> For the complete documentation index, see [llms.txt](https://support.backpack.exchange/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://support.backpack.exchange/exchange/backpack-securities/tokenized-securities.md). # Tokenized Securities ### Overview Backpack Securities combines real securities ownership with on-chain distribution. Investors can hold eligible securities through established brokerage infrastructure, convert them into tokenized securities on Solana, and redeem tokenized securities back into the corresponding security entitlement through Backpack Securities. By connecting traditional brokerage infrastructure and blockchain networks through a seamless, two-way door, Backpack creates a direct pathway between securities ownership and onchain distribution. This gives investors the flexibility to access both traditional securities infrastructure and blockchain-native markets from a single platform. ### Two Ways to Hold Securities Every eligible security on Backpack can be held in one of two forms. #### Traditional Securities on Backpack Real security entitlements governed under New York law (UCC Article 8), supported by established brokerage, clearing, custody, and transfer infrastructure, with real ownership rights including cash dividends, corporate actions, brokerage transfers, and applicable tax treaty benefits. #### Tokenized Securities Issued by Backpack Self-custodied tokenized securities on Solana with 24/7 trading, wallet-to-wallet transfers, DeFi compatibility. ### Moving Between the Two Forms The two forms are connected through a seamless, two-way door. Seamlessly convert traditional securities into tokenized securities and vice versa through Backpack Securities deposits and withdrawals. On/off-ramp securities between traditional brokerages and Solana. > See the [**Conversion Flow**](/exchange/backpack-securities/tokenized-securities/conversion-flow.md) page for how deposits and withdrawals work. ### Dividends and Corporate Actions Dividends and corporate actions are supported across both ownership models. * For securities held through Backpack Securities, cash dividends and corporate actions are processed through traditional brokerage infrastructure. * For tokenized securities, dividend payouts are automatically reinvested into additional tokenized shares, while applicable corporate actions are reflected through proportional token balance adjustments designed to maintain economic equivalence with the underlying security. ### Comparing the Two Ownership Models The table below summarizes how the two forms compare across key dimensions. | Category | Traditional Securities on Backpack | Tokenized Securities Issued by Backpack | | ------------------- | ------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------- | | On/off-ramp | Can be tokenized and withdrawn to Solana as a tokenized security | Can be redeemed 1:1 into the underlying real shares | | Brokerage Transfers | Available via ACATS- and DTCC-compatible brokerage infrastructure | Available after redemption into the corresponding security entitlement | | Dividends | Cash dividends, with applicable tax treaty withholding benefits where available | Dividend payouts are automatically reinvested into additional tokenized shares | | Corporate Actions | Supported through brokerage infrastructure, including stock splits, mergers, and certain spinoffs | Corporate actions are automatically reflected through tokenized share balance adjustments | | Ownership Form | UCC Article 8 security entitlement | Tokenized claim | | Legal Framework | New York law (UCC Article 8) | Claim on SPV holding the underlying assets | | Price Exposure | Direct ownership of the security | Anchored 1:1 via mint and redemption mechanism | | Where It Is Held | Backpack Securities account | Solana wallet | | Custody Model | Traditional brokerage infrastructure | Self-custody | | Accessibility | Backpack Securities brokerage accounts | Self-custody wallets | | Liquidity | Access to real U.S. market liquidity (NYSE & Nasdaq) | Solana DEXs and onchain liquidity | | Trading Hours | 24/5 | 24/7 | | Settlement | Traditional securities settlement infrastructure | Onchain settlement | | Wallet Transferable | No | Yes | | DeFi Compatible | No | Yes | > For more on ownership rights and the legal structure, see [Real Ownership and Legal Framework](https://support.backpack.exchange/exchange/backpack-securities/real-ownership-and-legal-framework). ### How Backpack Tokenized Securities Differ from Typical Tokenized Stocks Most tokenized stocks on the market stop at tracking the price. Tokenized securities issued by Backpack go further: each token is redeemable 1:1 for the real underlying security. | | Tokenized securities issued by Backpack | Typical tokenized stock | | ------------------------------- | ------------------------------------------------------------------------------------------------------ | --------------------------------------------------------------------------- | | What you hold | Token redeemable for a real share of the underlying security through Backpack Securities | Usually a contractual claim that tracks the price | | Dividends and corporate actions | Reflected onchain through rebasing designed to maintain economic equivalence with the underlying share | Varies by issuer; may be reflected through token mechanics or not supported | | Redemption | Redeemable for a real share of the underlying security through Backpack Securities | Often not available; settlement in cash only; fees may apply | | Trading hours | 24/7 on Solana | Varies by venue | | Where it works | Across Solana wallets and DeFi | Often limited to issuer or partner venues | *** *The descriptions provided herein are for informational purposes only. For details, please see the Backpack Securities Terms of Service, available in the* [*User Agreement*](https://support.backpack.exchange/legal/general-legal/user-agreement)*.* --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://support.backpack.exchange/exchange/backpack-securities/tokenized-securities.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. 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