Tokenised equities could unlock new DeFi investment strategies

By Divya Shah

Why it matters: For the fintech industry, it signals continued convergence between traditional capital markets and blockchain-based financial services, opening new opportunities for yield generation, collateral management and institutional-grade digital investment products.

Key Findings 

• Tokenised equities can support equity-basis trading on-chain by serving as both the investment exposure and collateral within DeFi lending markets. 
• Historical simulations showed annualised net returns of approximately 4%-7%, with gross funding premiums estimated between 11% and 14% before costs.  
• Decentralised infrastructure introduces new operational risks, including smart-contract vulnerabilities, oracle dependencies and fragmented liquidity, making risk management critical. 

A new research paper from Bitget, Reality and Keyring outlines how tokenised equities can be combined with decentralised finance (DeFi) infrastructure to create equity-basis investment strategies. The initiative introduces a rules-based index built around Reality’s rTokens, tokenised representations of equities, alongside lending markets designed to support leveraged and yield-generating strategies. 

The research examines how traditional basis trading strategies, commonly used in derivatives markets, can be adapted for on-chain finance. In a conventional basis trade, investors seek to profit from the difference between the spot price of an asset and its corresponding futures or perpetual contract.  

The proposed model allows investors to hold Reality’s rTokens while shorting corresponding equity perpetual contracts, creating a delta-neutral position designed to capture funding-rate premiums rather than directional equity exposure. 

According to the paper, tokenised equities can simplify this process because the assets can simultaneously serve as investment exposure and as collateral within decentralised lending protocols. This eliminates the need for separate broking, financing and collateral management arrangements typically required in traditional markets. 

A key part of the framework is the integration of lending markets. Investors can use rTokens as collateral to borrow stablecoins, creating leverage through what DeFi markets commonly call “looping”. In this structure, lenders earn interest from borrowers, while borrowers gain access to additional capital backed by their tokenised equity holdings. The paper compares this mechanism to the repo financing model widely used in traditional financial markets. 

The research also highlights the role of smart contracts in automating investment strategies. Using infrastructure from IPOR Fusion, the proposed index applies predefined rules governing asset selection, portfolio allocation, risk management and execution. The methodology evaluates eligible tokenised equities and perpetual markets, ranks basis opportunities and allocates capital according to liquidity and risk parameters. 

Historical simulations covering the period from December 2025 to October 2026 suggest positive results under the model’s assumptions. The simulated index generated annualised net returns of approximately 7% during the in-sample testing period and around 4% during the out-of-sample period.  

Researchers estimate that gross funding premiums ranged between 11% and 14% before financing and transaction costs were applied. The study notes that actual results may differ because performance is dependent on market conditions, liquidity and execution quality. 

 However, the research also underscores the risks associated with decentralised equity-basis trading. Unlike centralised exchanges where cross-margining can offset gains and losses across positions, DeFi strategies often operate across multiple protocols.  

This creates exposure to smart-contract vulnerabilities, oracle risks, bridge failures, liquidity fragmentation and liquidation events. The authors argue that successful implementation requires robust collateral valuation, reliable pricing feeds and coordinated position management across venues. 

 The collaboration brings together several industry participants. Reality supplies tokenised equity infrastructure, Keyring develops index methodologies and lending frameworks, IPOR Fusion provides vault infrastructure, and 1 Token delivers portfolio management and risk-monitoring capabilities. The resulting ecosystem is intended to support institutional-style, rules-based investment products within a decentralised environment. 

 The paper ultimately reflects growing efforts to bridge traditional financial assets with blockchain-based markets. By combining tokenised equities, lending protocols and automated portfolio management, the proposed model aims to create new ways for investors to access equity-basis strategies while leveraging the transparency and programmability of DeFi infrastructure