1. What Are Tokenized Stocks?

Tokenized stocks are blockchain-based digital assets that reflect the value of shares in public companies, such as Apple Inc., NVIDIA Corporation, or Tesla, Inc.

These tokens allow users to gain exposure to stock price movements without having to purchase the shares directly on a stock exchange.

Key characteristics:

• Digital representation: The token reflects the value of the underlying stock asset.

• Non-voting: Does not grant voting rights at shareholder meetings.

• Price exposure: The token’s value tracks the price of the underlying stock.

Important note:

Tokenized stocks have no direct relationship with the public companies they represent. These tokens are issued by third parties.

2. How Does It Work?

Tokenized stocks combine blockchain technology with traditional financial systems:

• Tokenization: Stocks are represented as tokens on blockchains such as Ethereum or Solana.

• 1:1 Asset Backing: Tokens are generally designed to be backed by the underlying stocks held by a custodian.

• Price Synchronization: Token prices track stock prices in traditional markets.

Important note:

Price gaps may occur due to:

• Crypto markets: 24/7

• Stock exchanges: limited operating hours

3. Comparison: Tokenized vs. Traditional Stocks

The following is a comparison table to help you understand the advantages and unique characteristics of both instruments:

Transfer Flexibility

Tokenized stocks can be transferred like any other cryptocurrency to various supported blockchain networks, including:

• Solana Network

• ERC20 Network

• Arbitrum Network

• And other networks

Users have the flexibility to transfer assets to other wallets (self-custody) or between platforms.

Important note:

The availability of transfer networks depends on the support provided by the platform being used, whether it is a centralized exchange (CEX), a decentralized exchange (DEX), or a private wallet. Not all networks are always available on every platform.

4. Corporate Event

Corporate actions involving tokenized stocks are aligned with the underlying asset.

A. Dividend

A dividend is a distribution of a company's profits to its shareholders.

• Use Dividend Reinvestment.

• Dividends are automatically reinvested.

• Your token balance increases by the amount of the dividend.

B. Stock Split

A stock split is the division of shares into a larger number of units, with the price per unit decreasing proportionally.

• The number of tokens increases.

• The price per unit decreases proportionally.

• The total value remains the same.

C. Reverse Stock Split

A reverse stock split is the opposite of a stock split; it involves combining multiple shares into a smaller number of shares with a higher price per share.

• The number of shares decreases.

• The price per share increases proportionally.

• The total value remains the same.

D. Example Table of Multiplier Changes

Important note:

Holders of Indodax tokenized stocks do not need to take any action in anticipation of corporate actions; the number of tokens will automatically adjust proportionally.

Note:

This information is provided for educational purposes only. This post does not constitute a solicitation to buy, investment advice, or a financial recommendation.