated benefits, please visit our Pricing page.
Robust Security and Continuity
GM Markets employs multiple layers of security to protect your assets and data. Our smart contracts have undergone rigorous audits by reputable firms including Sherlock, Halborn, Cantina, and Cyfrin. We are also in the process of obtaining SOC 2 Type II certification. Crucially, your underlying shares are held in segregated customer accounts at regulated broker-dealers, ensuring they are separate from GM Markets' operational funds. This structure provides a robust layer of protection for your investments.
In the event GM Markets discontinues operations, a designated security agent, GenTwo, is authorized to act on behalf of token holders. This agent works directly with the custodian to redeem outstanding tokens against the underlying shares, returning their value to token holders. The redemption process is enforced by the on-chain contract, ensuring its effectiveness regardless of GM Markets' operational status. All tokenized assets on GM Markets are backed 1:1 by corresponding shares held in segregated customer accounts at regulated broker-dealers, such as Interactive Brokers and Alpaca Markets. These underlying shares remain accessible to token holders through these segregated accounts at all times.
Risk Note
Trading in financial markets carries inherent risks. The value of tokenized stocks can fluctuate significantly, and markets can move against you, potentially leading to a loss of your invested capital. Tokenized stocks, while offering many advantages, also involve specific risks including settlement risk, counterparty risk, smart-contract risk, and custody risk. GM Markets provides information and a platform for trading; we do not offer financial, investment, tax, or legal advice. We strongly recommend that you conduct your own research and consult with a qualified financial advisor before making any investment decisions. For a comprehensive understanding of these risks, please review our Legal page.
Frequently Asked Questions
What is the minimum amount required to trade tokenized stocks on Base with GM Markets?
You can start trading tokenized US stocks and ETFs on GM Markets with as little as $1. This fractional ownership allows for greater flexibility and diversification in your portfolio.
Do I need to hold ETH on Base in my wallet to pay for gas when trading on GM Markets?
No, you do not. GM Markets abstracts gas fees. Our smart account handles the native gas payments on Base, and the equivalent cost is billed in USDF from your balance. You do not need to hold ETH or any native chain token in your wallet to trade.
How are dividends and other corporate actions handled for tokenized stocks on GM Markets?
GM Markets operates on a total-return model. Dividends are reinvested into the underlying shares, causing the token's on-chain Net Asset Value (NAV) to rise accordingly. You will not receive separate cash payouts. Similarly, other corporate actions like stock splits or mergers are absorbed into the token's NAV, ensuring your economic exposure precisely tracks the underlying asset.
Can I withdraw my tokenized stocks to an external wallet on the Base network?
Yes, your tokenized stocks are standard ERC-20 assets. You can withdraw them to any compatible external wallet on the Base network, giving you full control and composability within the broader DeFi ecosystem.
Is GM Markets available to users in the United States?
No, GM Markets is not offered to users in the United States or other restricted jurisdictions. Our services are designed for a global audience outside of these regions.
Begin Trading Tokenized Equities on Base
GM Markets provides a robust and accessible solution for buying tokenized US stocks and ETFs on the Base network using your crypto assets. By combining the efficiency of Base with our platform's gas abstraction, self-custody features, and transparent 1:1 backing, we offer a secure and straightforward path to global equity markets. We enable you to diversify your portfolio, leverage DeFi composability, and trade with confidence.
We invite you to explore the available markets on GM Markets today and begin your journey into tokenized equities. Visit our Markets page to discover the assets you can trade. Remember that all trading involves risk, and we do not provide financial advice. Our services are not available to users in the United States or other restricted jurisdictions.
