What Financial Derivative Is Most Analogous to a Security Token?
A security token is most analogous to an equity derivative, specifically a share of stock, or a fractional interest in an underlying asset. Security tokens can represent ownership in real-world assets like real estate or art, or in the equity of a company, similar to how a stock certificate does.
The token simply digitizes and fractionalizes this traditional financial instrument on a blockchain, offering programmable features and enhanced liquidity.
