Author: Uniswap
Compiled by: Deep Tide TechFlow
Deep Tide Introduction: Wall Street has long operated on an order book mechanism, while the U.S. Securities and Exchange Commission (SEC)'s innovation exemption order requires the deployment of automated market makers (AMMs) on public blockchains. The order officially took effect on September 17, 2026, establishing a new compliant trading category called "Tokenized Securities Venues (TSVs)" and granting qualifying venues a five-year registration exemption.
To date, cumulative trading volume of tokenized stocks on the Uniswap protocol has surpassed $20 billion. This article is based on Uniswap's official interpretation of the innovation exemption order, directly translating and explaining how AMMs reshape traditional market making and 24/7 settlement systems, and how developers can use Uniswap v4 permissioned liquidity pool hooks to build compliant tokenized securities markets.
Wall Street runs on order books, while the SEC's innovation exemption order requires automated market makers (AMMs) to run on public blockchains.
On September 17, 2026, the exemption order granted a five-year exemption to a newly defined venue category, namely "Tokenized Securities Venues (TSVs)." TSVs trade tokenized National Market System (NMS) stocks through permissioned liquidity pools.
As long as they meet the conditions set forth in the order, these venues do not need to register as securities exchanges or alternative trading systems (ATSs), and compliant liquidity providers (LPs) will not be deemed securities dealers.
To date, more than $20 billion in stock tokens have been traded on the Uniswap protocol. This volume mainly comes from products such as Robinhood Stock Tokens and xStocks, as well as issuers such as Ondo and Dinari. Stock exposure is already on-chain, and shareholder rights may be the next step.
U.S. stocks are a $79 trillion market. Automated market makers (AMMs) will change how these assets are traded, who provides liquidity, and the barriers to entry for market making. Below is our interpretation of the order and what it means for teams building on the Uniswap protocol.
AMMs Upgrade Market Infrastructure
AMMs automate most of the work of professional market makers. Anyone can provide liquidity by depositing assets directly into smart contracts. This expands the group of people who can participate in market making, increases market competition, and opens a new path for issuers to build liquidity.
Pools operate 24/7 year-round, supporting trading at night, on weekends, and on holidays. Thousands of front-end interfaces worldwide are already connected to use AMMs, which gives any newly created market immediate global distribution.
AMMs also expand the choice of trading pairs for assets. Take NVIDIA stock as an example: on traditional exchanges, it trades priced in U.S. dollars. On-chain, it can be paired with a tokenized S&P 500 fund, a money market fund, or a cryptocurrency.
Pairing highly correlated assets (such as NVIDIA and the S&P 500 index) can reduce liquidity providers' relative price risk. With automated routing systems, traders can still use any other asset to buy directly.
Today we can already see such markets beginning to take shape. In August of this year, ten tokenized stocks and ETFs began trading on Robinhood Chain quoted in SPY. Three months later, more than 40 underlying assets had established SPY liquidity pools, generating over $900 million in trading volume across 130,000 wallet addresses.
Demand for on-chain stocks is real and continues to grow. TSVs provide financial institutions with a new path to meet this demand.
How TSVs Work
TSVs provide AMM pools for approved participants on public, permissionless blockchains. Compared with traditional securities exchanges, TSVs bear lighter regulatory obligations, and liquidity providers (LPs) do not need to register as dealers.
Running on AMMs also changes how settlement works. In the current traditional system, brokers route your order, exchanges or wholesalers handle matching and execution, and finally clearinghouses and depositories handle delivery and settlement.
On a TSV, trading and settlement are completed atomically in the same on-chain transaction: either both parties' funds and assets are delivered simultaneously, or everything rolls back and neither occurs, with no central counterparty needed.
Public companies have a say in whether their stocks trade on a TSV. TSVs must give stock issuers 30 days' advance notice and an opportunity to object. Once a stock is listed, any application connected to that pool can offer trading services to approved users.
Figure: Comparison of traditional securities trading models and Tokenized Securities Venues (TSVs) across dimensions such as trading venue, liquidity provision, clearing and settlement, and trading hours
To obtain exempt status, trading venues must meet a series of compliance conditions, including public fee disclosure, access control, limits on underlying assets and trading volume, and trading halt mechanisms. So how can these rules be enforced on-chain?
Uniswap v4 supports powerful market structure customization through the Hooks mechanism, and our Permissioned Pools hook provides trading venues with a solid infrastructure foundation.
Permissioned Trading Venues on Uniswap
Since launching in 2018, the Uniswap protocol has processed more than $4.5 trillion in trading volume across more than 30 blockchains, and its core smart contracts have never suffered a security breach.
Uniswap v4 allows development teams to highly customize the operating logic of liquidity pools. Hooks are programmable code that automatically triggers at specific points (for example, before or after trade execution). Actual trade execution and asset delivery are still completed on the underlying protocol, but operators can decide who can trade, what assets can be traded, and when trading can occur.
Figure: Schematic diagram of the permission hook and liquidity pool architecture of a Tokenized Securities Venue (TSV) based on Uniswap v4
Building Together with Uniswap Labs
Bringing stock assets onchain is only the starting point; the deeper transformation lies in the evolution of market-making methods and in who is eligible to become a market maker. As this exemption order moves forward, we hope to work hand in hand with teams of all kinds to jointly explore the concrete forms these new types of markets take in practice.
TSV operators: We can walk you through in detail how to use hooks to implement access whitelist controls, trading circuit-breaker pauses, and other pool-level compliance controls.
Asset issuers: We can help you gain a deeper understanding of how tokenized stocks trade on AMMs, and where the boundaries of the Uniswap protocol's capabilities lie.
Liquidity providers (LPs): We can share research data on the actual behavioral characteristics of AMM liquidity, as well as the key changes that occur in permissioned liquidity pools.
If you are exploring how to build, issue assets, or provide liquidity under the innovation exemption framework, please feel free to contact us.
Disclaimer: Uniswap Labs does not operate, control, or participate in the day-to-day operations of any tokenized securities trading venue. Any trading venue built on the Uniswap protocol is independently operated by its operator, and the operator is solely and fully responsible for its design decisions, legal analysis, and compliance with applicable laws (including the innovation exemption order and each of its preconditions).
The innovation exemption order is temporary and conditional in nature and may change in the future. This article is for informational purposes only and does not constitute legal, financial, or investment advice, nor does it constitute an offer or solicitation to buy or sell any securities or digital assets, or to provide liquidity for them.
