1/ Not all tokenized equities are created equal.
Tokenization models vary widely, creating confusion—especially around “wrapped” stocks.
Here’s fact vs fiction, and how Ondo's approach ensures tokens are redeemable, secured, and fully backed by referenced securities.
2/ Wrapping isn’t new
ADRs and GDRs have followed this model for decades: banks issue receipts backed by foreign shares, redeemable by the holder.
These wrappers rely on intermediaries and layers of trust, an approach that shapes how many other tokenized assets work today.
3/ Even when you “own” stocks in a brokerage account, you don’t hold them directly.
You are recorded as the beneficial owner by your broker.
Your broker holds the assets in “street name” on the DTC’s records.
The stocks are held at the DTC in the name of Cede & Co. (DTCC) as the legal titleholder.
Each intermediary is performing a trusted “wrapping” function. You trust that the system works and your rights are preserved at each stage.
4/ The key question isn’t whether wrapping is legitimate—it’s whether it’s done well.
Wrapping is common, but not all wrappers are created equal.
What matters is whether the structure actually safeguards holders and gives them enforceable rights to the underlying asset.
5/ At Ondo, our Global Markets model for tokenizing stocks, ETFs, and other assets is built for robust investor protections.
Tokens are:
- Redeemable on-demand, 24/5
- Fully backed and secured by real shares held at licensed U.S. broker-dealers
- Verified daily by an independent third party.
6/ In addition, a third-party Collateral Agent holds a first-priority security interest in the shares.
In an issuer default event (e.g. insufficient backing, unfulfilled redemptions), the agent is obligated to liquidate the shares and return proceeds to tokenholders.
This structure is built to enforce rights, not just promise them.
7/ A trustworthy wrapper doesn’t just make promises—it enforces rights.
Many tokenized equity models don’t. They skip the basics:
No collateral
No transparency
No security interest
No (or limited) redemption rights
That’s not protection. That’s risk.
8/ With Ondo Global Markets, redeemability is built-in, not optional.
Tokens track the current value of the underlying stock, and can be redeemed at any time during trading hours.
If there’s an event like an acquisition, holders get that value too.
9/ Redemption pricing is grounded in quotes from licensed broker-dealers, subject to market regulations.
This isn’t a theoretical bridge, it’s the real, verifiable thing.
It gives holders confidence that the token truly reflects the underlying asset value.
10/ Remember: promises aren’t protections.
Tokenized equities can modernize access and transparency, but only if they are built on real assets and enforceable protections.
That is the standard we are setting with Ondo Global Markets.
Read more on our blog:
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