Can unlisted stocks be tokenized? Do tokens actually correspond to real equity?
Author: Fairy, ChainCatcher
Editor: TB, ChainCatcher
Robinhood's stock tokenization plan is progressing rapidly. Last night, it completed the minting of 213 US stock tokens on the Arbitrum chain, covering mainstream targets such as Nvidia, Microsoft, and Apple.
Most notably, Robinhood has extended its tokenization efforts to unlisted private companies, including OpenAI and SpaceX. However, early this morning, OpenAI officially issued an urgent statement to "cut ties": no cooperation, no participation, no endorsement, and absolutely no approval of any equity transfer.
This tough stance quickly sparked controversy: Can unlisted stocks be tokenized? Do tokens actually correspond to real equity?
In response, we have organized the core disputes and practical challenges of "stock tokenization" in the current market, hoping to provide a clearer perspective.
I. Tokens ≠ Equity
Most stock token products in the current market are essentially price-anchored derivatives, with a structure closer to trust funds or ETFs. They provide an on-chain "shadow target" of a stock's price, rather than true equity registration.
In this model:
- Users do not have any shareholder status;
- No voting rights, no participation in corporate governance;
- No legal ownership of assets;
- Annual management and custody fees similar to funds must be paid.
Crypto KOL AB Kuai.Dong joked: "Self-controlled trading, self-issued. Yesterday's brokers, today's crypto central bank."
II. Tokenization of Unlisted Stocks May Trigger Governance Conflicts in Private Companies
Tokenizing unlisted company equity on-chain seems like an innovative breakthrough of traditional financial restrictions, but it touches complex and sensitive areas in legal reality and corporate governance.
Private companies may restrict equity "transfer" through articles of association, shareholder agreements, or investment memorandums. Here, "transfer" is not just about ownership change, but often encompasses a broad range of actions from pledging to derivative design and trading capabilities.
In the Robinhood and OpenAI incident, Dragonfly partner Rob Hadick pointed out that these companies are not obligated to recognize "stock sales you think you own". He predicts this natural contradiction will lead to more private companies directly canceling stock sales that violate shareholder agreements. This phenomenon is common in secondary markets.
Crypto KOL qinbafrank proposed another scenario: In private equity secondary markets, circulating unlisted company shares are often not direct equity, but LP shares of investment funds behind unlisted companies (usually held through SPV structures, with GP exercising rights). The transfer of these LP shares does not require official company approval and the unlisted company may not even be aware of changes in investment institution LP shares. However, despite the flexibility of LP share transactions, they are accompanied by extremely high information asymmetry risks.
Additionally, companies like OpenAI may always resist stock tokenization to maintain secondary market pricing rights, which also brings challenges to enterprises pushing tokenization forward.
III. Incremental Benefits Questionable, Limited Attraction for Large Funds
Although stock tokenization has narrative advantages like "24/7 trading" and "global barrier-free access", from the current perspective, its incremental market structure benefits remain limited, especially in attracting institutional funds.
Crypto KOL Phyrex noted that most currently circulating stock tokens are not issued by brokers, with the core issue being the inability to achieve substantial delivery. Without delivery, price deviations may not be corrected quickly, making positive arbitrage difficult. Moreover, without SEC regulatory approval, it cannot attract institutional funds with large-scale trading capabilities.
More critically, traditional stock markets do not operate 24 hours, creating a "time misalignment" with the all-day trading mechanism of on-chain stocks. Without delivery, if price anchoring completely relies on oracles, price decoupling between crypto and stocks will become the norm, and stocks cannot achieve deep sharing, causing systematic disadvantages in price depth and volatility.
IV. Triple Concerns of Audit, Compliance, and Security
In the previous round of stock tokenization attempts, lack of compliance was almost the common root of project failures. Although the overall crypto regulatory environment has slightly improved in recent years, the regulatory framework for stock tokenization remains highly uncertain, even blank.
Currently, Coinbase is actively seeking SEC approval, trying to provide stock tokenization trading services to users within a compliant framework, but no clear result has been reached so far.
Meanwhile, smart contract and asset custody issues constitute another systemic risk in this track. Stock tokenization projects typically rely on smart contracts to handle key functions like asset mapping, position recording, and equity settlement. However, if subjected to external attacks, on-chain assets could suffer irreversible losses. In a state of regulatory absence, users will find it harder to seek legal remedies or recover corresponding off-chain assets.
If the platform (such as xStocks) encounters problems in operations or systems, its connected exchanges and other partners may be quickly affected, creating a "domino effect" of implications.
"Stock tokenization" once again becomes an industry focus, undoubtedly opening up a broad imagination space for on-chain finance, but the market risks behind it cannot be ignored, and this transformative journey remains full of uncertainties and challenges.
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