Tokenized Stock Basics

Welcome to the world of tokenized stocks! This chapter will introduce you to all the essential basic concepts, enabling you to start trading safely and confidently.

🎯 Learning Objectives

After completing this chapter, you will be able to:

• Understand the basic concepts of tokenized stocks
• Master the fundamentals of blockchain and DeFi
• Learn about different types of wallets and trading platforms
• Identify major risks and security considerations
• Prepare for actual trading

📚 Core Concepts

What are Tokenized Stocks?

Tokenized stocks are digital representations of traditional stocks on the blockchain. They maintain a 1:1 value peg with real stocks through smart contracts.

Simple Analogy: Imagine traditional stocks as paper stock certificates, while tokenized stocks are the digital version of these certificates, stored on the blockchain.

Core Features:

• 🕐 24/7 Trading: Not limited by traditional stock market hours
• 💰 Fractional Investment: Can purchase less than 1 share
• ⚡ Instant Settlement: Trades complete immediately, no T+2 waiting
• 🌍 Global Access: Can trade from anywhere
• 🔗 DeFi Integration: Can participate in lending, liquidity mining, etc.

Tokenized vs Traditional Stocks

Feature	Traditional Stocks	Tokenized Stocks
Trading Hours	Mon-Fri 9:30-16:00	24/7
Minimum Purchase	1 share (e.g., TSLA $200+)	Any amount (e.g., $10)
Settlement Time	T+2 (2 business days)	Instant
Global Access	Need local broker account	Only need wallet
Shareholder Rights	Voting rights, dividends	Usually only price exposure
Regulation	Traditional financial regulation	Cryptocurrency regulation
Storage	Broker custody	Self-custody

🔗 Blockchain Basics

Blockchain is a distributed ledger that records all transaction information.

Key Concepts:

• Decentralization: No single point of control
• Transparency: All transactions are publicly viewable
• Immutability: Historical records cannot be changed
• Smart Contracts: Self-executing programs

Major Blockchain Networks:

Ethereum

• Features: Largest smart contract platform
• Advantages: Most complete ecosystem
• Disadvantages: High gas fees
• Representative Projects: Uniswap, Backed Finance

Solana

• Features: High-performance blockchain
• Advantages: Extremely low transaction fees (~$0.001)
• Disadvantages: Relatively new, occasional network issues
• Representative Projects: Jupiter, Raydium

Polygon

• Features: Ethereum sidechain
• Advantages: Low fees, Ethereum compatible
• Disadvantages: Security depends on Ethereum
• Representative Projects: QuickSwap

💼 Wallet Basics

What is a Crypto Wallet?

Crypto wallet is a tool for storing and managing your digital assets. It actually stores private keys, not the tokens themselves.

Important Concepts:

• Private Key: Password that proves asset ownership
• Public Key/Address: Address for receiving assets
• Seed Phrase: 12-24 words for wallet recovery

Wallet Types

Hot Wallets (Software Wallets)

Features: Connected to internet, convenient for trading

Recommended Wallets:

1. MetaMask

   • Supports: Ethereum, Polygon
   • Pros: Most popular, good compatibility
   • Cons: Only supports EVM chains
   • Suitable for: Ethereum ecosystem users

2. Phantom

   • Supports: Solana
   • Pros: Good user experience
   • Cons: Only supports Solana
   • Suitable for: Solana ecosystem users

3. Trust Wallet

   • Supports: Multi-chain
   • Pros: Mobile-friendly
   • Cons: Relatively simple features
   • Suitable for: Mobile users

Cold Wallets (Hardware Wallets)

Features: Offline storage, high security

Recommended Products:

1. Ledger Nano S/X

   • Supports: 1000+ coins
   • Pros: High security, wide support
   • Cons: Higher price ($60-120)
   • Suitable for: Large fund storage

2. Trezor

   • Supports: Multiple mainstream coins
   • Pros: Open source, secure
   • Cons: Relatively fewer supported coins
   • Suitable for: Open source focused users

Wallet Security

Basic Security Principles:

1. Backup Seed Phrase

   • Write on paper, don't screenshot
   • Store in a safe place
   • Make multiple backups
   • Never share online

2. Verify Addresses

   • Carefully check addresses before sending
   • Use address book feature
   • Send small test amounts first

3. Protect Private Keys

   • Don't enter on unsafe devices
   • Use hardware wallets for large funds
   • Regularly update wallet software

🏢 Trading Platform Types

Centralized Exchanges (CEX)

Features: Operated by companies, similar to traditional brokers

Advantages:

• Good user experience
• High liquidity
• Customer support
• Convenient fiat on/off ramps

Disadvantages:

• Require KYC verification
• Custodial fund risks
• May face regulatory restrictions

Representative Platforms:

• Kraken: Established exchange, regulatory compliant
• Binance: World's largest, diverse offerings
• Coinbase: US public company, strong compliance

Decentralized Exchanges (DEX)

Features: Based on smart contracts, no intermediaries

Advantages:

• No KYC required
• Self-custody of funds
• Censorship resistant
• High transparency

Disadvantages:

• Complex user experience
• Gas fees
• Smart contract risks
• Potentially insufficient liquidity

Representative Platforms:

• Uniswap: Ethereum's largest DEX
• Jupiter: Solana aggregator
• Raydium: Solana AMM

⚠️ Risk Warnings

Major Risks

• Price Volatility: Tokenized stock prices may fluctuate significantly
• Technical Risk: Smart contracts may have vulnerabilities
• Regulatory Risk: Policy changes may affect trading
• Liquidity Risk: May be difficult to buy/sell at certain times

Security Recommendations

• Only invest funds you can afford to lose
• Diversify investments, don't put all funds in one basket
• Regularly learn and update knowledge
• Stay cautious, avoid FOMO (Fear of Missing Out)

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Next Step: Now that you've mastered the basics, you can continue learning specific trading platform tutorials!