xStocks are not available in the U.S. or to U.S. persons. Geo restrictions apply. Read Kraken's xStocks Risk Disclosure and the Base Prospectus and related Final Terms for more information.
How xStocks Are Backed
Explore what 1:1 backing means for xStocks, how underlying assets are held, and how to verify backing with Proof of Reserves.
Key Takeaways
- Every xStock is backed 1:1 by the corresponding underlying stock or ETF.
- The underlying assets are held through regulated infrastructure.
- xStocks uses a fully collateralized backing model rather than a synthetic structure.
- Proof of Reserves provides transparency into the backing of issued xStocks.
Every xStock is backed 1:1 by the corresponding underlying stock or ETF.
This means that for each xStock in circulation, a corresponding underlying asset is held through regulated infrastructure. The backing model is designed to ensure that each tokenized equity is fully collateralized by the asset it represents.
What does 1:1 backing mean?
A 1:1 backing model means there is a corresponding underlying stock or ETF for every xStock that has been issued.
For example, if one AAPLx is issued, one share of Apple is held as the underlying asset. This principle applies across all supported xStocks.
Unlike synthetic products that derive their value from derivatives or other financial instruments, xStocks are backed by the underlying assets they represent.
Why does backing matter?
Backing helps ensure that each xStock remains linked to the underlying publicly traded stock or ETF.
It provides transparency around how xStocks are issued and gives users confidence that tokenized equities are supported by real-world assets rather than created without corresponding collateral.
How is the backing managed?
The underlying assets are held through regulated financial infrastructure.
This infrastructure supports the issuance and management of xStocks and is designed to maintain the relationship between issued tokens and the underlying assets.
Additional information about the backing model and supporting infrastructure is available in the xStocks documentation.
How can users verify the backing?
xStocks publishes Proof of Reserves, allowing anyone to verify that issued xStocks are backed by the corresponding underlying assets.
Proof of Reserves provides an additional layer of transparency by making backing information publicly available.
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How IPO Allocations Work
Explore how IPO shares are allocated, why allocations vary, and how institutional and retail investors participate.
Why IPO Access Differs by Region
Understand why IPO access varies by country, how listing markets shape availability, and where xStocks fits in.
Important Information
xStocks are not available in the U.S. or to U.S. persons. Geo restrictions apply. Read Kraken's xStocks Risk Disclosure and the Base Prospectus and related Final Terms for more information. This content is partner enablement material, not investment advice. IPO-related content carries additional communication rules - see the brand kit before repurposing. In the EEA and most countries outside the US, IPO access on Kraken is via xStocks - tokenized securities issued by Backed Assets (JE) Limited pursuant to an EU-registered prospectus, providing price exposure only. xStocks are not equity and confer no voting or shareholder rights. Allocation is subject to underwriter decisions and is not guaranteed; any funds not allocated are returned. The value of investments may go down as well as up. Not available in the U.S. or to U.S. persons, or in the United Kingdom, Canada or Australia. Geo restrictions apply. xStocks are made available in the EEA by Payward Europe Digital Solutions (CY) Limited, regulated by CySEC (licence no. 342/17); and elsewhere by Payward Digital Solutions Ltd., regulated by the Bermuda Monetary Authority.