Talos, the institutional digital asset infrastructure provider, has published research examining how the structure of a tokenized equity instrument determines its legal standing, liquidity profile and trading behaviour, a distinction it argues is now more important than whether a stock is available onchain at all.
The analysis, released as part of Talos’s weekly State of the Network series, maps three broad categories of tokenized stock exposure: issuer-native equity, custodial wrapped tokens and derivative-based synthetic exposure. Each category grants the holder a materially different claim on the underlying company, and the report argues that conflating them understates the structural risk involved.
The spectrum of ownership
At one end of the spectrum, issuer-native equity represents a registered security entitlement and preserves shareholder rights including voting and dividend participation. Custodial wrapped tokens sit in the middle: they are backed by shares held by a custodian but the holder’s legal claim runs to the custodian rather than directly to the issuer. Synthetic exposure through perpetual futures offers the greatest accessibility and capital efficiency, but carries no direct claim on the underlying asset and no shareholder rights whatsoever.
Using Nvidia as a case study, the report illustrates how three nominally equivalent instruments, Backed Finance‘s NVDAx, Ondo Finance‘s NVDAon and Nvidia perpetual futures, can exhibit pricing divergence, fragmented liquidity pools and distinct trading patterns despite tracking the same underlying company. The structural differences are not cosmetic; they produce measurable differences in execution quality and risk profile.
The volume data in the report underscores how the market has resolved the trade-off so far. Nvidia perpetual futures recorded approximately $6.3billion in trading volume over the period studied, more than 40 times the combined volume of tokenized spot products. That ratio reflects institutional and retail demand for simple, liquid price exposure without the operational overhead of custody arrangements, redemption windows and cross-border settlement.
Tanay Ved, senior research associate at Talos, said: “For market participants, the key question is no longer whether a stock is available onchain, but what kind of claim a given instrument represents, and how that structure shapes its liquidity, pricing, and trading dynamics.”
Regulatory and market context
The structural taxonomy matters because regulation has not yet settled on uniform treatment. In the United States, the SEC continues to work through how tokenized securities fit within existing broker-dealer and transfer-agent frameworks. The EU’s DLT Pilot Regime, which provides a sandbox for blockchain-based settlement of transferable securities, draws a distinction between financial instruments and other digital representations, a distinction that maps closely onto the Talos spectrum. MiCA, which came into full effect in December 2024, covers asset-referenced tokens but does not comprehensively address equity tokenization, leaving a gap that national competent authorities are filling unevenly.
The findings are also relevant to custody and prime brokerage discussions. Several large custodians are building or extending services for tokenized securities, but the legal certainty of the underlying claim remains jurisdiction-specific. As more asset managers look at onchain equity exposure, the question of which layer of the stack they actually own will become a due diligence requirement rather than a secondary consideration.
Talos positions itself as infrastructure neutral across the spectrum, providing trading and data systems that connect institutions to exchanges, over-the-counter desks, prime brokers and custodians through a single interface. The firm serves banks and asset managers but does not disclose a client list.
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