In less than two years, the market for tokenized equities has experienced massive growth, climbing from $32M to $3B+. These digital assets provide investors with continuous 24/7 trading, direct 1:1 custody, and a highly accessible entry point starting at just $5. We are now even seeing on-chain stocks such as AGPU available on Binance.

The underlying structure is quite simple. Every backed token is mapped on a strict one-to-one basis to a physical share safely managed by a regulated custodian. Major trading venues utilize a specific sequence to operate this system. The process begins by buying the traditional share and holding it securely in custody. A digital token is then minted to represent that equity, which allows it to be traded freely on the market. Finally, when a user requests a redemption, the corresponding token is permanently burned.

Continue reading to explore exactly how this innovative process works and to find out who is leading the industry.