Evgeny Gaevoy, a partner at Re7 Capital, flagged a structural trap in tokenized stock products: investors gain price exposure but forfeit dividend rights because their holdings are anchored to offshore debt instruments, not direct equity.
The mechanism is simple but brutal. Tokenized stock buyers don't own the underlying shares. Instead, they hold a debt instrument issued by an offshore entity that tracks the stock's price. The separation is deliberate—and it matters.
This structure creates a critical gap. Direct equity ownership grants voting rights and a claim on company earnings, including dividends. Debt instruments do not. When the underlying company declares a dividend, token holders see nothing—the cash flows to the debt issuer, not through to the token holder.
The price will track the stock's moves. The total return profile will not. A holder collecting 3 percent annual dividends in traditional equity loses that stream entirely in the tokenized version. Over years, the drag compounds.
Gaevoy's call matters because not all tokenized securities are built the same way. Some represent direct equity claims with full rights intact. Others are synthetic derivatives. And some—like these—are pure debt wrappers. The legal structure, not the marketing, determines what you actually own.
For investors evaluating tokenized stock products, the due diligence is non-negotiable: read the prospectus, identify whether the token represents direct equity or a debt instrument, and price in what you're giving up. A low trading fee on a tokenized stock means nothing if the structure strips your upside.
