Introducing Tokenized GLXY

Key Information

• Galaxy has partnered with Superstate to allow for tokenization of its Class A Common Stock on the Solana blockchain.

• Superstate is Galaxy’s digital transfer agent for the tokenized shares.

• Onchain shares of GLXY are actual SEC-registered Galaxy Digital Class A Common Stock that confer all the same legal and economic rights as our traditionally formatted shares.

• Those who onboard with Superstate can hold (in self-custody), send and receive onchain shares of GLXY.

• Galaxy has not yet enabled AMM-based trading of its onchain shares, though it is possible to transfer GLXY bilaterally between allowlisted entities.

• Galaxy shares’ Contract Address on Solana: 2HehXG149TXuVptQhbiWAWDjbbuCsXSAtLTB5wc2aajK

  • Any tokens from other smart contract addresses that claim to be onchain shares of GLXY stock, or true issuances from Galaxy Digital, are fraudulent.

• Galaxy Research created this Dune dashboard to track supply of onchain GLXY: https://dune.com/glxyresearch_team/glxy-class-a-common-stock-token

Introduction

Today, Galaxy announced the tokenization of GLXY Class A Common Stock – the first time in history that a Nasdaq-listed U.S. equity security has been tokenized on a public blockchain.

Galaxy has enabled existing shareholders of its SEC-registered Class A common equity to move their shares from traditional format into onchain versions on the Solana blockchain. By creating a “bridge” between traditional markets and onchain markets, Galaxy has enabled its shareholders to represent their GLXY holdings in tokenized format. When you own these tokenized shares of Galaxy, your tokens are real shares in the company. These are not “wrappers”; they are actual onchain shares. They confer all the same financial and legal rights as our existing public shares, because they are our existing public shares. This is the first time in history that shares of a publicly listed U.S. equity are available on a major public blockchain.

We accomplished this with help from our friends at Superstate, an SEC-registered transfer agent and a leading provider of tokenization services and onchain operations. (Note, Galaxy Ventures is an investor in Superstate).

Persons who complete onboarding with Superstate can hold their shares (in self-custody) and transfer them to addresses on the allowlist. As such, although AMM trading has not yet been enabled, it is possible to transfer GLXY bilaterally between allowlisted entities.

This is just the first step in what we expect will become a capital markets revolution. The Chairman of the SEC has stated that the regulator will “create rational and workable rules of the road” for decentralized systems, including AMMs, within the securities markets. Superstate and Galaxy are both actively engaged with the SEC to help define a model for compliant AMM trading of public equities and we are confident that clear rules will soon emerge.

Galaxy has a demonstrated history of being on the forefront of innovation in finance. We remain committed to continuing to work with key regulators and stakeholders in the industry to advance Galaxy’s long-standing, core mission: building a faster, more efficient, more inclusive, and safer method of value transfer, storage, and creation for the global economy—and tokenized equities are that next step.

How Did We Get Here? Tokenization's History

Humans love to interact directly, bilaterally, peer-to-peer. Direct relationships are our preferred, natural state. But as organizations, systems, and markets scale, these direct connections tend to break down and have often given way to centralized governments, institutions, intermediaries, and organizations. Across history, the story has been the same in most forms of human organization, from local to national politics, production and supply chains, money and markets. Centralization breeds efficiency at the expense of autonomy. And the history of U.S. capital markets has been no exception.

In the late 1960s, U.S. capital markets were booming and market infrastructure couldn’t keep up, leading to the creation of the centralized stock clearing and settlement system we have today. SEC Chairman Paul Atkins described one of the most infamous examples of this breakdown and resulting centralization in his seminal July 31, 2025 speech announcing the Commission’s Project Crypto.

Securities were lost or stolen. Fails ballooned. And many thinly capitalized broker-dealers were caught by the whiplash of scuttled transactions. In desperation, trading hours were reduced and exchanges eventually closed on Wednesdays to allow firms to process the mountains of certificates.

The breakdown over an antiquated system was described by the SEC chairman at the time as “the most prolonged and severe crisis in the securities industry in 40 years... Firms failed. Investor confidence plummeted.” And very much to its credit, the SEC was proactive in remedying the so-called “Paperwork Crisis.” The agency helped market participants to develop the Depository Trust and Clearing Corporation, which would transform how securities were held and traded. Instead of shuffling paper certificates from customer to broker, broker to broker, and broker to customer, title to shares could now be transferred through computerized ledger entries. The certificates themselves were immobilized, stored securely in vaults, as ownership moved electronically, laying the foundation for the modern clearing and settlement system that has continued to this day.

— SEC Chairman Paul Atkins, Jul. 31, 2025

During the booming economy of the 1960s, the direct settlement process relied upon by Wall Street broke down in the face of soaring volumes. In response to this “Paperwork Crisis,” U.S. capital markets abandoned the peer-to-peer settlement process and opted to create centralized intermediation (which would eventually be called the Depository Trust & Clearing Corporation, “DTCC”). This centralized settlement process served us well, allowing U.S. capital markets to grow dramatically over the decades. Had there been a method to avoid the complications of the “Paperwork Crisis” while still maintaining a peer-to-peer process, it’s possible that would have been the preferred solution. In the 1960s, there was no way to scale the growing settlement and recordkeeping needs of Wall Street without the use of a centralized intermediary. But that is no longer the case.

For more than a decade, technologists and financial professionals alike have recognized the transparency and efficiency blockchains provide to the ownership and transfer of assets. The DTCC itself saw the market benefits of and potential for disruption by decentralized, public blockchains as early as 2016, when it published an important whitepaper titled “Embracing Disruption: Tapping the Potential of Distributed Ledgers to Improve the Post-Trade Landscape.”

Over the years, dozens of companies have worked to tokenize real-world assets, including real estate, commodities, physical collectibles, and artwork, mostly with limited adoption. In some cases, headwinds for this class of tokenization attempts have been regulatory, but in most instances the market has failed to bridge the gap between the physical nature of the assets and the intangible nature of the blockchain, with tokenized gold being a notable exception. This is effectively a technological impediment.

In contrast, tokenization efforts in which the underlying assets are intangible or even digital-first have seen much wider adoption. Stablecoins are a breakout hit with wide product market fit, and they are a form of tokenization. Today, they have shown three clear uses that continue to see strong growth: cross-border payments, overseas dollar access in emerging economies, and as a trading pair for bitcoin, ether, and other digital assets. Some categories of tokenization beyond stablecoins have also seen strong initial growth, particularly private credit and money market funds. The market now tends to refer to this onchain tokenization sector as Real-World Assets (RWA); these assets have still only reached around $25bn in supply, less than a 1/10th of the stablecoin supply.

Tokenizing Securities

The gating factor for broad adoption of tokenized securities has never been technical; it has been regulatory. Tokenizing securities is not a technological leap; it is a change in record-keeping. Unlike gold, art, or real estate—where a token must be anchored to a physical asset through custody and provenance—most securities are already dematerialized and held digitally in book-entry form. In the U.S., positions sit within the DTCC indirect holding system (with DTC as central depository), and beneficial ownership is tracked through broker-dealers and transfer agents. This system is a “centralized ledger.” “Tokenization” here simply migrates entries from a centralized ledger to a decentralized and distributed ledger; the underlying rights and obligations remain the same.

Regulatory Headwinds to Equity Tokenization

Historically, markets regulators around the world, most notably the U.S. Securities and Exchange Commission (SEC), showed little initiative to create a regulatory environment that allowed for the tokenization of equity securities. As a result, startups have struggled to offer actionable public blockchain services to traditional capital markets; traditional capital markets firms, at least those willing to experiment, have toiled in the world of permissioned blockchains; and neither has been able to meaningfully cross the chasm.

Complex rules regarding issuance, recordkeeping, custody, settlement, reporting, brokerage, and exchange have mostly not been updated to allow for trading of equity securities in a tokenized format. The SEC under former Chair Gary Gensler argued that existing securities rules were sufficient for issuers, intermediaries, and exchanges alike, without acknowledging why “come in and register” was not tenable. In short, the old rules worked well for the legacy financial system but didn't cleanly fit for the capabilities inherent in blockchain technology. This impasse led to two significant outcomes:

• The stagnation of tokenization due to lack of regulatory pathways in the U.S. While stablecoin usage continued to proliferate as a medium of exchange and settlement asset, the tokenization push that began in earnest in 2017 and 2018 failed to advance during the intervening years. Both crypto-native and traditional firms were dissuaded from prioritizing technological and operational innovations. Policy decisions from regulators meant that complicated regulatory questions that should have been nonpartisan were not addressed – such as whether or how broker-dealers can interact with both security and non-security tokens.

• The market proceeded with inefficient tokenization structures that avoided U.S. regulatory overhead. Despite stagnation or backsliding in regulatory clarity for crypto, demand from the market for novel tokenization structures did not abate. Yield-bearing stablecoins, SPV-like structures for tokenized equity exposure, and teams building trading applications and other mechanisms all moved offshore. Tokenized money market funds launched without allowing token transfers. To the extent that U.S. equity securities were tokenized, these tokens existed in a wrapped form in which the owner of the token lacked any specific equity claim on the underlying company’s stock, or they were relegated to private platforms that lack the transparency and openness of permissionless blockchains. The industry hunted these structures and, like water on pavement, found some that were possible but none that were preferable.

Technology and Regulation Join Forces

Despite years of headwinds, blockchain technologies and operational innovations have progressed to a point where security tokens can live on public, permissionless blockchains while still adhering to the principles behind securities and anti-money-laundering laws. And a regulatory environment previously defined by hostility and indifference is now characterized by supportiveness and engagement. In 2025, the SEC and the Presidential Working Group on Digital Asset Markets have made clear that advancing the adoption of public blockchains in America is a national priority. Chairman Atkins and Commissioner Peirce have repeatedly expounded on the benefits that blockchain innovation can bring to traditional capital markets and have committed the Commission to examine and alter existing rules or issue exemptions to allow for innovation in the area of tokenized equities.

Crucially, the SEC has begun soliciting feedback from stakeholders on how to modernize its rules to account for blockchain tokens, with a particular focus on broker-dealers, issuers, secondary markets, custody, and lending. This is an enormous task, particularly given that prior SEC leadership neglected to meaningfully work on these items. While this task of providing the new rules of the road for the industry looms large for regulators, Galaxy will continue to be a trusted resource for regulators and stakeholders alike with a shared goal: encouraging the innovation that American financial markets are known for and ensuring clear guidelines that maintain the trust and safety that are a cornerstone of our economy.

Sometimes change happens gradually and then all at once. In our view, this past decade of regulatory ambiguity has been gradual (a bit of “nothing ever happens”), but we are now at the “all at once” stage. Regulators now have an opportunity in the coming weeks and months to create the rules of the road for the financial system of the future. By tokenizing GLXY with Superstate today, we demonstrate our commitment to innovate relentlessly—in partnership with regulators—and drive towards the economic future that we have envisioned since our founding.

Tokenizing Galaxy Stock

This brings us to the tokenization of $GLXY, which currently trades on the Nasdaq. While significant questions remain regarding how tokenized shares of U.S. public companies may trade onchain, we have developed a process and structure that enables the real tokenization of our existing GLXY shares—not on a private permissioned blockchain, not through an SPV wrapper, but as the actual shares themselves.

We have structured our equity tokenization efforts in strict compliance with existing U.S. securities laws, which impose certain limitations. We are not cutting corners and that means we must innovate carefully and responsibly. We have opened a bridge between traditional capital markets and permissionless blockchains that allows any shareholder capable of onboarding with Superstate to change the format of their shares into tokenized form on the Solana blockchain.

We have not yet enabled direct trading of these tokens within automated market makers (AMMs) or other fully permissionless decentralized exchange mechanisms on Solana, as the regulatory treatment of such trading remains uncertain. Our intention, as clearer guidance emerges from U.S. securities regulators, is to progressively expand trading venues—ultimately enabling these tokenized shares to transact directly on AMMs and other forms of decentralized exchanges. Importantly, until these more durable, transparent, persistent secondary market venues are available, there is no guarantee that onchain shares of GLXY will have any onchain liquidity, though it is possible to trade GLXY bilaterally between addresses that have onboarded with Superstate. We will consider technology, transparency, decentralization, and regulatory frameworks as we assess adding support for other blockchains or trading venues.

The Securities and Exchange Commission has also not yet adopted or clarified its rules sufficiently to allow brokers and dealers to interact with tokens of any type, securities or otherwise. Thus, we are not aware of any U.S. brokerages that are available to assist onchain owners of GLXY with crucial operations or investment decisions. It’s a shame that the SEC did not engage in this rulemaking over the last four years, but the current SEC is soliciting feedback on how to enable brokers and dealers to operate onchain. Note that when you hold or trade onchain GLXY, there is no brokerage tracking your cost basis.

Long term, we believe that onchain equity capital markets will become as featureful if not more so than traditional markets, and we are working closely with key stakeholders including the SEC to make it happen.

Transforming Traditional GLXY into Tokenized GLXY

Shareholders of Galaxy Class A Common Stock can change existing shares into tokenized format. While we acknowledge that today’s process to convert traditional shares into tokenized shares is somewhat cumbersome, we believe both that 1) the bridge between traditional finance and decentralized finance will simplify over time and 2) most who desire to utilize onchain GLXY equity will never need to actually participate in the process to transform from or to the traditional format.

As described in the graphic above, to create tokenized GLXY from traditional GLXY requires the following steps:

0. Onboard with Superstate by visiting Superstate.com/Register. Yes, to hold or trade Galaxy’s Class A Common Stock in tokenized format, you must perform know-your-customer identity verification with our digital transfer agent. You can complete this step at any time, even if you do not yet own Galaxy stock. (Approximate time: ~10 minutes to signup, ~2 hours to be verified).

In order to reformat existing GLXY stock into tokenized shares, you must already own GLXY stock.

1. Instruct your brokerage firm to perform a DRS transfer to Galaxy’s transfer agent. Galaxy uses Equiniti (“EQ”) as its primary transfer agent. Transfer agents are SEC-registered entities that keep and maintain the official record of who owns each of our shares, carry out day-to-day tasks that track and facilitate the change of share ownership, calculate and pay cash dividends, handle stock splits, mail and deliver proxy materials, and other administrative tasks. Asking your brokerage to transfer shares of a stock to that stock’s transfer agent (i.e., move to the direct registration system, or “DRS”) may sound tricky, but both authors of this paper accomplished the task in just a few minutes simply by using live web-chat with Fidelity and Charles Schwab, respectively. See the image below. (Approximate Time: ~10 minutes).

Once processed, your shares will move from your brokerage firm’s account at the Depository Trust Company (DTC) into your name on Galaxy’s books and records at our transfer agent EQ. You still own these shares, but now it is Galaxy and its transfer agent that record your ownership. (Approximate time: ~3 business days).

2. Instruct Equiniti to move your shares into Superstate’s Onchain Eligible Shares account. To accomplish this, email [email protected] and explain that you’ve used DRS to transfer Galaxy shares to EQ and you would like to tokenize them.Galaxy’s investor relations team will provide you with your EQ account number and a simple form to complete and return. (Approximate processing time: ~4 hours).

3. Superstate will then mint 1 GLXY token per share, as a direct, legitimate version of your shares. This requires that you have successfully onboarded with Superstate and that you’ve added a Solana address in your Superstate account profile. On the Superstate website, you can then press a “Tokenize” button which will mint 1 GLXY token per share. (Approximate time: ~10 minutes).

4. Superstate will deliver onchain GLXY shares (tokens) to your Solana wallet and you are now free to store them in self-custody, or send, receive, or transfer them to/from other onboarded addresses.

5. To reformat GLXY tokens back to traditional format, perform these steps in reverse. Contact Superstate and request that they move your shares back to EQ, then ask EQ to move them back to your brokerage account. Crucially, this can be done by any GLXY equity token holder who has onboarded with Superstate, regardless of whether they were the investor who originally created the shares.

Note that this process specifically describes the tokenization and de-tokenization process to connect traditional Nasdaq-listed Galaxy shares to tokenized onchain GLXY shares. If you just want to buy already existing onchain GLXY shares, you need only onboard with Superstate at Superstate.com/Register and purchase onchain GLXY shares from an existing holder. As more GLXY shares are tokenized, we expect onchain liquidity to emerge such that most onchain shareholders never need to utilize this process of creation and redemption. Longer term, although this creation and redemption process will always be available to all shareholders regardless of size or sophistication, we expect this process to mostly be utilized by sophisticated trading firms.

Our Approach vs. 'Wrapped' Equity Structures

We feel strongly that tokenized stocks must be tokens that provide actual ownership in the underlying equity security. As discussed above, for reasons both technological and regulatory, this has not yet developed in any meaningful way in the United States. The emergence and adoption of public blockchains should not undo decades of advancement in U.S. capital markets—it should supplement and enhance it.

We believe that tokenized equity wrappers sever the relationship between issuer and shareholder to the detriment of both. If you buy a share in a company, you should retain all economic and legal rights associated with owning shares in that company, regardless of the form those shares take. Given the demand to utilize the permissionless, composable, efficient, and transparent nature of public blockchains for things like equity securities, it’s understandable that many have created structures that avoid the U.S. securities laws. Nonetheless, we do not view wrapped equity tokens as viable or preferable long-term, and thus have structured our entire inquisition into this area around how to get real shares onto the blockchain.

Why We Picked Solana

Galaxy chose Solana as the first public blockchain for its tokenized shares for several reasons.

• Solana is a decentralized, layer-1 blockchain. We believe that tokenized equities must trade on significantly decentralized public, layer 1 blockchains, rather than layer-2s in which individual companies or foundations could unilaterally control important features like transaction ordering, transaction fees, or settlement finality. For example, while Ethereum rollups today may have unilateral exit capabilities (assuming the assets in question exist on both the L2 and the L1), some can be functionally controlled by single sequencers wholly operated by single companies or foundations. While those operators may be altruistic and even seek to protect onchain shareholders from things like exorbitant fees or delayed settlement, rollup operators nonetheless possess, in theory, a unilateral, centralized ability to take (or fail to take) actions that could harm onchain shareholders, either through negligence or malice. Furthermore, the capability to unilaterally exit an L2 relies upon the asset in question being available on the connected L1. Thus, to the extent that onchain securities are available on layer-2 rollups, we believe they should primarily be issued on layer 1 blockchains to preserve the ability of layer-2 users to unilaterally exit the rollup. We do plan to support tokenized GLXY shares on Ethereum L1 in the future and we will continue to evaluate the appropriateness of other blockchains, including Ethereum L2s.

• Solana is designed to be the “Nasdaq of blockchains.” Its high-speed settlement, local fee markets, efficient networking stack, and nimble developer base make it a great vessel for leading the integration of traditional and decentralized capital markets. While these updates have largely focused on increasing Solana’s bandwidth and reducing latency, looking forward Solana developers are introducing additional updates that improve market microstructures on Solana. Under its “Internet Capital Markets” framework, Solana developers intend to add asynchronous program execution and multiple concurrent validating leaders, which together add significant parallelization, as well as application-controlled execution, giving much more flexible design space for applications (especially market applications). We also expect that Solana will be the first adopter of DoubleZero, a new global fiber network tailor-made for high-speed blockchain settlement, which will further solidify Solana as a genuine competitor to the traditional financial system. Finally, the rollout of updates to Solana’s existing validator client, Anza, and the introduction of a new validator client, Firedancer, will further enhance network performance and resiliency.

• Solana has the most DEX activity. In terms of on-chain spot trading activity, Solana has led in volume every month since October 2024. While Solana has not led in onchain credit (perhaps because its high staking APY provides a competitive substitute) or in onchain perpetuals, Solana has established itself as the go-to layer-1 blockchain for spot trading with high volume, quick settlement, and low fee trading. Backed by a large retail user base, Solana has also become one of the most accessible networks in crypto, spurring the development of broad, frictionless on-ramping solutions.

Securities, AMMs, and Regulatory Questions

When Will Onchain $GLXY Trade on DEXs?

The SEC is grappling with whether or how decentralized exchanges on public blockchains can or should be regulated. Securities laws are largely designed to protect investors from the opacity, conflicts of interest, and arbitrary powers of centralized intermediaries like brokers, dealers, and exchanges. Because some of these entities can unilaterally control user funds, make mistakes on trades, face conflicts between their own interests and those of customers, or even act maliciously, they face significant oversight, supervision, and regulatory requirements. In our view, the decentralized, automated, and transparent nature of public blockchains and decentralized finance applications largely obviates the need for many of these requirements. Other laws and regulations may need to be adapted to account for a new reality where the roles of intermediaries, issuers, and investors look different than they do today. We do not yet know when onchain $GLXY will be available inside AMMs or other forms of decentralized exchanges, but we are working diligently with stakeholders, including the SEC, to make it happen.

DEXs Are Not "Exchanges" and Should Not Be Regulated As Them

Decentralized exchanges (“DEXs”) fundamentally differ from traditional exchanges regulated under the Securities Exchange Act of 1934 (“Exchange Act”) and we believe should not be classified as “exchanges” within the statutory framework of the Act.

First, Section 3(a)(1) of the Exchange Act defines an “exchange” as an “organization, association, or group of persons providing a marketplace or facilities for bringing together purchasers and sellers of securities.” Here, the words “organization, association, or group of persons” should be interpreted as applying only to persons and, moreover, does not include or contemplate computer programs. A DEX is not an “organization of persons” (it’s not an organization at all); it’s not an “association of persons” (it’s not an association at all); and it’s certainly not a group of persons.

This statutory definition explicitly presupposes a centralized, identifiable entity with discretionary control over market operations. In stark contrast, many decentralized exchanges that operate autonomously via self-executing smart contracts on decentralized blockchain networks specifically lack any central organization exerting governance control. Consequently, as simply a matter of statutory interpretation, we don’t believe DEXs meet the definition of “exchange” under the Exchange Act.

Second, traditional exchanges possess and exercise discretionary oversight, actively managing market operations, setting membership standards, enforcing regulatory compliance and, if necessary, intervening to adjust or correct trades. Autonomous DEXs inherently lack the capacity for subjective intervention or discretionary operational control, as transactions occur deterministically through transparent, pre-programmed rules embedded in immutable smart contracts that, once executed, the DEX has no ability to alter. The fundamental absence of discretionary authority distinguishes autonomous DEXs significantly from traditional exchanges regulated by the Exchange Act.

Third, the Exchange Act’s regulatory framework imposes upon exchanges specific regulatory roles, such as membership vetting, compliance oversight, and disciplinary enforcement, assuming they are centralized entities capable of performing these functions. Autonomous DEXs structurally preclude such functions, given their lack of centralized governance or identifiable regulatory entities. Transactions and market functions are automated, transparent, and non-discretionary, making the centralized regulatory roles envisioned by the Exchange Act both unnecessary and impossible for DEXs.

Fourth, legislative intent behind the Exchange Act aims at mitigating risks of manipulation, fraud, conflicts of interest, information asymmetries, and other abuses attributable to centralized intermediaries. Autonomous DEXs inherently eliminate these risks through decentralized transparency, automated execution, and immutable auditability. The absence of discretionary human intervention effectively addresses the regulatory concerns targeted by the Exchange Act, rendering its application to DEXs unnecessary and misaligned with the original legislative purpose.

Finally, classifying autonomous DEXs as exchanges under the Exchange Act would undermine policy objectives promoting innovation and market efficiency. Traditional regulatory frameworks designed for centralized entities would impose unnecessary regulatory burdens that are impossible for autonomous DEXs to satisfy, and would therefore stifle technological advancement inherent in decentralized finance without providing corresponding regulatory benefits.

Therefore, decentralized exchanges, due to their autonomous, decentralized, transparent and deterministic operational nature, do not satisfy the statutory definition or underlying policy rationale of “exchanges” under the Exchange Act, and accordingly, should be excluded from its regulatory framework.

Principles for Autonomy in AMMs

We feel strongly that decentralized, transparent AMMs should not need to register as exchanges or alternative trading systems (ATS), and that many may also be incapable of doing so due to the lack of any identifiable operating entity. The reason for this is fairly straightforward: autonomous, self-executing programs whose source code is available for all to see do not require regulation that, in its existing form, is tailored for regulating persons controlling centralized exchanges.

From a regulatory standpoint then, if autonomy excludes a DEX from the application of Exchange Act rules, it is essential to establish a principled and administrable framework for determining what qualifies as an autonomous system, as compared to a non-autonomous venue such as Nasdaq.

Consistent with other regulatory analyses, we believe that the following factors indicate autonomy in decentralized exchanges:

1. Absence of Discretionary Control.

   The platform must operate according to pre-programmed, deterministic rules embedded in self-executing smart contracts. No entity, individual, or group of individuals, including the platform developers, should possess the capability to unilaterally modify, halt, or influence transaction settlement, execution, matching, or the functioning of the underlying code once deployed, except under previously disclosed, transparently documented governance processes requiring broad decentralized consensus.

2. Transparency and Verifiability.

   All operational logic, including transaction execution, matching algorithms, liquidity provisions, settlement finality, and the governance processes themselves, must be fully open source, transparent, auditable, and publicly verifiable at all times. Transparency includes full public access to the codebase and open-source availability, ensuring external validation of the absence of undisclosed discretionary controls.

3. Self-Executing and Deterministic Settlement.

   The platform must execute all transactions autonomously without human intervention or discretion. Once initiated, transactions via the protocol cannot be blocked, censored, or reversed by any identifiable central intermediary, administrator, or other party.

4. Neutrality and Non-Discriminatory Access.

   The platform must provide open, neutral, and broad access to all eligible participants. There must be no preferential treatment granted by any central or identifiable administrative body.

5. Decentralized Operational Control.

   Operational functionality must be distributed across a network of independent participants who each individually lack the capacity to dictate, veto, or otherwise control outcomes on the platform. Governance and changes to protocol operation, if any, must demonstrably be in the hands of a broadly distributed community rather than a centralized management structure or identifiable control persons.

The term “decentralized exchange” is a misnomer, or at least risks conflating a function with a regulatory status. Despite the name, a DEX is not, in the legal sense, an “exchange” as contemplated under the Exchange Act. Instead, it is better understood as an autonomous escrow mechanism that facilitates bilateral, peer-to-peer transactions between willing counterparties.

This distinction matters because U.S. securities laws do not prohibit consensual, non-fraudulent, direct transactions of securities between individuals. Intermediaries are regulated—but intermediaries are not required. Two parties who meet directly and agree to trade their own securities are free to do so without triggering the registration and operational requirements of the Exchange Act, so long as they are not themselves “operating” an exchange or acting as a broker or dealer, as defined by law.

The historical problem with such person-to-person transactions is one of trust and pricing. At the moment of settlement, neither party wants to deliver first—cash or certificate—out of fear the counterparty might fail to perform. Traditionally, this was solved by engaging a trusted escrow agent or a clearing agency. For an escrow agent, the seller delivers the security to the escrow agent, the buyer delivers the cash, and the agent simultaneously releases each leg to the other party. For a clearing agency, the intermediary guarantees both sides of the trade, taking the risk of performance on itself. While functional, these models present two key limitations:

• Central Intermediary Dependence – Each process relies on a trusted, centralized third party.

• Static Pricing Risk – Once the trade occurs, the price is fixed, even though the broader market may move. A seller could thus receive less than the then-prevailing market value by the time the trade settles (or a buyer pays more than the then-current market price), risks that themselves trigger further complication through margining systems.

An AMM’s architecture solves both problems. The “escrow” or clearing agency is not a human intermediary, but an immutable, onchain program that holds the assets in a smart contract, enforces the agreed pricing function, and executes settlement atomically—eliminating counterparty risk. Moreover, unlike a traditional escrow, the AMM can continuously update its price based on algorithmic pricing functions, ensuring that trades occur at prices that are better reflective of current market conditions. And since trades are settled in near real-time, there is no need for a clearing agency.

When a liquidity provider contributes assets to a DEX pool, they are functionally depositing those assets into an autonomous escrow account and instructing the program to make them available to any counterparty willing to transact at the contract’s dynamic price. The liquidity provider never negotiates directly with a counterparty; rather, they interact with the protocol’s pre-programmed logic on both pricing and settlement. This is, in essence, an automated OTC (over-the-counter) escrow arrangement—executed without reliance on a central operator, and without the hallmarks of an “exchange” under the Exchange Act.

The Big Picture for Onchain Securities

Every few decades, a new technology arrives that doesn’t just improve an industry or practice, but transforms it. Tokenization will do just that for equities and the financial system more broadly. We believe that tokenization will do for value what the internet did for information. While the tokenization of GLXY today may seem like one small step in this longer evolution, we believe the structure proposed in this paper (and enacted onchain) has the potential to be the HTTPS for equities: a secure standard that builds trust in a novel digital medium and thus allows for its widespread adoption.

Despite the fact that they appear efficient to most, legacy payments rails and traditional capital markets infrastructure are still mostly a complex series of tubes, giant mazes of overlapping and interlocking systems operated by many intermediaries with different, bespoke connections to one another, and often written in outdated code. Built atop prior versions of itself over decades, modern markets and payments infrastructure literally requires advanced degrees to understand. Had these systems been designed from scratch with modern technology, they almost certainly would not take the form they do today.

There is no doubt that public, decentralized blockchains are more efficient, transparent, durable, and resilient recordkeepers and settlement systems than exist in traditional capital markets. Were we to rebuild these systems from scratch, public blockchains would undoubtedly play a key role. But since we aren’t rebuilding them from scratch, a model is needed to bridge the two systems, and we believe ours is the most efficient, compliant, transparent, and innovative model.

Sizing the Opportunity for Onchain Securities

We believe that once equity securities see significant issuance and trading onchain in real forms, like the structure we have created, mass adoption will begin. Decentralized trading structures will be seen to be significantly fairer, faster, cheaper, and safer than traditional methods. When this happens, onchain securities will have their “Uniswap moment,” when the centralized trading world begins to bleed volumes in earnest to onchain trading. We model the growth of this onchain market beginning after this moment.

To estimate the potential size of the onchain equity markets, we project U.S. equity market cap and total share trading activity using historical anchors: ~7% nominal growth and ~3% growth in total share trading volume driven by decades of electronification and automation.

We then model tokenized equities on an S-curve across bear, base, and bull scenarios, calibrated to three precedents: the multi-decade rise of ETFs from the 1990s, the faster hockey-stick visible in recent spot crypto ETFs, and the growth of tokenized money market funds that validates demand for onchain wrappers.

To translate value migration into flow migration, we assume tokenized rails exhibit higher turnover than legacy rails because they are 24/7, instantly settled, and fully funded, so trading volume share grows faster than market-cap share as adoption advances.

We also use the crypto market’s shift from CEX to DEX (0% to nearly 20% of total trading volumes in five years) as evidence that order flow can migrate quickly once liquidity and user experience on the new rails reach parity.

Total market cap and total average daily volume (ADV) are held consistent across scenarios at each horizon, and we derive tokenized market cap, tokenized share of trading, and tokenized ADV from those adoption and turnover assumptions. Like any model, this one has limitations, notably sensitivity to the turnover gap, S-curve calibration, regulatory timing, and price-mix differences between tokenized and traditional cohorts.

Risks and Disclosures

Galaxy and Superstate have worked diligently to eliminate or mitigate risks to investors and the market. Nonetheless, given the novel nature of this format of equity ownership, it is important for investors to understand various risks.

Holders of tokenized GLXY could lose access to their wallet. Similar to lost security certificates,in the case of lost keys, Superstate can reissue the tokens into a new wallet controlled by the shareholder. Because Superstate tracks all onchain movements of tokenized GLXY between shareholders, and because all shareholders are known to Superstate, Superstate can reissue the tokenized shares to a new wallet controlled by the shareholder while cancelling unrecoverable shares. Note: GLXY shares can be restored in the case of lost wallet keys, but other assets (such as permissionless assets like SOL) cannot be recovered if wallet keys are lost.

The price of traditional GLXY could diverge from the price of tokenized GLXY. Galaxy would fully support its onchain shares to trade in DeFi applications in the future as soon as there is sufficient regulatory clarity to do so, and creating a market structure that encourages prices to remain comparable between DeFi and the traditional exchange market is an important priority for the firm. But the market for onchain securities is nascent, and even if or when AMM trading is enabled, there can be no assurance that a liquid or orderly market for tokenized GLXY will develop or be sustained. In addition, if or when tokenized GLXY begins trading on decentralized exchanges, it is worth knowing that decentralized exchanges may have significantly less liquidity, volume, transparency or regulatory oversight compared to national securities exchanges, such as Nasdaq. This could fragment liquidity across platforms, impair price discovery, widen bid-ask spreads, and lead to prolonged price discrepancies between tokenized and traditional GLXY—especially where arbitrage is limited by operational or regulatory constraints.

Furthermore, professional traders may face unclear or evolving obligations when interacting with onchain securities such as tokenized GLXY, and the application of the U.S. federal securities laws and other regulations to the trading of tokenized securities remains uncertain. This may prevent or discourage these firms from holding, transacting, or facilitating transactions in tokenized GLXY, further limiting liquidity. Reduced liquidity in tokenized GLXY, whether due to general investor unfamiliarity, uncertain demand, operational friction, inefficient linkages between the markets for tokenized GLXY and traditional GLXY or otherwise, could result in lower trading prices for tokenized GLXY, and such negative price signaling from the market for tokenized GLXY could adversely impact the trading price of traditional GLXY.

A core method to encourage consistent pricing across venues is the creation and streamlining of the bridge between traditional and decentralized finance. In this first stage, Galaxy has created that “bridge,” giving shareholders who onboard with Superstate the ability to deliver traditional shares to Superstate to “create” tokenized shares, or deliver tokenized shares to Superstate and “redeem” them for traditional shares. To the extent that price disparities between venues arise, we expect shareholders, particularly sophisticated ones, to make use of this bridge to collapse any spreads that emerge. However, it may take time for use of the bridge to become normalized, and therefore the ability of market participants to arbitrage any spreads could be impeded.

The Securities and Exchange Commission (SEC) may determine that we are not allowed to tokenize our Common Stock in this manner. While we believe this tokenization of process is both revolutionary in scope but also elegant in design such that it conforms with existing securities laws and regulations, it is possible that the SEC could make a different determination. If regulatory authorities determine that the platforms, mechanisms or participants involved in the secondary trading of tokenized GLXY do not comply with applicable law, we or market participants could face enforcement actions or fines, or be required to unwind or restructure aspects of the project. In the case that Galaxy was ordered to unwind its onchain share program, Superstate could pause the token contract, recall all tokenized shares, and then work with onchain shareholders to reformat tokenized shares into traditional format for delivery back into the traditional markets ecosystem. However, this process could take time and, while in progress, it could be difficult for shareholders to buy or sell their tokenized Galaxy stock. These risks could lead to diminished investor confidence, reduced participation in the trading of tokenized GLXY, and corresponding negative effects on the trading price, volatility and/or liquidity of traditional GLXY.

Frequently Asked Questions (FAQ)

Can anyone buy, sell, or hold GLXY onchain?

Galaxy and Superstate require that all holders of GLXY onchain perform onboarding with Superstate, which includes identity verification (“KYC”) and address “whitelisting.” Anyone who can onboard with Superstate can hold onchain GLXY, which includes almost everyone in the world except those included on certain government deny lists, like the Office of Foreign Asset Control’s (“OFAC”) Specially Designated Nationals (“SDN”) list, also known as the “sanctions list.”

Tokenized shares of GLXY can only be held by addresses that have onboarded with Superstate and been added to the token contract’s “allowlist.” Attempts to transfer onchain GLXY shares to addresses that are not on the allowlist will fail at the smart contract level.

All addresses and identities must be known to our digital transfer agent for two primary reasons: 1) to ensure that Galaxy’s books and records accurately reflect share ownership for regulatory and operational purposes, including maintaining the ability to contact shareholders in the case of a proxy vote, dividend, or other corporate action; and 2) to conform to important anti-money-laundering and counter-terrorism-financing laws and regulations. Onchain equity tokenization structures that do not include identity verification – especially by the issuer itself – risk allowing bad actors to hold company equity and also make it unlikely that token holders can actually receive or exercise true equity ownership rights over the company.

What happens if I lose the keys to my wallet?

As Galaxy’s digital transfer agent, Superstate maintains books and records that maintain information about all ownership of onchain GLXY, including holders, transfers, and any trades. If a holder of onchain GLXY loses access to their wallet, that investor can request that the digital transfer agent cancel and reissue the tokenize shares to a new wallet. Note: while onchain GLXY shares can be restored by Superstate if you lose access to your wallet and keys, other assets (such as permissionless assets like SOL) cannot be restored by Superstate or Galaxy if wallet keys are lost.

How is tokenized GLXY different from other onchain equities?

As far as we know, GLXY is the first ever publicly listed U.S. equity to exist and trade on a public blockchain. Onchain $GLXY tokens are shares of Galaxy’s Class A Common Stock and come with all the same rights as other forms of shares, such as those held in a traditional brokerage account.

Other structures, such as those that rely on SPV wrappers or synthetic models, mostly do not represent direct claims against the underlying equity issuer, but instead are derivatives or shares in some type of special purpose vehicle (SPV), which itself may own shares in the underlying stock. These “wrapped equity tokens” are typically issued by offshore SPVs and are not issued within the framework of the securities laws and regulations of the United States.

To the extent that holders of wrapped equity tokens have claims against the issuer, such as the right to vote on corporate governance, receive dividends, or participate in other corporate actions, those rights may only extend to the SPV itself rather than to the underlying issuer. Whether or not wrapped equity token holders maintain any ongoing rights to the underlying issuer depends on any contracts or obligations imposed by or agreed upon between that token’s issuer and the tokenholders.

When will tokenized GLXY be available to trade in DeFi applications?

We believe that this is the first time a publicly listed U.S. company has allowed for its shares to exist in tokenized format on public blockchain. This achievement was possible due to significant technological and regulatory effort by both Galaxy and Superstate, but it is only the first step.

While those onboarded with Superstate can currently trade GLXY onchain in a peer-to-peer manner, we have not yet made it possible for GLXY to be traded on DeFi applications, such as an automated market maker (AMM). Just as Galaxy tracks and can restrict the transfer of onchain GLXY to those who have onboarded with Superstate, so can Galaxy prevent or control which AMMs those tokens can interact with.

We anticipate allowing for deposit and withdrawal of our tokens into AMM pools as soon as there is sufficient regulatory clarity. Because these are real shares of Galaxy Class A Common Stock, there are real regulatory considerations.

Will onchain shareholders of tokenized GLXY be subjected to maximum extractable value (MEV)?

Because Galaxy’s token contract requires all addresses to be on an “allowlist” in order to hold our onchain shares, unknown third parties, including MEV bots, cannot interact with the token. Thus, our onchain shares cannot be subjected to frontrunning, backrunning, sandwich attacks, or other MEV conducted by unknown third parties, unless they onboard with Superstate and have passed Superstate’s KYC screening.

Can my broker help me interact with tokenized GLXY shares?

Galaxy is not restricting any party from onboarding with Superstate to buy, sell, hold, or transfer its tokenized shares except in the case that the party cannot successfully pass Superstate’s identity verification process, as described above. Like any entity, market intermediaries, including broker-dealers, can onboard with Superstate. However, given limited regulatory guidance, we are not aware of any registered broker-dealers or financial advisors that currently conduct extensive activities involving tokens, whether securities or non-securities, so there may not be any available today to provide services relating to onchain securities.

In the absence of broker-dealers, onchain equities markets will largely involve self-custody by investors and, eventually, direct interaction with decentralized trading protocols without the use of intermediaries. We are working with the SEC to help evolve the current securities laws to enable existing intermediaries to interact with public blockchains, but do not know when that will be possible.

What if I have problems with my tokens? Whom do I contact?

At any time, holders of tokenized GLXY can contact Superstate. As all holders will necessarily have created an account with Superstate as part of the onboarding process, onchain shareholders can simply login to their Superstate account and contact our digital transfer agent. If, for some reason, that is not possible, onchain shareholders can always contact [email protected], just like any other owner of Galaxy stock.

Special Thanks

Special thanks to Andrew Siegel, Edgar Urmanov, Junnette Alayo, Michael Wursthorn, and Isabelle Yablon at Galaxy; Robert Leshner, Jim Hiltner, and Alexander Zozos at Superstate; and Zachary Zweihorn, Dan Gibbons, and Justin Levine at Davis Polk for their assistance with this paper.