The short answer

When you hold a tokenized stock, you almost never hold the stock. You hold a token whose value is supposed to track a share, backed by an arrangement in which somebody else holds the actual share, or a derivative of it, or nothing at all. The token is the visible part. The arrangement behind it is the part that determines whether you get paid.

That is not a criticism, it is a description. Almost everything retail investors already hold is a claim on a claim. Shares bought through a broker in the United States sit in street name at a central depository, and what the investor holds is a book entry against the broker. Tokenization does not invent the intermediation problem. It changes who the intermediary is, which law governs the claim, and how quickly the position can move.

The three structures behind the word

The first structure is fully backed and custodied. An issuer buys the underlying share, parks it with a custodian, and mints one token per share. Redemption is the load-bearing feature: if you can hand back the token and receive the share or its cash value, the token has a hard anchor. If redemption is limited to a short list of approved institutions, retail holders have an anchor only insofar as those institutions find arbitrage worth doing.

The second structure is a derivative in a token wrapper. The issuer does not hold shares at all. It holds a swap, a futures position, or a hedged book, and the token represents exposure. This can track price well and it can be cheaper to run, but the holder is exposed to the issuer's hedging and to its counterparties, not to a share sitting in a vault.

The third structure is a synthetic minted against collateral in a protocol. A price oracle sets the reference, over-collateralised positions mint the token, and liquidations keep the system solvent. Here you own an obligation from the protocol, priced by a data feed. There is no share anywhere in the system, and the failure modes are oracle failure and collateral failure rather than custodian failure.

What you are actually owed

Work through the corporate actions, because that is where the wrapper either holds or leaks. Dividends: does the issuer pass them through in cash, in more tokens, or by adjusting the reference price, and does it take a cut. Stock splits: is the token supply adjusted, or the ratio. Mergers, tender offers, delistings: what happens to your position when the underlying stops existing in its current form. Voting: in nearly every design, the custodian or issuer holds the voting rights and the token holder does not vote. If a structure claims otherwise, the mechanism for it is the thing to read.

Then read the bankruptcy question. If the issuer fails, are the underlying shares held in a segregated, bankruptcy-remote vehicle for the benefit of token holders, or are they on the issuer's balance sheet with token holders ranking as unsecured creditors. This single distinction separates a wrapper that survives a bad quarter from one that does not, and it is a legal fact rather than a technical one. No amount of smart contract auditing changes it.

Why the trading hours question is harder than it looks

The pitch for tokenized equities is that shares should trade the way stablecoins trade: continuously, globally, settling in seconds. The mechanism can deliver that. The economics fight back. Between the closing bell and the opening bell, the primary market is shut, so the arbitrage that keeps a wrapper pinned to its underlying cannot be completed. Market makers quoting overnight are pricing a position they cannot hedge cleanly, and they widen accordingly. Weekend prices on tokenized equities are therefore best read as the market's guess plus a carrying charge, not as the share price.

The same logic explains why the deepest onchain equity liquidity tends to cluster on general-purpose AMMs rather than in bespoke venues. On the Robinhood Chain snapshot, DEX volume of $495.1m in 24 hours is dominated by Uniswap V3 at $231.9m and V4 at $213.7m, with $46.5m on V2 and smaller flow on GMGN and Metric V1 (source: DefiLlama). Concentrated liquidity venues are where a market maker can post a tight range and defend it, which is exactly what a tracking instrument needs.

Where it breaks

Five places. Redemption gates, when only whitelisted parties can convert and the retail bid decouples. Oracle dependence, when the token's price is defined by a feed that stops updating during exactly the volatility that matters. Transfer restrictions, when compliance logic in the contract blocks a transfer that a decentralised exchange assumed would settle, breaking composability in ways lending markets discover late. Jurisdiction, when the offering is legal for some holders and not others, and the token does not care. And thin secondary markets, where a wrapper trades a few percent from the underlying for days because nobody is paid enough to close the gap.

What to watch

Three numbers tell you more than any brochure. First, the gap between the token's onchain price and the underlying's last close, measured during market hours, which is the honest read on whether arbitrage works. Second, redemption throughput, meaning how much has actually been converted back rather than how much could be in theory. Third, the stablecoin base underneath the venue, because equity wrappers settle against dollars: the chain snapshot shows $714.4m of stablecoin supply against $603.2m of TVL, with fees of $2.1m in 24 hours and $76.9m over 30 days (source: DefiLlama). Wrappers are only as liquid as the cash leg they trade against.

The trade being made

Tokenization buys you settlement speed, programmability, fractional size, and access from places a brokerage account will not reach. It sells you the legal simplicity of owning a registered share with a regulated broker and an investor protection regime attached. Whether that is a good trade depends on which structure you are in and on what happens on the worst day, not the average one. The correct question is never whether a tokenized stock is real. It is whose promise it is, and what happens to that promise when the promiser is under stress.