Felix spot equities will give traders access to over 100 US equities and ETFs at launch with NYSE/Nasdaq liquidity for each. How? In this brief article, we will walk through the design implementation of Felix spot equities. More technical information + FAQs will be answered in documentation soon.

Felix spot equities are optimized to minimize execution costs via permissionless buys/sells that tap into offchain liquidity, effectively removing the need to bootstrap liquidity for each market and force unnecessary elevated execution costs onto traders. Traders will be able to place orders of large size with less than 10 bps cost on the most commonly traded assets. Some longer-tail assets may reach higher execution costs around 20 bps in times of elevated volatility. Still, these costs are consistently low relative to current secondary onchain equity markets elsewhere. With Felix spot equities, users don't have to worry about unreasonable slippage. For example, at launch, a user will be able to buy seven figures of GOOGL at 10bps net execution cost.

Additionally, Felix spot equities provide users access to hundreds (and eventually thousands over the coming months) of equities/indices immediately at launch. As a result, traders can transition their typical brokerage activity onchain without needing to worry about a lack of offerings or lack of liquidity on their commonly traded tradfi assets.

What exactly are Felix spot equities + how do they function?

Given that Felix spot equities are available through a mint/redeem engine instead of just an orderbook or AMM, traders are able to achieve much cheaper execution on significantly more assets than would be available elsewhere. In practice, when you are buying or selling a Felix spot equity, you are minting or redeeming a tokenized equity that is provided by Ondo on Ethereum mainnet, which in turn taps into liquidity on traditional exchanges such as the Nasdaq and NYSE. You can think of this process in a similar way to how a stablecoin like USDC or USDH works: a tokenized representation of an asset being held off chain.

How will users get Felix spot equities on Day 1? Users will place buy/sell orders through the

trade.usefelix.xyz frontend with USDC or the spot equity token (if selling). That USDC or spot equity token is processed through a Felix smart contract, which mints/redeems the tokenized equity through Ondo and then returns USDC or the equity to the user.

Once the Felix smart contract has successfully minted or redeemed the spot equity, that same spot equity is also purchased or sold by Ondo and held or withdrawn from a brokerage account (of which the holdings are published daily by third party auditors). This design creates a more optimal trading experience that ultimately allows traders to easily rotate funds into spot equities without having to worry about off ramping or the associated trading costs and illiquidity that currently plague other onchain spot equity markets.

Why are Felix spot equities on Ethereum at launch?

Felix spot equities will launch on Ethereum mainnet as Ondo Global Markets is not yet available on HyperEVM. In the meantime, we have built seamless fund flow / connectivity between HyperCore portfolios and Felix spot equity accounts. When a Hyperliquid trader wants to trade spot equities, they simply deposit USDC from their HyperCore spot or perps balance. Similarly, if a trader desires to transfer funds back to trading crypto perps and spot on HyperCore, they just withdraw to HyperCore and funds populate in seconds. We plan to soon migrate the mint/redeem logic to HyperEVM in a later implementation, which will reduce transaction costs and order times.

How do dividends work with Felix spot equities?

Felix spot equities give token holders economic exposure to the underlying stock’s price action, corporate actions, and income distributions. A typical question about Felix spot equities is if traders will have exposure to dividends. In the initial implementation, instead of receiving dividends, shares per token will grow over time to account for dividend value. For example, over time, the price of a token for Pepsi Co (PEP) will deviate from the underlying share. When the tokens were initially launched, 1 PEP token = 1 PEP share. But as dividends were issued, 1 PEP token = 1.01 PEP shares. Based on user feedback, the dividends implementation can be adjusted.

Serving the Trader

Felix spot equities will bring net new asset access to onchain traders with launch soon. As usual, if you have questions or are interested in early access, feel free to reach out to the Felix team via Twitter DM or to a Felix team member individually.