Tokenized Stocks: 5 Different Models - But Only One Really Works
Everyone in crypto is talking about “tokenizing stocks.”
Banks, exchanges, and startups all claim they are putting securities on the blockchain.
But according to legal researcher Gabriel Shapir, the term tokenized securities actually refers to five completely different models.
And most projects today are not truly putting securities onchain.
👉 Here’s the breakdown.
1️⃣ Blockchain as the Stock Ledger (The Real Model)
In this approach, the blockchain is the official shareholder registry.
Tokens represent entries directly on the company’s stock ledger.
When ownership changes onchain, the legal record changes as well.
There is no separate database, no transfer agent updating records later.
The blockchain itself becomes the final settlement layer.
Some jurisdictions like Delaware already allow companies to maintain stock ledgers on distributed systems, which makes this model legally workable.
This is the only model where:
• Onchain state = legal ownership
• Transfers settle instantly
• DeFi integration becomes possible
2️⃣ Tokens as Digital Stock Certificates
This model tries to recreate the old system of paper stock certificates, but digitally.
In theory, transferring the token transfers the certificate.
The problem is legal.
Under Uniform Commercial Code Article 8, securities certificates are still defined as paper documents in most jurisdictions.
Until laws change, tokens cannot fully replace certificates in many legal systems.
3️⃣ Tokens as Ownership Instructions
Here, tokens simply act as messages.
When a token moves from one wallet to another, it tells the issuer to update the ownership record.
But the real stock ledger still lives offchain.
That means:
• settlement can lag
• issuers can reject transfers
• the blockchain is only a messaging layer
In other words, it’s basically the traditional system with extra steps.
4️⃣ Tokens as Control Agreements
A more complex version of the previous model.
Token holders receive contractual rights allowing them to instruct the issuer regarding the underlying securities.
This gives token holders more power, but the token still does not directly represent the shares themselves.
Ownership remains tied to legal agreements rather than the blockchain.
5️⃣ Synthetic Tokens
This is what many platforms are actually doing today.
Instead of tokenizing securities, they create synthetic assets that track the price of stocks.
These products behave more like derivatives.
Owning a synthetic token referencing Apple stock does not give you shareholder rights or voting power.
You only get price exposure.
Why This Distinction Matters
The promise of tokenized securities isn’t just putting stocks onchain.
The real vision is a financial system where:
• assets settle instantly
• ownership is transparent
• tokens integrate with DeFi
• governance and dividends can execute automatically
But that future only works if the blockchain itself is the official ledger.
Otherwise, tokenized securities are just digital souvenirs of real-world assets.
💬 The real question now:
Will financial markets actually move toward true onchain ownership, or will most tokenization projects remain halfway solutions❓❓❓❓
This article is for informational purposes only. The information provided is not investment advice.
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