Source: Galaxy; Compiled by: Golden Finance
Galaxy has partnered with Superstate to allow the tokenization of its Class A common stock on the Solana blockchain.
Superstate serves as the digital transfer agent for Galaxy's tokenized shares.
GLXY's on-chain shares are SEC-registered Galaxy Digital Class A common shares, which have the same legal and economic rights as our traditionally formatted shares.
Those who join Superstate can hold (self-custody), send, and receive GLXY shares on-chain.
While GLXY can be transferred bidirectionally between permitted listed entities, Galaxy has not yet enabled AMM-based on-chain stock trading.
Galaxy stock contract address on Solana: 2HehXG149TXuVptQhbiWAWDjbbuCsXSAtLTB5wc2aajK
Any tokens from other smart contract addresses that claim to be on-chain shares of GLXY stock, or tokens truly issued by Galaxy Digital, are fraudulent. Galaxy Research created this Dune dashboard to track the on-chain supply of GLXY: https://dune.com/glxyresearch_team/glxy-class-a-common-stock-token Introduction On September 3, 2025, Galaxy announced the tokenization of its Class A common stock, GLXY—the first-ever tokenization of a publicly listed U.S. equity security on a major public blockchain. Galaxy has enabled existing shareholders of its SEC-registered Class A common stock to transfer their shares from the traditional format to an on-chain version on the Solana blockchain. By creating a “bridge” between traditional and on-chain markets, Galaxy enables its shareholders to represent their GLXY holdings in a tokenized form. When users own these tokenized shares of Galaxy, their tokens are actual shares in the company. They are not "wrapped shares"; they are true on-chain shares. They confer all the same financial and legal rights as our existing publicly issued shares, because they are existing publicly issued shares. This marks the first time in history that a publicly listed US stock has been issued on a major public blockchain. We achieved this with the help of Superstate, an SEC-registered transfer agent and leading provider of tokenization services and on-chain operations. (Note: Galaxy Ventures is an investor in Superstate). Users who complete Superstate registration can hold their shares (in their own custody) and transfer them to an approved address. Therefore, while AMM trading is not yet enabled, GLXY can be transferred in both directions between entities on the allowable list. This is just the first step in what we envision as a revolution in the capital markets. The SEC Chairman stated that regulators will "develop reasonable and practicable rules" for decentralized systems in securities markets, including automated market makers (AMMs). Superstate and Galaxy are both actively working with the SEC to help define a compliant model for public equity AMM trading, and we believe clear rules will be forthcoming soon. Galaxy has always been at the forefront of financial innovation. We remain committed to collaborating with key industry regulators and stakeholders to advance Galaxy's core, long-term mission: to build faster, more efficient, more inclusive, and more secure ways to transfer, store, and create value for the global economy—and tokenized shares are the next step in that journey. How did we get here? A History of Tokenization Humans prefer direct, bilateral, peer-to-peer interactions. Direct relationships are our natural state of preference. But as organizations, systems, and markets scale, these direct connections tend to break down and are often replaced by centralized governments, institutions, intermediaries, and organizations. Throughout history, most forms of human organization, from local to national politics, production and supply chains, to currency and markets, have undergone this same evolution. Centralization promotes efficiency at the expense of autonomy. The history of the U.S. capital market is no exception. In the late 1960s, the U.S. capital market boomed, but market infrastructure failed to keep pace, ultimately giving rise to the centralized stock clearing and settlement system we see today. One of the most famous examples of this breakdown and the resulting centralization was described by U.S. SEC Chairman Paul Atkins in his seminal speech announcing the launch of "Project Crypto" on July 31, 2025. Securities were lost or stolen. Trade failure rates skyrocketed. Many thinly capitalized broker-dealers were left stranded by failed trades. In desperation, trading hours were shortened, and the exchange ultimately closed on Wednesday to allow firms to process the pileup of certificates. The then-chairman of the SEC described the collapse, caused by outdated systems, as "the longest and most severe crisis in the securities industry in 40 years... firms collapsed and investor confidence plummeted." To its credit, the SEC proactively addressed the so-called "paperwork crisis." The agency helped market participants establish the Depository Trust & Clearing Corporation (DTC), which revolutionized the way securities are held and traded. Stock ownership no longer required paper certificates to be passed between clients and brokers, brokers and clients, and through computerized ledgers. The certificates themselves were fixed and securely stored in vaults, and title was transferred electronically, laying the foundation for the modern clearing and settlement system that persists to this day.
—SEC Chairman Paul Atkins, July 31, 2025
During the economic boom of the 1960s, the direct settlement process that Wall Street relied on collapsed amid soaring trading volumes. In response to this "paperwork crisis," the U.S. capital markets abandoned peer-to-peer settlement processes and created a centralized intermediary (ultimately known as the Depository Trust & Clearing Corporation, "DTCC"). This centralized settlement process worked well, enabling substantial growth in U.S. capital markets for decades. If there was a way to avoid the complexity of the "paperwork crisis" while maintaining a peer-to-peer process, it would likely be the preferred solution. In the 1960s, it was impossible to meet Wall Street's growing settlement and recordkeeping needs without using a centralized intermediary. But that is no longer the case. For over a decade, technologists and financial professionals have recognized the transparency and efficiency blockchain brings to asset ownership and transfer. As early as 2016, the Depository Trust & Clearing Corporation (DTCC) foresaw the market advantages and disruptive potential of decentralized public blockchains and published a major white paper titled "Embracing Disruption: Unlocking the Potential of Distributed Ledgers to Transform the Post-Trade Landscape." Over the years, dozens of companies have worked to tokenize real-world assets, including real estate, commodities, physical collectibles, and art, but most have had limited applications. In some cases, these tokenization attempts have faced regulatory resistance, but in most cases, the market has failed to bridge the gap between the physical attributes of assets and the intangible properties of blockchains. Tokenizing gold is a notable exception. This is essentially a technical hurdle. By contrast, tokenization applications that prioritize intangible or even digital assets are more widespread. Stablecoins, which have become a popular product due to their broad product-market fit, are themselves a form of tokenization. Stablecoins have demonstrated three clear use cases and continue to experience strong growth: cross-border payments, overseas dollar circulation in emerging economies, and as trading pairs for Bitcoin, Ethereum, and other digital assets. Some tokenized categories beyond stablecoins have also experienced strong initial growth, particularly private credit and money market funds. The market currently prefers to refer to this on-chain tokenization as real-world assets (RWAs); the supply of these assets currently stands at only around $25 billion, less than one-tenth of the stablecoin supply. Tokenized Securities: The limiting factor to the widespread adoption of tokenized securities has never been technological, but rather regulatory. The tokenization of securities isn't a technological leap, but rather a revolution in recordkeeping. Unlike gold, art, or real estate—where tokens must be tied to physical assets through custody and provenance—most securities are already dematerialized and held digitally in book-entry form. In the United States, holdings are held within the DTCC Indirect Holding System (with DTC as the central depository), with actual ownership tracked through broker-dealers and transfer agents. This system is a "centralized ledger." "Tokenization" in this context simply involves migrating entries from a centralized ledger to a decentralized, distributed ledger; the underlying rights and obligations remain unchanged. Regulatory Obstacles to Equity Tokenization Historically, market regulators around the world, particularly the US SEC, have shown little initiative in creating a regulatory environment that allows for the tokenization of equity securities. As a result, startups struggle to offer viable public blockchain services to traditional capital markets, while traditional capital markets firms, at least those willing to try, struggle in the world of permissioned blockchains. Neither firm has truly bridged the gap. The complex rules governing issuance, recordkeeping, custody, settlement, reporting, brokerage, and trading have largely not been updated to allow for the trading of equity securities in tokenized form. The US SEC, under former Chairman Gary Gensler, argued that existing securities rules were sufficient for issuers, intermediaries, and exchanges, but failed to explain why the "tokenized market entry and registration" requirement was untenable. In short, the old rules worked well in the traditional financial system but were not fully adapted to the inherent capabilities of blockchain technology. This impasse has led to two significant consequences: The inadequate regulatory framework in the US has stalled the development of tokenization. Despite the continued surge in the use of stablecoins as a medium of exchange and settlement asset, the tokenization wave that began in earnest in 2017 and 2018 has failed to gain traction in the years that followed. Both cryptocurrency-native and traditional companies are reluctant to prioritize technological and operational innovation. Regulators' policy decisions leave unresolved complex regulatory issues that should be nonpartisan—for example, whether and how broker-dealers can interact with security and non-security tokens. The market continues to employ inefficient tokenization structures to circumvent U.S. regulatory overhead. While regulatory clarity surrounding cryptocurrencies has stagnated or regressed, the demand for new tokenization structures remains unabated. Yield-generating stablecoins, SPV-like structures for tokenized equity exposure, and teams building trading applications and other mechanisms have all moved overseas. Tokenized money market funds are being launched without token transferability. To the extent that U.S. equity securities have been tokenized, these tokens exist as wrappers, without any specific ownership claim on the underlying company's stock, or they are relegated to private platforms that lack the transparency and openness of permissionless blockchains. The industry has pursued these structures like water on the road, finding some that work but no better ones. Technology and Regulation Collaborate Despite years of resistance, blockchain technology and operational innovations have advanced, enabling security tokens to be implemented on public, permissionless blockchains while still adhering to the principles underlying securities and anti-money laundering laws. A regulatory environment previously characterized by hostility and indifference is now showing positive momentum toward support and engagement. By 2025, the U.S. Securities and Exchange Commission (SEC) and the President's Task Force on Digital Asset Markets had clearly stated that promoting public blockchain adoption in the United States was a national priority. SEC Chairman Atkins and Commissioner Pierce have repeatedly articulated the benefits that blockchain innovation can bring to traditional capital markets and pledged that the SEC will review and amend existing rules or issue exemptions to allow for innovation in the equity tokenization space. Crucially, the SEC has begun soliciting feedback from stakeholders on how to modernize its rules to cover blockchain tokens, with a particular focus on broker-dealers, issuers, secondary markets, custody, and lending. This is a daunting task, especially given the failure of previous SEC leadership to undertake meaningful work on these fronts. While developing new rules for the industry is a significant undertaking for regulators, Galaxy will continue to be a trusted resource for regulators and stakeholders, working towards a shared goal: encouraging the innovation for which the U.S. financial markets are renowned and ensuring clear guidelines are in place to maintain the trust and security that are the bedrock of our economy. Sometimes change is gradual, and sometimes it's sudden. We believe the past decade of regulatory ambiguity was gradual (a bit like "nothing happened"), but now we're in the "suddenly happening" phase. Regulators now have the opportunity to shape the rules for the future of the financial system in the coming weeks and months. By tokenizing GLXY today through Superstate, we are demonstrating our commitment to continued innovation in partnership with regulators and moving toward the economic future we've envisioned since our founding. Tokenizing Galaxy Stock GLXY This leads to the tokenization of GLXY, which is now trading on the Nasdaq. While significant questions remain about how tokenized shares of US-listed companies can be traded on-chain, we have developed a process and structure that allows us to tokenize our existing GLXY shares—not on a private permissioned blockchain or through an SPV wrapper, but in the form of actual shares. We have structured our equity tokenization efforts in strict compliance with existing US securities laws, which impose certain restrictions. We don't cut corners, which means we must innovate carefully and responsibly. We have built a bridge between traditional capital markets and permissionless blockchains, allowing any shareholder with access to Superstate to convert their shares into tokenized form on the Solana blockchain. Due to regulatory uncertainty, we have not yet enabled automated market makers (AMMs) or other fully permissionless decentralized trading mechanisms on Solana to trade these tokens directly. As US securities regulators provide clearer guidance, our goal is to gradually expand trading venues, ultimately enabling these tokenized shares to be traded directly on AMMs and other forms of decentralized exchanges. Importantly, until these more durable, transparent, and stable secondary markets emerge, there is no guarantee of on-chain liquidity for GLXY's on-chain shares, although two-way trading of GLXY will be possible between addresses enrolled in Superstate. When evaluating support for additional blockchains or trading venues, we will consider technology, transparency, decentralization, and regulatory frameworks. The US SEC has also not yet fully adopted or clarified its rules allowing brokers and dealers to transact with any type of token, whether securities or otherwise. Therefore, it is unclear which US brokers would be able to assist on-chain holders of GLXY with key operational or investment decisions. While the SEC has regrettably not participated in this rulemaking process over the past four years, the current SEC is seeking comment on how to enable brokers and dealers to operate on-chain. Please note that no broker will track your cost basis when you hold or trade GLXY on-chain.
In the long term, we believe on-chain equity capital markets will become as distinctive as, or even more distinctive than, traditional markets, and we are working closely with key stakeholders, including the U.S. SEC, to achieve this goal.
Galaxy Class A common stockholders can convert their existing shares into tokenized shares. While we acknowledge that the current process for converting traditional shares into tokenized shares is somewhat cumbersome, we believe that: 1) the bridge between traditional finance and decentralized finance will be simplified over time; and 2) most people who wish to use on-chain GLXY equity will not need to actually participate in the conversion process from traditional shares to tokenized shares. As shown in the image above, creating tokenized GLXY from traditional GLXY requires the following steps: 0. Register with Superstate at Superstate.com/Register. Yes, to hold or trade tokenized Galaxy Class A common stock, you must complete a Know Your Customer (KYC) verification process with our digital transfer agent. This step can be completed at any time, even if you don't already hold Galaxy shares. (Approximate time required: approximately 10 minutes to register and approximately 2 hours to verify.) In order to reformat existing GLXY shares into tokenized shares, you must already own GLXY shares. 1. Instruct your brokerage firm to transfer your shares to Galaxy's transfer agent. Galaxy uses Equiniti ("EQ") as its primary transfer agent. A transfer agent is an SEC-registered entity responsible for keeping and maintaining official shareholder records for each of our stocks and performing routine tasks, including tracking and facilitating changes in shareholding, calculating and paying cash dividends, processing stock splits, mailing and delivering proxy materials, and performing other administrative tasks. Asking your brokerage firm to transfer your shares to the transfer agent for that stock (i.e., to the Direct Registration System (DRS)) may sound daunting, but two of the authors of this article were able to complete this task in minutes using live webchat sessions with Fidelity and Charles Schwab, respectively. (See the image below.) (It takes about 10 minutes.) Once processed, your shares will be transferred from your brokerage firm's account at the Depository Trust Company (DTC) to your name at Galaxy and registered by our transfer agent, EQ. You still own the shares, but Galaxy and its transfer agent now record your ownership. (This takes approximately 3 business days.) 2. Instruct Equiniti to transfer your shares to Superstate's Onchain Eligible Share Account. Please email [email protected] to explain that you have transferred your Galaxy shares to EQ using DRS and 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 submit. (Approximate processing time: approximately 4 hours). 3. Superstate will then mint your shares at 1 GLXY token per share, a direct, legally binding version of your shares. This requires you to have successfully joined Superstate and added a Solana address to your Superstate account profile. You can then click the “Tokenize” button on the Superstate website, which will mint 1 GLXY token per share. (This takes approximately 10 minutes). 4. Superstate will deliver your on-chain GLXY shares (tokens) to your Solana wallet. You are now free to store them in a self-custodial wallet or send, receive, or transfer them to other registered addresses. 5. To reformat your GLXY tokens back to the traditional format, reverse these steps. Contact Superstate and request that they transfer your shares back to EQ, then request that EQ transfer the shares back to your brokerage account. Crucially, any GLXY equity token holder who joins Superstate can perform this operation, regardless of whether they were the original investor who created their shares.
Please note that this process specifically describes the tokenization and detokenization process for connecting traditional Nasdaq-listed Galaxy shares to tokenized, on-chain GLXY shares. If you simply want to purchase existing on-chain GLXY shares, simply register with Superstate at Superstate.com/Register and purchase on-chain GLXY shares from existing holders. As more GLXY shares are tokenized, we expect on-chain liquidity to increase, eliminating the need for most on-chain shareholders to undergo this accumulation and redemption process. In the long term, while this accumulation and redemption process will remain available to all shareholders, regardless of size or sophistication, we expect it to be primarily used by established trading firms. Galaxy's Approach vs. "Packaged" Equity Structures We firmly believe that tokenized equity must be tokens that confer actual ownership of the underlying shares. As mentioned above, this has yet to achieve any substantial progress in the United States due to technical and regulatory reasons. The emergence and application of public blockchains should not negate decades of progress in the U.S. capital markets, but rather complement and enhance them. We believe that tokenized equity packaging severs the relationship between issuers and shareholders, to the detriment of both parties. If you purchase shares in a company, you should retain all economic and legal rights associated with holding that company's shares, regardless of the form those shares take. Given the need to leverage the permissionless, composable, efficient, and transparent nature of public blockchains to handle issues such as equity securities, it's understandable that many companies have created structures that circumvent U.S. securities laws. However, we do not believe wrapped equity tokens are a viable or preferable long-term solution, so our entire research in this area is centered around how to bring true stocks to blockchains.
Galaxy chose Solana as its first public blockchain for tokenized stocks for several reasons.
Solana is a decentralized Layer-1 blockchain. We believe that tokenized equity must be traded on highly decentralized public Layer-1 blockchains, rather than on Layer-2 blockchains where individual companies or foundations can unilaterally control important functions like transaction ordering, transaction fees, or settlement finality. For example, while today's Ethereum Rollups may have unilateral exit functionality (assuming the underlying assets exist on both Layer-2 and Layer-1), some Rollup functionality may be controlled by a single sorter, operated entirely by a single company or foundation. While these operators may be altruistic and even seek to protect on-chain shareholders from issues like high fees or delayed settlements, the Rollup operator still theoretically possesses unilateral, centralized power to take (or refrain from taking) actions that could, through negligence or malicious intent, harm the interests of on-chain shareholders. Furthermore, the ability to unilaterally exit a Layer-2 rollup depends on the availability of the underlying assets on the connected Layer-1. Therefore, for on-chain securities available on Layer-2 Rollups, we believe they should primarily be issued on the Layer-1 blockchain to preserve the ability for Layer-2 users to unilaterally exit the rollup. We plan to support tokenized GLXY shares on Ethereum Layer-1 in the future and will continue to evaluate its applicability on other blockchains, including Ethereum Layer-2. Solana aims to be the "Nasdaq of blockchains." Its high-speed settlement, native fee market, efficient networking stack, and flexible developer base make it an ideal platform for leading the convergence of traditional and decentralized capital markets. While these updates primarily focus on increasing Solana's bandwidth and reducing latency, Solana developers will release additional updates in the future to improve market microstructure on Solana. Under its "Internet of Capital Markets" framework, Solana developers plan to add asynchronous program execution and multiple concurrent validator leaders, which will significantly increase parallelization capabilities and application-controlled execution, providing a more flexible design space for applications, especially marketplace applications. We also expect Solana to be the first to adopt DoubleZero, a new global fiber-optic network tailor-made for high-speed blockchain settlement, further solidifying Solana's position as a true competitor to the traditional financial system. Finally, updates to Solana's existing validator client, Anza, and the launch of a new validator client, Firedancer, will further enhance network performance and resiliency. Solana boasts the highest DEX activity. In terms of on-chain spot trading activity, Solana has held the top spot volume position every month since October 2024. While Solana hasn't yet taken the lead in on-chain credit (likely due to its higher APR offering a competitive alternative) or on-chain perpetual swaps, Solana has become the preferred layer-1 blockchain for spot trading due to its high trading volume, fast settlement, and low fees. With its large retail user base, Solana has also become one of the most accessible networks in the cryptocurrency space, driving the development of broad, frictionless onboarding solutions. The U.S. SEC is grappling with the question of whether or how to regulate decentralized exchanges on public blockchains. The primary purpose of U.S. securities laws is to protect investors from the opacity, conflicts of interest, and arbitrary power of centralized intermediaries such as brokers, dealers, and exchanges. Because some of these institutions may unilaterally control user funds, make trading errors, conflict their interests with those of their clients, or even engage in malicious behavior, they face stringent oversight, regulation, and oversight. We believe the decentralized, automated, and transparent nature of public blockchains and decentralized financial applications largely eliminates the need for these requirements. Other laws and regulations may need to adapt to the new reality, where the roles of intermediaries, issuers, and investors differ from those currently held. We do not yet know when the on-chain GLXY token will be available through automated market makers (AMMs) or other forms of decentralized exchanges, but we are working closely with stakeholders, including the SEC, to achieve this goal. DEXs Are Not “Exchanges” and Should Not Be Regulated Decentralized exchanges (“DEXs”) are fundamentally different from traditional exchanges regulated by the Securities Exchange Act of 1934, and we believe they should not be classified as “exchanges” within the Act’s statutory framework. First, Section 3(a)(1) of the Securities Exchange Act defines an “exchange” as “an organization, association, or group of persons that provides a market or facility for the exchange of securities.” Here, “organization, association, or group of persons” should be understood to apply only to individuals and does not include or contemplate computer programs. A DEX is not an “organization of persons” (it is not an organization); nor is it an “association of persons” (it is not an association); and certainly not a group of persons. This statutory definition clearly presupposes a centralized, identifiable entity that has autonomous control over the operation of the market. In stark contrast, many DEXs operate autonomously through self-executing smart contracts on decentralized blockchain networks, lacking any centralized authority to exert governance control. Therefore, based solely on statutory interpretation, we believe that DEXs do not meet the definition of "exchange" under the Securities and Exchange Act. Secondly, traditional exchanges possess and exercise autonomous regulatory powers, actively managing market operations, setting membership standards, enforcing regulatory compliance, and intervening when necessary to adjust or correct transactions. Autonomous DEXs inherently lack the ability for subjective intervention or autonomous operational control, as transactions are deterministically conducted through transparent, pre-programmed rules embedded in immutable smart contracts. Once executed, these rules cannot be altered by the DEX. Autonomous DEXs differ significantly from traditional exchanges regulated under the Securities and Exchange Act, primarily due to their complete lack of autonomy. Third, the Securities and Exchange Act's regulatory framework assigns specific regulatory responsibilities to exchanges, such as membership review, compliance oversight, and disciplinary action, provided that the exchange is a centralized entity capable of performing these functions. Autonomous DEXs, lacking centralized governance or an identifiable regulatory entity, structurally exclude these responsibilities. Trading and market functions are automated, transparent, and non-discretionary, making the centralized regulatory responsibilities envisioned by the Securities Exchange Act neither necessary nor feasible for DEXes. Fourth, the Securities Exchange Act was intended to mitigate the risks of manipulation, fraud, conflicts of interest, information asymmetry, and other abuses posed by centralized intermediaries. Autonomous DEXes inherently eliminate these risks through decentralized transparency, automated execution, and immutable auditability. Without discretionary human intervention, the Securities Exchange Act effectively addresses regulatory concerns, making its application to DEXes unnecessary and contrary to the original legislative intent. Finally, classifying autonomous DEXes as exchanges under the Securities Exchange Act would undermine the policy goals of promoting innovation and market efficiency. Traditional regulatory frameworks designed for centralized entities impose unnecessary regulatory burdens that autonomous DEXes are unable to meet, thereby stifling the technological advancements inherent in decentralized finance without providing the corresponding regulatory advantages. Therefore, DEXs, due to their autonomous, decentralized, transparent, and deterministic operational characteristics, do not meet the statutory definition of an "exchange" or the underlying policy principles of the Securities Exchange Act and should be excluded from its regulatory framework. The Principle of Autonomy in AMMs: We strongly believe that decentralized, transparent automated market makers (AMMs) do not need to register as exchanges or alternative trading systems (ATSs), and many AMMs may not be able to register due to the lack of an identifiable operating entity. The reason is simple: autonomous, self-executing programs with publicly available source code do not require regulation, while current forms of regulation are tailored to overseeing those who control centralized exchanges. From a regulatory perspective, if autonomy excludes DEXs from the scope of the Securities Exchange Act's rules, it is critical to establish a principled and manageable framework for determining what qualifies as an autonomous system, compared to non-autonomous venues such as Nasdaq. Consistent with other regulatory analyses, we believe the following factors indicate that a DEX is autonomous: 1. Lack of discretion. The platform must operate according to pre-programmed, deterministic rules embedded in self-executing smart contracts. No entity, individual, or group (including platform developers) may unilaterally modify, halt, or influence the settlement, execution, matching, or operation of deployed trades, except through a pre-disclosed, transparently documented governance process that requires broad decentralized consensus. 2. Transparency and verifiability. All operational logic, including trade execution, matching algorithms, liquidity provision, settlement finality, and the governance process itself, must be fully open-source, transparent, auditable, and publicly verifiable at all times. Transparency includes full public access and open-source availability of the codebase, ensuring external verification of the absence of undisclosed discretionary controls. 3. Self-execution and deterministic settlement. The platform must autonomously execute all trades without human intervention or judgment. Once initiated, transactions conducted through the protocol cannot be blocked, censored, or reversed by any identifiable central intermediary, administrator, or other party. 4. Neutral and Non-Discriminatory Access. The platform must provide open, neutral, and broad access to all qualified participants. No preferential treatment should be granted by any central or identifiable administrative authority. 5. Decentralized Operational Control. Operational functions must be distributed across a network of independent participants, each lacking the ability to dictate, veto, or otherwise control platform outcomes. Governance and changes to the protocol's operations, if any, must clearly rest in the hands of a broadly distributed community, rather than a centralized management structure or identifiable controller. The term "decentralized exchange" is a misnomer, at the very least, risking conflating functionality with regulatory status. Despite the name, DEXs are not legally defined as "exchanges" under the Securities Exchange Act. Rather, it should be understood as a self-custodial mechanism designed to facilitate bilateral, peer-to-peer transactions between willing counterparties. This distinction is crucial because U.S. securities laws do not prohibit voluntary, non-fraudulent direct securities transactions between individuals. Intermediaries are regulated, but not required to do so. Parties that meet directly and agree to trade their own securities are free to do so without triggering the registration and operational requirements of the Securities Exchange Act, as long as they do not "operate" an exchange or act as a broker or dealer within the meaning of the law. Historically, challenges with such interpersonal transactions have revolved around trust and pricing. At settlement, neither party is willing to deliver cash or securities first, fearing that the other party might fail to perform. Traditionally, this problem has been addressed by engaging a trusted escrow agent or clearinghouse. With an escrow agent, the seller delivers collateral to the escrow agent, the buyer delivers cash, and the escrow agent then simultaneously delivers each payment to the other party. With a clearinghouse, the intermediary provides collateral for both parties and assumes the performance risk. While effective, these models also suffer from two key limitations:
Centralized intermediary dependency—Every process relies on a trusted, centralized third party.
Static pricing risk—Once a trade occurs, the price is fixed, even if the broader market fluctuates. Consequently, sellers may receive less than the prevailing market value (or buyers may pay more than the prevailing market price) upon settlement. These risks are themselves further compounded by margin systems.
The AMM architecture addresses both of these issues. The "custodian" or clearinghouse is not a human intermediary, but an immutable on-chain program that stores assets in a smart contract, executes the agreed-upon pricing function, and performs settlement atomically, eliminating counterparty risk. Furthermore, unlike traditional custodians, AMMs can continuously update prices based on an algorithmic pricing function, ensuring that transaction prices more closely reflect current market conditions. Because trades settle near-instantly, there's no need for a clearinghouse. When liquidity providers contribute assets to a DEX pool, they effectively deposit those assets into a self-custodial account and instruct the program to make them available to any counterparty willing to trade at the contract's dynamic price. Liquidity providers don't negotiate directly with counterparties; instead, they interact with the protocol's pre-set pricing and settlement logic. Essentially, this is an automated over-the-counter (OTC) custody arrangement—without relying on a centralized operator or possessing the characteristics of an "exchange" under the Securities Exchange Act. Every few decades, a new technology emerges that not only improves an industry or practice but also revolutionizes it. Tokenization will have the same impact on stocks and the broader financial system. We believe tokenization will have the same impact on value as the internet did on information. While today's tokenization of GLXY may be just a small step in a longer evolution, we believe the structure proposed in this article (and implemented on-chain) has the potential to become the HTTPS of equities: a security standard that establishes trust in this new digital medium, enabling widespread adoption. While traditional payment systems and capital market infrastructure appear efficient to most, they remain largely a complex maze of pipes, operated by numerous intermediaries, interconnected through custom connections, and often written in outdated code. Modern market and payment infrastructure is built on decades-old legacy systems that require advanced degrees to understand. If these systems were designed from scratch using modern technology, they would almost certainly not be what they are today. There is no doubt that public, decentralized blockchains are more efficient, transparent, durable, and resilient record-keeping and settlement systems than traditional capital markets. If we were to rebuild these systems from scratch, public blockchains would undoubtedly play a key role. However, since we are not rebuilding from scratch, we need a model to connect these two systems, and we believe ours is the most efficient, compliant, transparent, and innovative. Evaluating the Opportunity for On-Chain Securities We believe that mass adoption will begin once equity securities, in practical forms like the structures we've created, are issued and traded on-chain at scale. Decentralized trading structures will be perceived as fairer, faster, cheaper, and more secure than traditional methods. This will be the moment for on-chain securities, when the centralized world of exchanges will flock to on-chain trading. We've simulated the growth of the on-chain market following this moment. To estimate the potential size of the on-chain equity market, we use historical benchmarks to project US equity market capitalization and total equity trading activity: nominal growth of approximately 7% and total equity trading volume growth of approximately 3%, driven by decades of electronification and automation. We then model an S-curve for tokenized equities under bear, benchmark, and bull market scenarios, calibrating against three precedents: the multi-decade rise of ETFs since the 1990s, the more rapid hockey-stick growth seen recently in spot crypto ETFs, and the growth of tokenized money market funds, which validates the need for on-chain wrappers. To translate value migration into flow migration, we assume that tokenized rails have higher turnover than traditional rails because they are 24/7, instantly settled, and well-funded, and therefore their share of trading volume will grow faster than their share of market capitalization as adoption increases. We also use the crypto market's shift from CEXs to DEXs (from 0% to nearly 20% of total trading volume over five years) as evidence that order flow can rapidly migrate once liquidity and user experience reach parity on the new rails. We derive tokenized market capitalization, tokenized trading share, and tokenized ADV based on these adoption and volume assumptions, holding total market capitalization and total average daily trading volume (ADV) constant across each timeframe. As with any model, this one has limitations, particularly sensitivity to volume gaps, S-curve calibration, regulatory timing, and price composition differences between tokenized and traditional cohorts. Risks and Disclosures Galaxy and Superstate continually strive to eliminate or mitigate risks to investors and the market. However, given the novelty of this equity investment model, it is critical for investors to understand the various risks. Holders of tokenized GLXY may lose access to their wallets. Similar to losing a security certificate, if the key is lost, Superstate can reissue tokens to new wallets controlled by the shareholder. Because Superstate tracks all on-chain flows of tokenized GLXY between shareholders, and all shareholder information is publicly available, Superstate can reissue tokenized shares to new wallets controlled by shareholders while canceling irrecoverable shares. Note: While GLXY shares can be recovered if wallet keys are lost, other permissionless assets (such as SOL) cannot be recovered if wallet keys are lost. The price of traditional GLXY may diverge from the price of tokenized GLXY. Galaxy will fully support the trading of its on-chain shares in future DeFi applications, provided regulatory clarity is achieved. Creating a market structure that encourages price comparability between DeFi and traditional exchange markets is a top priority for the company. However, on-chain securities markets are nascent, and even with the implementation of automated market makers (AMMs), there is no guarantee that a liquid and orderly market for tokenized GLXY will develop or persist. Furthermore, if tokenized GLXY begins trading on decentralized exchanges, it is important to note that decentralized exchanges may have significantly less liquidity, trading volume, transparency, or oversight than national securities exchanges like Nasdaq. This could fragment liquidity across platforms, impair price discovery, widen bid-ask spreads, and lead to persistent price discrepancies between tokenized GLXY and traditional GLXY—particularly if arbitrage is subject to operational or regulatory restrictions. Furthermore, professional traders may face unclear or evolving obligations when interacting with on-chain securities like tokenized GLXY, and there remains uncertainty regarding the applicability of U.S. federal securities laws and other regulations to tokenized securities transactions. This could prevent or discourage these firms from holding, trading, or facilitating the trading of tokenized GLXY, further restricting liquidity. A decrease in tokenized GLXY's liquidity, whether due to unfamiliarity among ordinary investors, uncertain demand, operational friction, poor connectivity between the tokenized GLXY market and the traditional GLXY market, or other reasons, could cause the trading price of tokenized GLXY to decline. Such negative price signals from the tokenized GLXY market could adversely impact the trading price of traditional GLXY. A core approach to encouraging consistent pricing across platforms is to build and simplify a bridge between traditional and decentralized finance. In the first phase, Galaxy built this "bridge," enabling shareholders joining Superstate to deliver traditional shares to Superstate to "create" tokenized shares, or to deliver tokenized shares to Superstate to "exchange" them for traditional shares. If price discrepancies arise between platforms, we expect shareholders, especially experienced shareholders, to use the bridge to narrow any resulting price gaps. However, normalization of bridge usage may take some time, and the ability of market participants to arbitrage price discrepancies may be hampered. The U.S. SEC could rule that we may not tokenize our common stock in this manner. While we believe this tokenization process is revolutionary in scope and elegantly designed to comply with existing securities laws and regulations, the SEC could rule differently. If regulators determine that platforms, mechanisms, or participants involved in secondary market trading of tokenized GLXY are not complying with applicable laws, we or market participants could face enforcement actions or fines, or be required to rescind or restructure certain aspects of the program. If Galaxy is ordered to rescind its on-chain stock program, Superstate could suspend the token contract, recall all tokenized shares, and then work with on-chain shareholders to reformat the tokenized shares into a traditional format for redelivery into the traditional market ecosystem. However, this process could take time, and shareholders might have difficulty buying and selling their tokenized Galaxy shares while it is ongoing. These risks could lead to a decrease in investor confidence, reduced trading participation in tokenized GLXY, and a corresponding negative impact on the trading price, volatility, and/or liquidity of traditional GLXY.
Galaxy and Superstate require all on-chain GLXY holders to register with Superstate, which includes identity verification ("KYC") and address "whitelisting." Anyone who can register with Superstate can hold on-chain GLXY, which covers virtually everyone in the world, with the exception of those on certain government deny lists, such as the U.S. Office of Foreign Assets Control ("OFAC") Specially Designated Nationals ("SDN") list, also known as the "sanctions list."
Only addresses that have enrolled in Superstate and been added to the token contract's "allow list" can hold tokenized shares of GLXY. Attempts to transfer on-chain GLXY shares to addresses not on the allow list will fail at the smart contract level. Our digital transfer agent must know all addresses and identities for two primary reasons: 1) to ensure Galaxy's books and records accurately reflect shareholdings for regulatory and operational purposes, including maintaining contact with shareholders regarding proxy voting, dividends, or other corporate actions; and 2) to comply with important anti-money laundering and counter-terrorist financing laws and regulations. On-chain equity tokenization structures that do not incorporate identity verification (particularly of the issuer itself) can potentially allow bad actors to hold company equity and make it difficult for token holders to truly access or exercise their true ownership of the company's shares. What if I lose my wallet keys? As Galaxy's digital transfer agent, Superstate maintains books and records containing all ownership information for on-chain GLXY, including holders, transfer history, and any transaction history. If an on-chain GLXY holder loses access to their wallet, that investor can request that the digital transfer agent cancel and reissue the tokenized shares to a new wallet. Note: Superstate can recover on-chain GLXY shares if you lose access to your wallet and keys; however, other assets (such as permissionless assets like SOL) cannot be recovered by Superstate or Galaxy if your wallet keys are lost.
To our knowledge, GLXY is the first US stock to exist and trade on a public blockchain. On-chain GLXY tokens represent Galaxy Class A common stock and have all the same rights as other forms of stock, such as shares in a traditional brokerage account.
Other structures, such as those relying on special purpose vehicle (SPV) wrappers or synthetic models, do not typically represent direct claims on the underlying stock issuer. Instead, they represent derivatives or shares of a special purpose vehicle (SPV), which may itself hold shares of the underlying stock. These "wrapped equity tokens" are often issued by offshore SPVs and are not subject to US securities laws and regulations. If wrapped equity token holders have rights against the issuer, such as voting rights in corporate governance, the right to receive dividends, or the right to participate in other corporate actions, these rights may be limited to the special purpose vehicle itself, not the underlying issuer. Whether wrapped equity token holders retain any continuing rights against the underlying issuer will depend on any contracts or obligations entered into or agreed upon between the token issuer and the token holders. When will tokenized GLXY be available for trading in DeFi applications? We believe this is the first time a US-listed company has allowed its shares to exist as tokens on a public blockchain. This achievement is the result of significant technical and regulatory effort by Galaxy and Superstate, but it is only the first step. While Superstate users can currently trade GLXY on-chain in a peer-to-peer manner, we have not yet enabled GLXY trading in DeFi applications, such as automated market makers (AMMs). Just as Galaxy can track and limit on-chain transfers of GLXY to Superstate users, it can also block or control which AMMs these tokens can interact with. We anticipate allowing deposits and withdrawals of our tokens into AMM pools once regulatory clarity is sufficient. Since these are actual shares of Galaxy Class A common stock, there are practical regulatory considerations. Will on-chain shareholders of tokenized GLXY be subject to maximum extractable value (MEV) limits? Because Galaxy's token contract requires all addresses to be on an "allow list" to hold our on-chain shares, unknown third parties, including MEV bots, cannot interact with the tokens. Therefore, our on-chain shares are immune to front-running, scalping, sandwich attacks, or other MEV attacks by unknown third parties unless they cooperate with Superstate and pass Superstate's KYC review. Can my broker help me interact with tokenized GLXY shares? Galaxy does not restrict any party from joining Superstate to buy, sell, hold, or transfer its tokenized shares unless that party fails to successfully pass Superstate's identity verification process (as described above). Like any entity, market intermediaries (including broker-dealers) can join Superstate. However, given limited regulatory guidance, it is unclear which registered broker-dealers or financial advisors currently engage in widespread activities involving tokens (whether securities or non-securities), and therefore it is possible that no institutions are currently able to provide services related to on-chain securities.
In the absence of broker-dealers, on-chain stock markets will be primarily self-custodial by investors, ultimately enabling direct interaction with decentralized trading protocols without intermediaries. We are working with the US SEC to improve existing securities laws to enable existing intermediaries to interact with public blockchains, but it is unclear when this will occur.
Holders of tokenized GLXY can contact Superstate at any time. Since all holders must create an account with Superstate during the registration process, on-chain shareholders can simply log in to their Superstate account and contact our digital transfer agent. If unavailable for any reason, on-chain shareholders can always contact [email protected], just like any other Galaxy stockholder.
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