Real-world asset (RWA) tokenization is on the rise, bringing traditional equities, private credit, and commercial paper to the blockchain. However, risks are emerging, such as the weekend gap where crypto trades 24/7 while traditional markets are closed.

The gap in weekend trading on the blockchain for traditional equities versus when the market opens on Monday could pose a risk. For example, a tokenized version of Tesla stock can be traded on a decentralized exchange at 3:00 a.m. on a Sunday while traditional markets are closed.

This mismatch could create a “price dislocation,” where on-chain assets appear stable due to oracle price feed freezes over the weekend. As the industry aims to make tokenized stocks available in DeFi protocols, the risk of trading on outdated prices increases.

As the market shifts towards more complex products like tokenized portfolios, the risk intensifies. If oracles lag during real-world volatility, structured DeFi protocols could misprice assets, posing significant risks to the market.

Until oracles and protocols evolve to account for timing mismatches, the premise of 24/7 tokenized finance carries inherent risks. Managing the gap between open protocols and closed traditional markets will be crucial as more RWAs go live.

The industry needs to address how protocols behave over the weekend to mitigate risks. With the increasing complexity of tokenized assets, ensuring accurate and timely data delivery is essential for the stability of the market.

Read more at Yahoo Finance: On-Chain Stocks Could Misprice Over Weekends, Triggering Arbitrage Risks: RedStone