By Zeus

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Core idea: Most tokenized stocks today are wrappers that give you economic exposure, not direct shareholder ownership.

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Tokenized stocks sound simple. A stock, but on a blockchain.

In reality, there are a few very different ways these products are built. Understanding the structure matters far more than branding.

No, I am not a financial advisor. I just spend a lot of time looking at my screen.

What people mean by "tokenized stocks"

Most tokenized stock products today are not "stocks living onchain" in the strict sense. They are legal and financial structures that hold real shares somewhere in the traditional system. A token on a blockchain mirrors the economic exposure.

How close that token is to real ownership depends entirely on the model.

The most common model: custody-backed wrappers

This is the approach used by many tokenized stock platforms today.

1. A regulated entity (broker, custodian, or SPV) opens a traditional brokerage account.
2. That entity buys real shares of a public company.
3. The shares sit in custody under the entity's name.
4. The platform issues tokens on a blockchain that correspond to those holdings.

For every share (or fraction) held offchain, a matching number of tokens are minted onchain.

What happens when you buy a token

From your perspective, you swap stablecoins for the token and it appears in your wallet.

Under the hood:

• If you buy from another token holder, the token moves onchain and the underlying shares do not move.
• If you buy newly issued tokens, the issuer either uses inventory or buys more shares, then mints new tokens.