The Token Identity Crisis
Three blockchain projects are redefining token roles: Centrifuge proposes converting governance tokens to equity, Backpack offers token-to-share conversions upon exit, and Figure issues SEC-registered blockchain-based shares.
Centrifuge, a tokenisation platform with over $2 billion in real-world assets, has proposed converting its CFG governance token into equity through a voluntary swap. The plan involves re-registering the foundation as a Cayman Islands exempted company and offering one share per token. Holders of 100,000 CFG or more would receive shares directly, while smaller holders would participate via CoinList. The proposal, currently in a 14-day feedback window ending 1 September, aims to attract institutional capital but has sparked debate over valuation, shareholder rights, and liquidity plans among tokenholders accustomed to decentralisation.
Backpack, a Solana-based exchange founded in 2022, has introduced the BP token, which offers tokenholders the potential to convert staked tokens into equity upon an IPO, acquisition, or similar exit. The BP token, with a total supply of one billion, excludes founders, employees, and venture investors from allocations, who instead hold company equity. Stakers for at least one year could collectively reach 20% of company equity, including a 7.5% bonus. While designed to avoid regulatory classification as a security, the approach tests the boundaries of token and equity definitions, aligning founder and tokenholder incentives.
Figure, listed on Nasdaq under FIGR, has launched the On-Chain Public Equity Network (OPEN), enabling companies to issue SEC-registered equity natively on the Provenance Blockchain. Figure became the first issuer on 19 February with FGRS, a Series A Blockchain Common Stock that converts one-for-one into Nasdaq-listed Class A shares. FGRS carries voting rights and equal dividend and liquidation preferences, with trading restricted to Figure’s SEC-registered alternative trading system. The system leverages Figure’s yield-bearing stablecoin, YLDS, for settlement and offers on-chain lending via Democratized Prime, though liquidity depth remains unproven.
These initiatives reflect a broader shift in crypto, where projects are exploring how to reconcile decentralisation with enforceable ownership rights. Centrifuge’s proposal, Backpack’s conditional equity rights, and Figure’s on-chain shares each address the gap between tokens and traditional equity, responding to increasing regulatory clarity such as the SEC’s recent crypto rule proposals. While none of these models are fully tested, they represent a conversation among users, founders, and regulators about defining and securing on-chain ownership.