The way people invest is now increasingly flexible, especially with the advent of blockchain-based digital assets, such as xstocks.

Previously, to buy technology stocks like Coinbase, investors had to go through a stockbroker and adhere to limited stock exchange trading hours. Now, a new alternative has emerged in the form of tokenized stocks that can be accessed directly through crypto platforms.

One example is COINX, a token that represents Coinbase shares in digital form. But how does buying “shares” through crypto actually work?

In this article, we will discuss what COINX is, its mechanisms, and its position compared to Coinbase shares.

What Is COINX?

COINX is Coinbase’s tokenized stock, a blockchain-based digital asset that represents Coinbase shares (COIN).

This asset is often categorized as a Real World Asset (RWA) because its value mirrors that of a real asset, namely Coinbase shares.

However, COINX is not a direct stock because it does not provide the rights of a stockholder. On the other hand, COINX is also not a regular crypto because its price only follows the movement of the underlying stock.

How COINX Works on the Blockchain

Simply put, COINX functions as a token on the blockchain that tracks Coinbase’s stock price. The process is as follows.

1. Token Purchase

COINX is purchased through a crypto platform without the need for a brokerage account. This token is available in SPL (Solana) and ERC-20 (Ethereum) formats, allowing it to be traded like any other crypto asset, even 24/7.

2. Backing Asset

Each COINX is backed 1:1 by real Coinbase shares held in a regulated custodian. This model ensures the token’s value remains linked to a real-world asset.

3. Price Tracking

COINX functions as an asset that tracks Coinbase’s stock price, similar to a derivative instrument. Therefore, its price is designed to follow Coinbase’s stock movements on the stock market. Therefore, profits or losses are derived from changes in the stock price, not from the token’s utility itself.

Differences Between COINX and Coinbase Stock (COIN)

Although both are related to Coinbase, COINX and COIN stock have quite fundamental differences, including the following.

1. Ownership

When purchasing COIN, investors actually own a small portion of the company. Meanwhile, COINX only provides exposure to its stock price movements, without direct ownership.

2. Investor Rights

COIN stockholders have the potential to receive rights such as dividends and voting rights in company decisions. Conversely, COINX does not provide these rights as it only functions as a price tracker.

3. Regulation

COIN is traded on a stock exchange and is subject to capital market regulations. On the other hand, COINX operates within the crypto ecosystem but is still developed with compliance with applicable regulations in mind.

4. Trading Hours

COIN trading is limited to stock exchange hours. Meanwhile, COINX is more flexible because it can technically be traded almost 24 hours a day, although liquidity can vary.

COINX Advantages

COINX offers a new way to gain exposure to Coinbase stock with a more practical approach.

This asset can be accessed directly through a crypto platform without the need to open a stockbroker account like in traditional markets.

In terms of flexibility, COINX can be traded almost around the clock because it runs on the blockchain, so it is not tied to exchange hours.

Furthermore, COINX also allows small holdings, allowing you to still gain exposure to Coinbase stock without having to purchase a full share.

More interestingly, because it is an on-chain asset, COINX can be connected to the DeFi ecosystem. This means this token can be used not only for trading but also for further use, for example, as collateral for lending services on certain platforms.

Risks and Things to Consider

Despite offering flexibility, COINX, linked to Coinbase, still carries several significant risks. Here are some of these risks and things to consider.

1. Custody Risk

COINX relies on the issuer and custodian holding the original shares as collateral. This means there is additional risk if problems arise with the asset manager.

2. Regulation

Regulations regarding tokenized stocks are still not uniform across countries. This can impact access, legality, and even investor protection.

3. Tracking Error

Although designed to track Coinbase’s stock price, COINX’s price movements are not always identical because it is traded on crypto markets using different mechanisms.

4. No Stock Rights

Holding COINX is not the same as owning actual shares, unless there are special mechanisms from the issuer. There are no voting or dividend rights, as it functions solely as a price tracker.

COINX’s Role in the Real World Asset (RWA) Trend

As an asset linked to Coinbase stock, COINX serves as an example of how the RWA concept is starting to be applied in the crypto world. Here are some of its roles in the RWA trend.

1. Accessing Stocks via Crypto

COINX acts as a bridge between the stock and crypto markets, allowing access to stock price movements without having to log into a traditional brokerage system.

2. TradFi and Crypto Integration

COINX reflects an effort to unite two worlds: traditional finance (TradFi) and blockchain, by presenting stock assets in the form of tokens that can be traded on-chain.

3. The Future of Investment

COINX’s presence indicates a new direction in investment, where real assets such as stocks can be tokenized, making them easier to access, trade, and integrate into the digital ecosystem.

Who is Suitable for COINX?

CoinX, linked to Coinbase stock, is more suitable for users already familiar with the crypto ecosystem.

For example, crypto investors can use COINX to gain exposure to stocks without having to leave their usual platform or open a brokerage account.

For DeFi users, COINX is also attractive because it can be used as an on-chain asset, including for purposes such as collateral for loans or other financial strategies, depending on platform support.

Furthermore, traders who prioritize time flexibility are likely to find it suitable because COINX can be traded almost around the clock without the restrictions of exchange hours.

Conversely, COINX is not a prime choice for conventional stock investors seeking direct ownership, dividends, or voting rights, as this token only functions as a price tracker, not a representation of company ownership.

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Conclusion

So, that was an interesting discussion about COINX as a new way to access Coinbase shares through crypto, which you can read more about in the INDODAX Academy’s Crypto Academy.

In conclusion, COINX is essentially a new way to “bring” Coinbase shares into a blockchain format. This instrument is not a stock in the sense of direct ownership, but rather a price representation packaged in token form.

This difference may seem subtle, but it impacts investor rights, regulatory structures, and how the assets are traded.

On the one hand, COINX opens up an alternative for investors already familiar with the crypto ecosystem to access stock movements without having to go through the capital markets.

On the other hand, this model still has limitations, such as dependence on custodians, potential price discrepancies, and the lack of shareholder rights.

In a broader context, COINX reflects a shift in the way financial assets are accessed and distributed.

Tokenized stocks are not simply a new product, but part of the evolution of digital investment that is beginning to connect the traditional financial system with the blockchain.

FAQ

1. What is COINX?
   COINX is a tokenized stock that represents Coinbase shares on the blockchain to track their price movements.
2. Is COINX the same as Coinbase stock?
   No. COINX only provides price exposure, not share ownership.
3. Does COINX pay dividends?
   Not always, depending on the platform or issuer.
4. What are the advantages of COINX?
   More flexible access, can be traded almost 24/7, and supports small denominations.
5. What are the risks of COINX?
   These include custodial risks, regulatory risks, and potential price differences with the original stock.

Author:  Boy