What is Tokenized Equity?
Glossary · Equities
A tokenized equity is a blockchain token that represents ownership of, or economic exposure to, a real company share. Backed versions are collateralized 1:1 by the underlying stock held in regulated custody; the token trades 24/7 and its on-chain price is tracked against the share's net asset value (NAV).
How tokenized equities work
An issuer such as Backed (xStocks), Ondo Global Markets, or Securitize buys and holds the underlying share in regulated custody, then mints a matching token — for example NVDAon, TSLAx, or METAon — on a public chain like Solana or Ethereum. The token can trade and settle on-chain around the clock, while a mint-and-redeem process keeps the supply roughly 1:1 with the shares held in custody.
Price discovery uses oracles. Low-latency feeds (Pyth) and on-chain reference feeds (Chainlink) publish the market price, and the issuer publishes the fund or share NAV. Dividends and corporate actions are handled per each issuer's terms — some reflect them as a token adjustment or distribution, others do not — so the exact rights attached to a token always depend on the issuer.
Backed vs synthetic tokenized stocks
A backed (or asset-referenced) tokenized stock is collateralized by a real share held 1:1 in custody. A synthetic tokenized stock instead offers price exposure through collateral and derivatives, with no real share behind each token. Backed structures carry custody, issuer, and redemption considerations; synthetic structures add collateral and counterparty considerations.
Compared with a traditional brokerage share, a tokenized equity adds 24/7 trading, fractional sizing, on-chain settlement, and composability — and adds smart-contract, custody, liquidity, and jurisdictional considerations that a traditional share does not. This is information, not advice.
Frequently asked questions
Do tokenized stocks pay dividends?
It depends on the issuer. Many backed tokenized stocks reflect dividends as a token adjustment or distribution under the issuer's terms, while others do not pass them through. Always check the specific product's documentation.
Is a tokenized stock the same as owning the real stock?
Usually no. A backed tokenized stock is a claim on a share held in custody by the issuer, not direct registered ownership on the company's books. Voting and dividend rights depend on the issuer's terms.
Can US investors buy tokenized stocks?
Access is jurisdiction-gated and many products explicitly exclude US persons or restrict eligibility. Check each issuer's eligibility rules before assuming access.
Related terms
- Real-World Asset (RWA) — A real-world asset (RWA) in crypto is an off-chain asset — a Treasury bill, equity, fund, bond, commodity, or property — represented as a blockchain token.
- NAV Premium & Discount — NAV premium (or discount) is the gap between a tokenized asset's on-chain market price and its net asset value (NAV) — the value of the underlying share or fund.
- Multi-Oracle Pricing — Multi-oracle pricing values a tokenized asset by comparing several independent price feeds — such as Pyth, Chainlink, the issuer's published NAV, and the on-chain market price — instead of trusting one source.
Informational only · not financial advice. See the live data on the newsroom. · ← All glossary terms