Amazing 20 for 1 Stock Split Will give Major Boost to Decentralized Tokens Providers
Amazon executed a 20-for-1 split for its stock over the weekend, going from US$2,447 a share to roughly US$122 a share.
Amazon’s stock split and the consequential lower share price make it a lot more attainable for someone to own all the shares. Bank of America reported that stock splits potentially result in higher returns, saying, “S&P 500 companies that announced stock splits since 1980 have returned an average of 25.4% over the following 12 months, versus the S&P 500’s average return of 9% over the same period,” per Yahoo Finance. As you know, the stock market has a great influence on the cryptocurrency market; from stablecoins to DeFi Tokens, each and every cryptocurrency has a direct impact.
Amazon’s Stock Break Up
The 20 for 1 stock split took effect on June 6th, splitting each existing share of AMZN into 20 individual units. Earlier, Amazon had announced that every shareholder of the company would get 19 more shares for each share they held. Notably, this is the biggest stock split in Amazon’s history. The shares now trade at the price of US$128.
The company’s split-adjusted stock price came into effect after the closing of trading on Friday, June 3. Therefore, Amazon’s closing price on June 3 got divided by 20 in order to accommodate the increased number of shares before June 6. All the investors who had Amazon shares on or before May 27 became eligible to get the benefit provided by the stock split. However, this split is not going to affect the business fundamentals but will only open more avenues for new investors looking to invest in the company.
For many investors (new and old) this split is working as a firefly in the darkest night. But its effect on the DeFi Tokens is quite different from what you would expect. There are various projects that offer decentralized tokens representing real-world stocks. For instance, DeFiChain lets users mint and trade dAMZN, which closely follows the Amazon stock in DeFi to give you price exposure (but not ownership). The main purpose of DeFiChain is to enable financial transactions in any type of crypto asset, such that people can use the assets and coins they hold, as currency for investment in other types of financial vehicles.
Anyone with a staked share of 50% DFI and 50% of any other assets’ combination can mint the assigned dToken. If investors don’t want to provide a mix of DFI or other assets, they can use DeFiChain’s decentralized stablecoin dUSD to mint a dToken. These dTokens aim to mimic the price action of the actual asset, providing an individual with the opportunity to invest and withdraw their favorite stock obviating the hassles of a traditional bank process.
What does it mean for DeFi tokens tracking AMZN?
It’s notable that the crypto market continues to show a high correlation with the stock market, with the latter’s performance invariably influencing crypto. The mirroring is also reflected in the DeFi tokens sector, and as such, the stock split does have an impact on dAMZN.
dAMZN was also split into 20 tokens, with holders receiving 20 tokens for every one of their dAMZN tokens. However, it does not mean that the holder’s investments will increase 20 times.
In short, no value changes. Same as in the stock market, anyone previously holding a tokenized Amazon asset (dAMZN), now holds 20 of them, worth the same total value. The process was completed in two stages: first, DeFiChain locked all existing dAMZN tokens, and as the market reopened at the split-adjusted prices, DeFiChain began reflecting the adjusted price.
Furthermore, geographical restrictions and trading limits have made it difficult for millions of investors to invest in their favorite US stocks. DeFiChain, with its dTokens, is helping such traders and investors gain price exposure to these assets from anywhere in the world.
Apart from that, one can also buy a fractional piece of a token, for example – You could buy 1/10th of the dTSLA token, which is almost impossible to find in the spot market. But as one knows, the limits of the imagination in the sky, and DeFiChain knows how to take it up a notch further.
In conclusion, none of the dAMZN token holders have or will be affected drastically going forward since Amazon’s 20 for 1 split itself has been executed smoothly. In this case, it matches the stock market, as brokers will have done the above seamlessly as well. However, the other advantages of tokenized stocks remain – there is simply significantly more freedom, accessibility, and efficiency. The latter holds for both capital management and time – not only is it quicker when circumventing KYC and other regulatory hurdles, but oftentimes the token can be used as collateral, or for other more niche uses such as liquidity mining as in the case of DeFiChain.
Where can Amazon Tokenized Stock Defichain be traded?
You can trade Amazon Tokenized Stock Defichain on DeFiChain DEX. Popular trading pairs for Amazon Tokenized Stock Defichain in the market include DAMZN/USD, DAMZN/CAD, DAMZN/EUR, DAMZN/PHP, DAMZN/INR, and DAMZN/IDR.
