How Issuers Back Their Tokens and Which Tokens Spout Accepts
Spout does not issue tokenized stocks. It works with tokens issued by approved third party issuers.
How backing works
The issuer buys the share
It buys the share through a broker.
A custodian holds it
The share sits in an account for the issuer.
The issuer creates tokens
It creates tokens on Solana for the shares bought, and sends them to the buyer.
Redemption works in reverse
The token is destroyed and the share is sold, or delivered, under the issuer's terms.
What Spout checks before accepting a token
A token can sit in a Spout pool only if its design lets the pool hold it safely. Spout's program checks a token's design before accepting it, and refuses tokens with any of these features:
| Feature Spout refuses | Why |
|---|---|
| A fee charged on every transfer | The pool would receive less than was deposited |
| Tokens that cannot be transferred | They could not move into or out of the pool |
| Interest that changes balances automatically | The pool's accounting would drift |
| An issuer power to move tokens out of any wallet | It could take collateral out of the pool |
| New accounts frozen by default | The pool could not receive deposits |
On top of the technical checks, each asset needs a reliable price feed, a deep listed options market for the underlying stock, and an approved issuer. Only assets that pass all of these appear in Supported Assets.