On-Chain Stocks Could Misprice Over Weekends, Triggering Arbitrage Risks: RedStone

As real-world asset (RWA) tokenization surges, the crypto industry is entering unfamiliar territory, bringing traditional equities, private credit, and commercial paper onchain and uncovering potential critical risks along the way.

Marcin Kaźmierczak, co-founder of oracle provider RedStone, says a risk is potentially being overlooked: the weekend gap, where crypto trades 24/7, while Wall Street does not.

In traditional finance, if disaster strikes a company over the weekend, the market is closed and then the stock “gaps down” when the opening bell rings on Monday. Meanwhile, in the crypto market, trading never stops. As more stocks are brought onchain, the gap in weekend trading on the blockchain for traditional equities versus when the market opens on Monday could pose a risk, according to Kaźmierczak.

For example, a tokenized version of Tesla stock that is traded on a decentralized exchange allows traders to buy and sell it at 3:00 a.m. on a Sunday, while the TradFi market remains closed.

“Imagine if a Tesla factory explodes over the weekend—traditional markets are closed, but on-chain markets are open,” Kaźmierczak said in an interview with CoinDesk at Devconnect Buenos Aires. “We might see a dislocation of the tokenized stock versus the real value on Nasdaq.”

This mismatch, he argues, could create what he calls a “price dislocation,” where an on-chain asset appears stable, but only because the oracles, which send data from the outside world to a blockchain, have stopped updating prices. Major providers typically freeze equity price feeds when U.S. markets close at 4 p.m. ET Friday, resuming only Monday morning. In that window, on-chain versions of Tesla, or any other stock, could keep trading, even if their real-world price should have changed dramatically.

Most tokenized stock trading activity is currently focused on centralized exchanges, where trading of these products is often limited during the weekend. But the goal of the industry is to make these tokenized stocks permissionless and available in DeFi protocols. That means 24/7 activity.

If the oracle doesn’t update until markets reopen, on-chain protocols could be trading on “ghost” prices, creating massive arbitrage opportunities or leaving lending protocols under-collateralized.

The problem intensifies with complexity.

While stablecoins are relatively safe, Kaźmierczak pointed out that the market is shifting toward more complex products, such as tokenized portfolios of credit, commercial paper, and equities.

“Essentially, we are seeing launching a hedge fund on-chain,” Kaźmierczak noted, describing future portfolios that might be “50% allocated into T-Bills, 20% into private credit, 20% into commercial paper, and 10% actively managed.”

If oracles lag during real-world volatility, structured DeFi protocols could be left mispricing assets. RedStone advocates for a modular oracle architecture and supports both “Push” and “Pull” models. In the “Pull” model, users get data delivered on-chain when they interact with a protocol, meaning “the data is always fresh,” according to Kaźmierczak. However, he conceded that most protocols still rely on the older model because it is easier to integrate.

“Right now, it’s probably like 90% of solutions using the Push Oracle,” he said, noting that while “Pull” was an innovation for scaling, the majority of the market still adapts the legacy standard. Until oracles and protocols evolve to account for these timing mismatches, Kaźmierczak suggested that the premise of 24/7 tokenized finance carries inherent risks.

As more RWAs go live, the challenge will be managing the gap between open protocols and closed traditional markets.

“We still need to see how they behave on the weekend,” Kaźmierczak warned.

Read more: Nasdaq Seeks Nod From U.S. SEC to Tokenize Stocks