💡Frequently Asked Questions

xStocks are not marketed, offered, or solicited in the United States or in any other prohibited jurisdiction. The information provided does not constitute an offer or solicitation to buy or sell any financial product directly from us or any of our partners. Investing in xStocks involves risk. Backed does not provide investment advice, and individual investors are encouraged to seek professional independent advice before any investment in xStocks. For a full list of prohibited and restricted countries and review of legal documentation, please visit 
https://www.assets.backed.fi/legal-documentation.

What are xStocks?

xStocks are a line of tokenized stocks and ETFs by Backed. They provide exposure to the value of stocks onchain and are 1 to 1 backed by the underlying security, which is held in regulated custodian banks and brokers using a bankruptcy remote structure.

Where can I buy xStocks?

For a list of official partners, check the Products page. xStocks can also be minted and redeemed directly with Backed by eligible users or purchased on secondary markets.

Are xStocks freely transferable?

Yes, xStocks are issued as tokens following Token2022 or ERC-20 token standards. xStocks are freely transferable tokens.

How are xStocks structured?

xStocks were designed as freely-transferrable tracker certificates with the blockchain as the primary ledger in which ownership is defined and recorded.

Each xStock stands for a different underlying asset and has its own ISIN. The underlying asset serves as collateral to the xStocks token, giving price exposure and a claim to the value of the underlying, but not the legal rights of the collateral itself. This means the tokens can be redeemed with Backed for the market price of the underlying asset but not for the asset itself.

Are dividends distributed? How are they distributed?

Yes, through rebasing tokens. Any dividends (net of tax) are reinvested into the underlying asset, and this is added to the collateral accounts, creating an overcollateralization. A multiplier is then applied to the tokens. Please see our dedicated page on dividends technical implementation: Dividends & Stock Splits Technical Overview

How do xStocks operate during market off-hours?

xStocks are issued as tokens following Token2022 or ERC-20 token standards, and can be traded on secondary markets 24/7 like any other token. Issuance and redemption by minters and redeemers are limited to business days when the US market is open, normally 24/5.

What is the process for determining the price of xStocks?

xStocks are 1 to 1 backed by the underlying security and can be redeemed for the underlying value by onboarded entities and eligible users. Backed does not directly control the pricing of xStocks on the secondary market, and different venues may have different fees, spreads, or other mechanisms which may be different from Backed’s primary redemption process.

How do you transition from off market to market hours pricing?

xStocks can be minted and redeemed 24/5 by users onboarded by Backed. In the secondary market, different exchanges and venues have different mechanisms to account for off market trading hours, such as employing higher spreads to cover risk, which is similar to how traditional brokers work in pre-market and overnight markets.