Backed Finance, Chainlink Launch xBridge for Cross-Chain Tokenized Stocks

• Chainlink CCIP powers xBridge to move tokenized stocks between Ethereum and Solana
• xBridge keeps dividends and stock splits accurate during cross-chain transfers
• Backed Finance plans to expand xBridge beyond Ethereum and Solana to new chains

Backed Finance has recently released a new cross-chain bridge, xBridge, which was developed using Chainlink technology. The tool enables tokenized stocks to be transferred between Ethereum and Solana. This was announced at the Solana Breakpoint conference. The bridge is in pilot mode. It is set to maintain corporate activities like dividends and stock splits during transfers.

xBridge is built using the Chainlink Cross-Chain Interoperability Protocol or CCIP. The protocol allows inter-blockchain communication and transfer of assets. Using CCIP, tokensized stocks known as xStocks retain their connection to real world stocks or exchange traded funds. This design provides that tokens are consistent even when they are transferred between chains.

Cross-Chain Liquidity for Fully Backed xStocks

Backed Finance reported that the bridge addresses a long-term liquidity issue. In the past, the tokenized stocks issued on Ethereum were unable to be transferred to Solana. The market depth and trading were restricted by this separation. Using xBridge, tokenized equities may now be moved between networks. The liquidity may shift to where the trade is quicker or cheaper.

All xStocks are supported on a one-to-one basis by an underlying stock or ETF. The structure lends itself to perfect price tracking and ownership representation. Shareholders who hold the tokens still enjoy dividends where applicable. The bridge infrastructure is automatic in terms of corporate actions.

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Various technical variations assist update balances on every blockchain. On Ethereum, xStock balances are fine-tuned to a multiplier system that can be updated. In Solana, the Token2022 standard uses automatic rebasing. Both methods make balances accurate following events like the stock splits even in cross chain assets.

Chainlink Strengthens xBridge Infrastructure

Yotam Katznelson, the Chief Technology Officer and Chief Operating Officer of Backed Finance, noted that the launch marks an important part of the strategy of the company. According to him, xStocks provides tokenized equities for decentralized finance without permission barriers. The xBridge enables the movement of those assets, like native crypto tokens, across ecosystems.

The bridge has already been built with key exchanges of cryptocurrencies, such as Kraken. Kraken has recently purchased Backed Finance, which opens up more access to tokenized equities. In the following weeks, Backed Finance will also support other blockchains, such as Mantle and TRON.

With Chainlink infrastructure and asset backing, xBridge will minimize risks in tokenized stock trading. The system automatizes detailed company transactions and cross-chain transfers. This strategy attracts both retail and institutional consumers who want to have a secure entry to on-chain equity markets.

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