In traditional finance, $TSLA pays no dividend — meaning holders earn nothing unless the price goes up. Sophisticated investors seeking a yield on the stock may engage in derivative strategies, such as selling covered calls, to enhance their returns, however this requires understanding of both the complex methods and risks involved. It’s not for everyone.

Bringing a tokenized version of $TSLA on chain dramatically changes the picture. Multiple new strategies open up to ordinary investors by using DeFi protocols, including lending through onchain money markets (acting like your own bank), pooling liquidity (acting as your own market maker) or even more sophisticated strategies such as leveraged looping.

We will explore liquidity pools as the most accessible strategy available for tokenized stocks issued by xStocks, an organisational alliance bringing real world assets on chain led by Kraken and Backed.fi, in this piece.

Here are the top pools by liquidity for $TSLA on Solana (tokenized by xStocks as $TSLAx).

NOTE: * Orca APRs are based on 365 days of fees, while Raydium APRs are calculated from the past 30 days of fees. PancakeSwap and Meteora APRs are based on fees generated in the last 24 hours at the time of writing.

Liquidity pools have a preset fee (typically fractions of a percent for highly liquid correlated pairs up to 1% for exotic, uncorrelated pairs) which a user conducting a swap transaction will automatically pay as their exchange one asset for another.

The fee is collected by the smart contract itself and shared between the users that have contributed liquidity to the pool (ie placed their assets into the smart contract to allow others to trade the asset onchain), and the protocol. This incentivises asset owners to deposit their assets in the platform to create utility and the developers of the protocol to maintain and improve the application, respectively.

The amount of fees a user receives is in proportion to the liquidity supplied to the pool compared to the total liquidity available. A user supplying half of all the assets in the pool will be entitled to half of the fees generated.

The more trading activity through the pool will increase the amount of fees generated for the liquidity suppliers. Typically, this is driven by a number of factors including price volatility in the asset, general market activity across crypto (ie the cycle) and overall demand for the assets in the pool.

The typical pair token for a given assets is either a stablecoin or the native gas token of the network as an often highly liquid alternative (e.g. $SOL vs. $TSLA).

New to Solana? Here’s the simplest route:

1. Set up a Phantom wallet — the most user-friendly wallet for Solana.

2. Buy stablecoins (like USDC) via an exchange or on-ramp.

3. Swap half of your USDC into $TSLAx — available on major Solana DEXs, or via Kraken in certain jurisdictions.

4. Deposit both assets into one of Raydium’s TSLA pools by selecting the price range and the amounts that you would like to deploy; start earning fees + rewards.

5. Monitor and compound — fees do not compound automatically, so redeem your fees and deposit them back into the pool to further enhance your returns.

For most investors, liquidity pools offer an easier route to generate returns on idle exposure, however there are a number of risks (many of which do not exist outside of crypto) that they must be mindful of before depositing their assets:

• Impermanent Loss (IL): If TSLA moves significantly vs its paired asset (e.g., USDC), your position may rebalance into less TSLA. This may not be a problem at any given moment but if the position continues to move outside of the range you have set, investors lose out on capturing the upside movement in price. The effects are also amplified to the downside as the position will accumulate more TSLA as the price declines against the paired asset. Typically, this can be mitigated by regular rebalancing of the position to recentre the range on the price.

• Smart Contract Risk: Stick to established, audited protocols to mitigate the risk of potential smart contract exploits or errors.

• Market Risk: Tokenized TSLA will generally mirror real TSLA volatility so, if the stock declines, so does your LP value. Also note that the liquidity pool price of TSLA stock could suffer temporary dislocations given it is driven by the supply/demand dynamics of the pool rather than being directly linked to traditional financing markets. Arbitrage activity may only catch up at a lag.

• Liquidity Risk: If the pool is small, large deposits/withdrawals can trigger slippage whereby the price of execution of a swap may deviate.

From our experience, as a general rule of thumb, higher yields have typically reflected a higher risk. Choose pools that match your risk tolerance.

Demether provides frictionless access to yield opportunities on real world assets. We are backed by Web3 native investors and founded by a team hailing from JPMorgan, Goldman Sachs, Bank of America-Merill Lynch, Animoca Brands, HSBC, Rocket Internet and Google.

Our webapp and native mobile apps will be launching soon. Sign up for our waitlist at https//:demether.io and follow us on X.com/DemetherDefi for the latest news.

In traditional finance, $TSLA pays no dividend — meaning holders earn nothing unless the price goes up. Sophisticated investors seeking a yield on the stock may engage in derivative strategies, such as selling covered calls, to enhance their returns, however this requires understanding of both the complex methods and risks involved. It’s not for everyone.

Bringing a tokenized version of $TSLA on chain dramatically changes the picture. Multiple new strategies open up to ordinary investors by using DeFi protocols, including lending through onchain money markets (acting like your own bank), pooling liquidity (acting as your own market maker) or even more sophisticated strategies such as leveraged looping.

We will explore liquidity pools as the most accessible strategy available for tokenized stocks issued by xStocks, an organisational alliance bringing real world assets on chain led by Kraken and Backed.fi, in this piece.

Here are the top pools by liquidity for $TSLA on Solana (tokenized by xStocks as $TSLAx).

NOTE: * Orca APRs are based on 365 days of fees, while Raydium APRs are calculated from the past 30 days of fees. PancakeSwap and Meteora APRs are based on fees generated in the last 24 hours at the time of writing.

Liquidity pools have a preset fee (typically fractions of a percent for highly liquid correlated pairs up to 1% for exotic, uncorrelated pairs) which a user conducting a swap transaction will automatically pay as their exchange one asset for another.

The fee is collected by the smart contract itself and shared between the users that have contributed liquidity to the pool (ie placed their assets into the smart contract to allow others to trade the asset onchain), and the protocol. This incentivises asset owners to deposit their assets in the platform to create utility and the developers of the protocol to maintain and improve the application, respectively.

The amount of fees a user receives is in proportion to the liquidity supplied to the pool compared to the total liquidity available. A user supplying half of all the assets in the pool will be entitled to half of the fees generated.

The more trading activity through the pool will increase the amount of fees generated for the liquidity suppliers. Typically, this is driven by a number of factors including price volatility in the asset, general market activity across crypto (ie the cycle) and overall demand for the assets in the pool.

The typical pair token for a given assets is either a stablecoin or the native gas token of the network as an often highly liquid alternative (e.g. $SOL vs. $TSLA).

New to Solana? Here’s the simplest route:

1. Set up a Phantom wallet — the most user-friendly wallet for Solana.

2. Buy stablecoins (like USDC) via an exchange or on-ramp.

3. Swap half of your USDC into $TSLAx — available on major Solana DEXs, or via Kraken in certain jurisdictions.

4. Deposit both assets into one of Raydium’s TSLA pools by selecting the price range and the amounts that you would like to deploy; start earning fees + rewards.

5. Monitor and compound — fees do not compound automatically, so redeem your fees and deposit them back into the pool to further enhance your returns.

For most investors, liquidity pools offer an easier route to generate returns on idle exposure, however there are a number of risks (many of which do not exist outside of crypto) that they must be mindful of before depositing their assets:

• Impermanent Loss (IL): If TSLA moves significantly vs its paired asset (e.g., USDC), your position may rebalance into less TSLA. This may not be a problem at any given moment but if the position continues to move outside of the range you have set, investors lose out on capturing the upside movement in price. The effects are also amplified to the downside as the position will accumulate more TSLA as the price declines against the paired asset. Typically, this can be mitigated by regular rebalancing of the position to recentre the range on the price.

• Smart Contract Risk: Stick to established, audited protocols to mitigate the risk of potential smart contract exploits or errors.

• Market Risk: Tokenized TSLA will generally mirror real TSLA volatility so, if the stock declines, so does your LP value. Also note that the liquidity pool price of TSLA stock could suffer temporary dislocations given it is driven by the supply/demand dynamics of the pool rather than being directly linked to traditional financing markets. Arbitrage activity may only catch up at a lag.

• Liquidity Risk: If the pool is small, large deposits/withdrawals can trigger slippage whereby the price of execution of a swap may deviate.

From our experience, as a general rule of thumb, higher yields have typically reflected a higher risk. Choose pools that match your risk tolerance.

Demether provides frictionless access to yield opportunities on real world assets. We are backed by Web3 native investors and founded by a team hailing from JPMorgan, Goldman Sachs, Bank of America-Merill Lynch, Animoca Brands, HSBC, Rocket Internet and Google.

Our webapp and native mobile apps will be launching soon. Sign up for our waitlist at https//:demether.io and follow us on X.com/DemetherDefi for the latest news.