Behind the 1 Billion Dollar Transaction: How Much Selling Pressure Can Coinbase Stock Tokens Handle While the U.S. Stock Market is Closed?

Simulation trading tests show that high trading volume does not equate to sufficient exit liquidity, and large sell-offs carry the risk of slippage.

Written by: Liam 'Akiba' Wright

Translated by: Saoirse, Foresight News

With a trading volume exceeding $1 billion, the appearance of fervent trading in Coinbase stock tokens is created. However, for holders, the core issue lies in how large a sell-off the current market can absorb and the transaction prices, especially during the closed hours of the U.S. stock market.

Pre-market tests on September 23 showed that the 10 types of 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 are merely calculations for instantaneous single orders and do not represent the market's capacity to absorb multiple simultaneous sell orders.

During the verification period, the combined balance of the 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 includes 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 about $1.02 billion, with a total market value of $19.82 million. The community's self-built data annotation indicates there may be missing data. Volume is the result of historical trading accumulation and does not equal a buyer's liquidity pool waiting to absorb large sell orders at any time.

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 magnitude by which the routed estimated output dollar value is lower than its input valuation, and it does not align the token price with the underlying U.S. stock prices, nor does it represent actual trades.

Calculation method: The liquidity pool data is taken from the 10 records of Aerodrome Slipstream 3 stock / USDC at 08:00 UTC. The KyberSwap routing data was scraped between 08:02:01 and 08:02:42 UTC. According to the token display price, the sell scale is approximately equal to $100,000; there is a slight deviation in input valuation from KyberSwap itself. Values have been rounded, gas fees are calculated separately, and no real transactions have been sent; after calling the API, a trade still needs to be constructed separately.

When the single token trading size is about $10,000, the sell quote price difference is only 0.01%–0.12%; however, when the order is scaled up to $100,000, the price difference generally increases. Some trading routes aggregate Aerodrome and other sources of liquidity, thus the estimated price covers multiple liquidity pools. But once market makers and liquidity providers adjust their quotes, such extra liquidity can change rapidly.

The liquidity pool balance relies partly on rewards to retain liquidity providers. According to Aerodrome's liquidity pool governance rules, liquidity providers forfeit direct trading fees when they stake positions to obtain AERO token emission rewards; the fees will be distributed to users who vote to decide the flow 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, through Merkl, provides USDC incentives every two weeks, and Beefy layers additional rewards through Aerodrome token emissions. This describes the liquidity incentive plan at the early stage of launch and not all liquidity pools currently have verifiable stable income. Regardless of the historical trading volume of tokens, once incentives or governance votes shift to other assets, liquidity providers can withdraw their funds.

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

When the underlying U.S. stock market is closed and tokens are still tradable, the risks in the capital structure become apparent.

The Base documentation states that Coinbase stock tokens are backed by underlying shares held in a regulated custodial account and are only open to qualified users outside the United States. The 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. stock 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 halted. 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; primary redemption channels are not available to ordinary users.

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