Backed Finance (xStocks)

At a glance

What it does

Backed holds a share, for example Tesla, with a third-party licensed custodian. It then issues a token, TSLAx in this case, that tracks the share's price one to one. Legally the token is a security issued by Backed under Switzerland's DLT law, with a prospectus approved by Liechtenstein's financial regulator, the FMA. The holder has a claim on Backed backed by the share, not a place in Tesla's shareholder register.

A primary market is where new tokens are created and redeemed directly with the issuer. A secondary market is where holders trade existing tokens with each other. Backed's primary market is open only to professional clients, with a 100,000 USD minimum and KYC at the issuer. Everyone else buys and sells on the secondary market: on Kraken, Bybit and other exchanges, or on Solana exchanges such as Jupiter and Raydium. Backed does not serve US or UK persons.

xStocks launched in June 2025 with Kraken and Bybit as the first distributors. By the time Kraken announced the acquisition in December 2025, it said xStocks had passed 10 bn USD of combined exchange and on-chain trading volume.

How it is different

xStocks are plain tokens that anyone can hold once they own one. Unlike fund tokens such as BUIDL, they carry no allow-list for secondary holders, so they move freely between wallets and into DeFi protocols. That openness is why they spread quickly across exchanges and chains, and why they feed perpetual futures and lending markets.

The design puts one firm in the middle. Backed is the issuer, the counterparty and the sole door to redemption for every exchange that lists xStocks. Chainlink runs a proof-of-reserve feed for Backed's tokens, which lets anyone check on-chain that the issuer reports holding the shares.

Since the acquisition, the issuer belongs to one of the exchanges that distributes it. Kraken says this gives it control over issuance, trading and settlement across its products.

Where it fits

Tokenized stocks and Robinhood Chain compares xStocks with Ondo's and Robinhood's stock tokens. What a tokenized real-world asset actually is explains why a tracker token is a claim on the issuer rather than a share. Getting prices on-chain covers proof of reserve. RWAs in DeFi follows stock tokens into lending and perpetual markets. Related profiles: Ondo, Robinhood and Chainlink.

Risks and open questions

The intermediary can fail to deliver. In June 2026 several exchanges had to cancel their tokenized SpaceX offerings and refund more than 1 bn USD of orders, because xStocks, their shared issuer, could not secure an allocation in the oversubscribed IPO. Without the underlying share, no token exists, however many orders come in.

Retail holders cannot redeem. They depend on exchange liquidity and on market makers who can redeem with Backed. If secondary markets thin out, the token can trade away from the share price.

Holders get economic exposure, not shareholder rights. Voting and direct claims on the company stay with the custodian's position.

Ownership adds a conflict. The issuer now belongs to an exchange that competes with other venues listing the same tokens.

What to watch next

• Kraken's integration: whether xStocks stay open to rival exchanges after the acquisition decides if they remain an industry product or become a Kraken product.
• SEC treatment of third-party stock tokens: the SEC's January 2026 statement separates issuer-sponsored from third-party tokenized securities, and any rule that follows sets how far products like xStocks can reach.
• New chains and markets: Kraken plans to add blockchains and markets, and each one tests the issuer's capacity to mint and redeem.
• Competition from issuer-sponsored shares: companies issuing their own tokenized shares would remove the need for a middle issuer.