Tokenized stocks earn nothing sitting in a wallet. Here are 5 ways to put Apple, Nvidia and other stock tokens to work in DeFi, from lending to hedging.
Key Facts
Tokenized stocks can earn a return on top of their share price when used in DeFi, through lending markets, liquidity pools, Pendle yield markets, and managed vaults.
Because few users borrow stock tokens, most of that yield comes from fixed incentive budgets that thin out as deposits grow: a $1,000 weekly budget pays about 52% a year on a $100,000 pool but about 1% on $5 million.
Higher-yield routes add risk: looping and hedging expose holders to liquidation and funding-rate swings, and concentrated liquidity positions stop earning when prices move outside their range.
A tokenized stock sitting in your wallet only tracks its share price. Put it to work in DeFi, and it can earn a second return. That might be 3% in USDC on Aave, double-digit rewards in Robinhood Chain pools, or extra shares from a Kraken vault.
DWF Labs says about 8% of tokenized equities' market cap now sits in DeFi, up from roughly 2% in January. The rates in this piece are Oct. 20 snapshots and will move fast.
Below, we discuss key themes in maximizing the return on your tokenized stock holdings. Treat any numbers printed as guidelines rather than guarantees.
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What Are Tokenized Stocks?
Tokenized stocks track a listed share that a custodian holds. Kraken's xStocks live mainly on Solana, Coinbase's stocks on Base, and Robinhood's Stock Tokens on Robinhood Chain.
>> New to tokenized stocks? Start with how to buy and self-custody them, why Robinhood Chain took off, and whether they're the new altcoins.
Source: RWA.xyz, Oct. 20, 2026.
Where Does the Yield Come From?
Stock tokens earn almost nothing on their own because nobody borrows them. Nearly every rate below is an incentive from a fixed budget, so being early is the main edge.
A $1,000 weekly budget pays about 52% a year on a $100,000 pool. On $5 million, it pays about 1%.
New listings pay the most, and rates fall as deposits arrive.
Five Ways To Earn With Tokenized Stocks
Lend Them on Aave for USDC
Aave's V4 Equities Hub on Base accepts seven Coinbase stocks, including AAPLc and TSLAc, as collateral.
Since Oct. 13, an Aave DAO incentive paid through Merkl, a rewards distributor, has given stock suppliers about 3% a year in USDC. It also caps the net cost of borrowing USDC at about 3% (more on why this is important later).
Source: Aavescan, Oct. 20, 2026.
It's the simplest trade on the list: deposit, keep your exposure to the stock, claim USDC. It also lets holders borrow cheap dollars without selling, which several vaults below exploit.
Loop Them, or Hedge Them
In the context of tokenized stocks, looping means borrowing a stablecoin against your stock to buy and deposit more of it.
It raises exposure and consequently magnifies your returns. Kamino's Multiply loops xStocks up to 3.7 times, and its dashboard shows the cost. A maxed-out SPYx loop showed about -19% a year before price moves.
Until the yield on tokenized stocks exceeds the borrowing costs, looping is a no-go in most cases.
Source: Kamino, Oct. 20, 2026
Hedging, however, can add real yield.
On Oct. 20, trader Ethan DeFi shared a setup: deposit $10,000 of Alphabet Inc. Tokenized Stock (GOOGLc) on Aave, borrow $4,000 USDC, and short $10,000 worth of Alphabet with it on Hyperliquid. Shorts there were being paid funding by buyers. He put the total APY at about 12% a year, on three days of data. This short only offsets part of the price risk. A fully delta-neutral version needs a short as large as the stock.
Funding can flip, and a sharp rally can liquidate the short, so you’d need alerts set up to give this route a shot.
Pool Them on Robinhood Chain
On Robinhood Chain, Uniswap v4 pools pair single Stock Tokens with SPY, the S&P 500 token. The two tend to move together, so impermanent loss is usually smaller than against a stablecoin.
On Oct. 20, Merkl listed 14 of these pools paying USDG rewards plus trading fees. Rates ran from about 5% on SPY and QQQ to 59% on SPY and HIMS. Only concentrated liquidity that is in range earns, meaning the price sits inside the band you chose.
If the stocks drift apart, you stop earning until you reset it.
Source: Merkl, Oct. 20, 2026
Split Them on Pendle
Pendle splits a token into a principal token, which locks in a fixed rate, and a yield token. Its GOOGLc and NVDAc markets on Base launched Oct. 16 with $20,000 in USDC incentives each.
With no underlying yield, the fixed rate sits below 1%, so the return is in the principal-token pool. A liquidity provider holds the stock token plus its principal token, which redeems for the stock at maturity, so most stock exposure remains.
On Oct. 20, liquidity providers earned about 27% on GOOGLc and 47% on NVDAc, mostly from incentives. New Pendle markets usually pay the most in their first weeks.
Source: Pendle, Oct. 20, 2026.
Let a Vault Do the Work
Kraken's xStocks Vaults, launched on Sept. 14, post SPYx, QQQx or NVDAx as collateral on Kamino. They lend out borrowed stablecoins and buy more stock with the returns. Kraken estimated about 2% a year after fees.
On Base, IPOR, Superform and Dialectic vaults do the same with Coinbase stocks, often via Aave, for 6% to 15% including Merkl rewards.
Aave founder Stani Kulechov summed up the stack on Oct. 5: "Coinbase brings stocks onchain with Base. Aave enables borrowing against them. Dialectic deploys that liquidity into onchain yield opportunities."
On Robinhood Chain, Hedgehood sells weekly call options on deposited NVDA tokens and pays the premium in USDG. Gains above the strike price go to the option buyer.
Which Strategy Should You Use?
For a set-it-and-forget-it approach, use Aave's Equities Hub or a Kraken vault for a few percent. If you check positions weekly, Robinhood Chain pools and new Pendle markets pay far more while budgets last.
Loops and hedges suit traders who already manage liquidation and funding risk.
Check Merkyl regularly for live campaigns by chain. Each shows the budget, end date, and any rate cap. Rewards are claimed there. Aavescan tracks the Equities Hub, and Pendle's markets page has a Stocks filter.
Merkl, Pendle, and xStocks announce new campaigns on X, so set your notifications to get in early.
Further reading: Crypto Delta Neutral Trading Strategies for 2026
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