2️⃣ Where do the “real shares” sit?
This is the most important question.
There are only a few possibilities:
Model A:
Shares remain at DTC (most likely, initially)
-Shares are held in Cede & Co (
@DTCC nominee)
-Tokens represent claims on broker-held inventory
-Lending, rehypothecation, and internalization can STILL occur
In this model:
-Tokens are not supply-constraining
-Shorting mechanics remain intact
-You can still have more claims than shares
This is tokenized exposure, NOT tokenized ownership.
Model B:
Shares are removed from DTC and immobilized
-Shares are withdrawn from DTC
-Placed in a special-purpose trust or issuer-controlled ledger
-Lending disabled at the source
-Tokens issued only against immobilized shares
This is the ONLY model where 1 token = 1 share is enforceable.
It is also:
-legally complex,
-operationally disruptive,
-and directly challenges the current DTCC model.
Nothing in the NYSE announcement or SEC’s statements guarantees this model. PROVE ME WRONG.
Model C:
Synthetic reference model
-No direct share backing
-Tokens settle against net obligations
-Similar to CFDs or swaps (but exchange-run)
This would be the WORST case for retail, because:
1. supply is elastic,
2. price discovery decouples from issuance, and
3. settlement risk increases.
Again, the NYSE announcement does not clearly rule this out.