When your broker lends out the shares sitting in your account, they pocket most of the revenue. Securitize President Brett Redfearn thinks DeFi can change that, and he’s making the case just days before his company starts trading on the New York Stock Exchange.
Redfearn, who previously served as the SEC’s Director of Trading and Markets from 2017 to 2020, told Decrypt that tokenized assets combined with decentralized finance protocols can fundamentally rewire how stock lending works. In English: instead of brokers quietly earning yield on your holdings and giving you a sliver (or nothing), tokenization could let retail investors capture that revenue directly.
The stock lending problem nobody talks about
Robinhood captures roughly 85% of stock-lending revenue generated from customer shares. Charles Schwab takes about 50%. These aren’t hidden fees in the traditional sense, but they represent value being extracted from assets that technically belong to retail investors.
Redfearn’s argument is straightforward. Tokenized securities living on-chain can be programmatically deployed into DeFi lending markets without a broker acting as middleman. The yield goes to the person who actually owns the asset.
