The Illusion of $1 Billion in Trading Volume? Testing the Real Selling Pressure of Coinbase Stock Tokens During U.S. Market Closure

Author: Liam 'Akiba' Wright, cryptoslate

Compiled by: Saoirse, Foresight News

A trading volume exceeding $1 billion creates the illusion of a booming market for Coinbase stock tokens. However, for holders, the core issue lies in how much selling pressure the current market can absorb and at what price, especially during the U.S. stock market's closure.

Pre-market tests on September 23 showed that the 10 stock tokens issued by Coinbase on the Base chain each had simulated buy and sell quote paths with a scale of $100,000. The estimated proceeds from selling were 0.06% to 0.71% lower than the token valuations provided by KyberSwap. These quotes represent only instantaneous single orders and do not reflect the market's capacity to absorb multiple orders sold simultaneously.

During the verification period, the total balance of 10 core Aerodrome stock / USDC liquidity pools was approximately $12.97 million. The scale of individual liquidity pools ranged from about $818,700 for MSFTc to about $2.11 million for NVDAc. The balance included both stock tokens and USDC, and this figure alone cannot determine the amount of funds available to absorb sell orders within a specified price range.

The stock token data panel from Dromos Kitchen shows that as of September 23, the cumulative trading volume of these tokens was approximately $1.02 billion, with a total market capitalization of $19.82 million. The community's self-built data annotation indicates that there may be missing data. The trading volume is the cumulative result of historical trades and does not equate to the buyer's liquidity pool waiting to absorb large sell orders at any given moment.

What Does the $100,000 Quote Indicate?

The table below pairs the balance of Aerodrome liquidity pools with the estimated buy and sell exchange paths from KyberSwap. The difference in quotes represents the extent to which the estimated output dollar value from routing is lower than its input valuation, and it does not benchmark the token price against the underlying U.S. stock price, nor does it represent actual transactions.

Calculation Method: The liquidity pool data was taken from 10 Aerodrome Slipstream 3 stock / USDC records at 08:00 UTC. KyberSwap routing data was captured from 08:02:01 to 08:02:42 UTC. Based on the displayed token price, the sell scale was approximately $100,000; KyberSwap's own input valuation had a slight deviation. Values were rounded, gas fees were calculated separately, and no real transactions were sent; after calling the API, a separate transaction construction was still required.

When the single token trading scale is about $10,000, the sell quote spread is only 0.01% to 0.12%; when the order is expanded to $100,000, the spread generally widens. Some trading routes aggregate Aerodrome and other liquidity sources, thus the estimated price covers multiple liquidity pools. However, once market makers and liquidity providers adjust their quotes, this additional liquidity can change rapidly.

The balance of liquidity pools partly relies on rewards to retain liquidity providers. According to Aerodrome's liquidity pool governance rules, when liquidity providers stake their positions to receive AERO token emission rewards, they forfeit direct trading fees, which are allocated to users who vote to decide the direction of rewards. Fee income and AERO token rewards are two independent economic sources for the liquidity pool.

During the launch phase in August, Beefy stated that Coinbase provided USDC incentives through Merkl every two weeks, and Beefy added additional rewards through Aerodrome token emissions. This describes the liquidity incentive scheme at the initial launch and does not imply that all liquidity pools currently have verifiable stable returns. Regardless of the historical trading volume of the tokens, once incentives or governance votes shift to other targets, liquidity providers can withdraw their funds.

Coinbase stock tokens can still be traded 24 hours a day during U.S. market closures, with secondary market liquidity provided by Aerodrome liquidity pools, but the quotes are only estimates and do not equate to actual sellable capacity.

When the underlying U.S. stock market is closed and tokens can still be traded, the risks of the funding structure become apparent.

Base documentation states that Coinbase stock tokens are backed by underlying stocks held in regulated custodial accounts and are only open to qualified users outside the U.S. Developer documentation mentions that secondary market trading of tokens does not require permission, but there are address risk controls; the primary minting and redemption rights of the underlying stocks are only open to authorized participants.

During U.S. market closures, tokens can still circulate on-chain. Base documentation also states that Chainlink stock oracles will maintain the previous trading day's price during non-trading hours, and on-chain token trading will not be paused. When holders sell after hours, the oracle price remains at the old price, and the immediate selling price is entirely determined by secondary market liquidity providers, with primary redemption channels not in the hands of ordinary users.

The routing test on September 23 proved that even with a small liquidity pool, a single $100,000 order can still receive a simulated quote. However, during the oracle price freeze period, changes in AERO governance votes, liquidity withdrawals, and sudden news about individual stocks after hours can all lead to significant fluctuations in quotes.

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