The short version
A company holds real shares, say Apple shares, with a custodian. For each share it holds, it issues one token on a blockchain. The token's price follows the share's price. You can hold the token in your own wallet, send it, or sell it, like any other token.
You get the price of the share without a brokerage account. You don't become a shareholder of Apple: you hold a claim on the issuer, which holds the share.
xStocks, the ones Sproot buys
On Solana the best-known tokenized stocks are xStocks, issued by Backed Assets (JE) Limited. Each one is a tracker certificate: a token that follows one share or fund, backed one to one by that share or fund held in custody. The name ends in an x: AAPLx for Apple, SPYx for the S&P 500 fund, GLDx for a gold fund.
Anyone can check the token itself on-chain: who issued it, how many exist, and what rules are built into it. Each Sproot asset page links its token so you can look.
What you get, and what you don't
- You get
-
- The price of the share, up and down.
- Dividends, reinvested. On Solana the issuer raises a multiplier after each dividend, net of withholding tax, and the amount your wallet shows grows with it.
- Small amounts. A token splits into tiny pieces, so $10 of Apple is possible.
- The token in your own wallet, any day of the week.
- You don't get
-
- A vote at the company's shareholder meetings.
- A share registered in your name.
- Access everywhere: residents of some countries can't buy them at all.
Who they are for
People the usual route doesn't serve. Expats whose brokerage closed their account when they moved countries. People in a country where a cheap index fund isn't on offer. People who already hold their savings in a wallet and want some of it in the stock market.
They are not for everyone. If you live in the United States, the United Kingdom, Australia or Canada, Sproot doesn't offer them to you, and a local brokerage is the simpler road anyway.
What can go wrong
- The market. The share can fall, and the token falls with it.
- The issuer. You rely on the issuer and its custodian actually holding the shares. If either fails, the token can be worth less than the share.
- The token's rules. xStocks are built so the issuer can pause transfers and move tokens. If it does, your token can be frozen in your wallet or taken out of it.
- Market hours. The token trades around the clock, but the share trades on US market hours. Outside them the token's price can drift from the last close.
- The rules can change. Tokenized securities are new, and where they may be sold is still moving.
How Sproot uses them
Sproot is a monthly plan, not a place to trade. You pick an amount and a mix once; on the same day every month Sproot buys the tokens for you, and they land in your own wallet. The stocks on offer today:
Gold
S&P 500
Tesla
Nvidia
Apple