What are tokenized stocks?

Tokenized stocks are blockchain tokens that connect to exposure to company shares. The issuer’s arrangement determines what backs them and what holders can claim.

In a hypothetical example, a token follows an investment in a company’s shares. Holding that token is not automatically the same as owning a share in a brokerage account, with identical voting and redemption rights.

A little more technical

Coinbase’s stock tokens use stock-backed certificates. Chainlink’s documentation describes how their pricing combines the share price with an issuer-controlled multiplier for changes such as dividend reinvestment. One token does not necessarily represent one share forever. Other products can use different structures.

Common misunderstanding

A token in a wallet does not remove geographic restrictions, issuer controls or custody dependencies. Read the particular arrangement rather than assuming all stock tokens work alike.

No prerequisite reading is needed. Sources: Aave on Coinbase’s structure and Chainlink on valuation.