Written by: David Christopher
Compiled by Saoirse, Foresight News
We regret to inform you that the grand vision for the stock-paired meme coin ultimately proved unattainable.
Some readers may not be familiar with the context—I’m referring to a widely circulated narrative in the market: that a short squeeze in on-chain stock supply could transmit effects to the traditional stock market. Unfortunately, the underlying mechanism is fundamentally incapable of achieving this.
If you weren’t paying attention to the market last weekend, you likely missed the extreme price dislocation. Liquidity pools operate on a basic in-and-out trading mechanism. When users bought meme tokens like BONER, which are tied to tokenized equities (TEQ), massive amounts of capital accumulated, effectively monopolizing the circulating supply of the paired equity tokens. With supply drastically compressed, this directly triggered a violent surge in the token’s price.
AMC's stock token once surged to $166.86, while its underlying stock closed at just $2.59 last Friday. HIMS's situation, though less extreme, was equally astonishing: its on-chain token peaked at $132.64, while its real-world stock closed at $28.84 on Friday, only returning to rational levels when traditional markets opened on Monday. The on-chain prices for both reached approximately 64 times and 4.6 times their real-world stock prices, respectively.
Over the past few days, this phenomenon of "monopolizing token supply" has ignited market imagination, with particular focus on its potential ripple effects on heavily shorted stocks. Could a group of enthusiastic Meme coin holders drive token prices to extreme levels, using locked-up tokenized筹码 to not only execute a short squeeze on-chain, but also transmit the short-squeeze effect to the real-world stock market?
Unfortunately, the answer is no.
BONER hoarded HIMS tokens on the Robinhood chain; over the weekend, the on-chain token price surged to 4.5 times the real-world stock price, attempting to create a short squeeze. The attached chart shows a significant divergence in price trends between the two.
Why short squeeze strategies don't work
The first core issue is the disparity in scale. The circulating supply of most TEQ tokens is negligible compared to the underlying real stock volume. For example, BONER holds a cumulative 53% of HIMS stock tokens—a seemingly impressive share—but this translates to only about 0.014% of HIMS’s actual total shares.
Even if the token supply grows larger, there is a more critical issue: owning tokenized shares does not equate to owning the actual underlying stocks.
Robinhood's stock tokens are 1:1 backed by actual stocks held in custodial accounts. Users gain exposure only to price appreciation, not ownership of the underlying stocks. Therefore, when BONER deposits a large amount of HIMS stock tokens into a liquidity pool, it creates scarcity of the on-chain stock tokens but does not make the real-world HIMS shares scarce.
When token scarcity drives the on-chain HIMS price significantly above the real-world stock price, Robinhood’s authorized participants can mint new stock tokens to arbitrage the price differential. Minting new tokens does require purchasing additional actual shares as underlying collateral, so the issuance creates modest buying pressure on the underlying stock. However, hoarding existing tokens does not force the purchase of an equivalent amount of HIMS common stock. The primary effect is that it incentivizes the platform to issue more stock tokens, increasing token supply and bringing the on-chain token price back in line with the real-world stock price.
Last weekend’s market movement confirmed this: while the HIMS token could surge above $100 on-chain, the real-world HIMS stock price remained around $29. After traditional markets opened, approximately 4,000 newly issued HIMS tokens entered the market, quickly eliminating the large price discrepancy between on-chain and off-chain values.
Of course, a short squeeze is not inherently impossible—it just requires a TEQ infrastructure more tightly integrated with real-world equity.
What should a more refined TEQ (tokenized stock) look like?
Ironically, the solution closest to this goal currently appears on the Solana blockchain.
Last year, Galaxy partnered with Superstate to migrate GLXY onto the blockchain. The difference is straightforward: Robinhood provides users with tokens that track stock prices; under Galaxy’s model, the tokens are the stocks themselves.
Original Galaxy shareholders can convert their GLXY tokens into the on-chain version of GLXY. These on-chain tokens represent actual Galaxy Class A common shares, with identical legal rights, economic benefits, and voting rights as traditional GLXY shares. When tokens are transferred, Galaxy’s official shareholder register will be updated accordingly.
This makes the connection between on-chain and off-chain markets much more direct: transferring GLXY on-chain is equivalent to transferring the actual equity, rather than merely creating a mirrored certificate of the stock.
However, Galaxy’s solution is not yet fully mature. Currently, its on-chain shares can only be transferred between approved wallets, and Galaxy has not yet enabled permissionless automated market maker (AMM) trading.
Explore the conditions required for on-chain short squeezes, and point out that tokenized stocks like those on Robinhood are merely price-led IOUs, not actual equity, and therefore cannot enable a true short squeeze.
Stock-paired meme coins—where is the real value?
So, is all of this merely a fresh gimmick for speculators to hype capital?
I don't think so.
The short squeeze is merely the most popular and exciting narrative initially embraced by the public. Even without achieving a short squeeze, the linkage between stocks and tokens still gives rise to an entirely new market logic.
Eric Conner proposes a mainstream view: such meme coins can serve as decentralized marketing tools for the corresponding publicly traded companies. Token holders will spontaneously track earnings reports, product updates, short positions, industry news, and all information related to the underlying stock, while generating a large volume of memes and content.
However, this model has clear limitations. Although the token name BONER may align well with Hims’ product branding, a medical publicly traded company seeking mainstream market credibility would find it difficult to publicly endorse a token named “BONER.”
Believe that each stock will eventually give rise to a corresponding meme coin community; such communities can bring promotional benefits to listed companies, and share podcast content about the surge in HIMS on-chain tokens.
However, reality includes intermediate states. Today’s leading companies understand guerrilla marketing; token communities naturally form their own dissemination channels, and companies do not need to acknowledge or control them.
The second, and more interesting, direction: transform TEQ into a brand-new foundational component for finance and gamification.
NetNet Capital has introduced the "RW-Play" concept, which centers on using tokenized stocks as programmable modules within games and DeFi products. COINflip awards tokenized Coinbase shares as prizes to winners; SpaceX Invaders distributes tokenized SpaceX shares as rewards; and MSFT Flight Simulator grants tokenized Microsoft shares as prizes.
Tokenized stocks are no longer limited to simple buy-and-hold strategies; they can also serve as trading pairs, collateral, reward prizes, sources of liquidity, and be integrated into a wide range of new applications.
In today’s market, most participants are simply replicating old DeFi strategies from 2020 using new assets. But what’s more worth considering is how the market will evolve once TEQ develops its own native foundational components.
Setting aside Robinhood’s skyrocketing on-chain K-line, the integration of stocks and tokens represents one of the most innovative breakthroughs in the on-chain space recently. At present, Robinhood’s stock tokens have established this chain as the leading platform in this sector, but this dominance will not go unchallenged.
Galaxy has demonstrated that Solana can support TEQs deeply tied to real-world equity, and the Base blockchain is likely to launch its own similar solution in the future. The core of competition in this space is not about who lists more stocks on-chain, but who builds a more valuable bridge between on-chain assets and real-world equity. Ultimately, the winner will be the one who uncovers the most compelling use cases for tokenized stocks.
It’s fascinating to witness the birth of an entirely new narrative. While there are certainly opportunities for speculation and profit, what’s more significant is that an unprecedented array of financial mechanism designs will emerge in the future.
Robinhood's co-founder stated that Robinhood Chain is positioned as a high-quality RWA (real-world asset) blockchain, while also being well-suited for meme coin speculative activities.