The Token Identity Crisis

For more than a decade, the crypto industry has been building elaborate workarounds for a simple problem: tokens aren’t shares. They can govern a protocol, unlock a discount, signal membership in a community but they cannot, in most jurisdictions, entitle the holder to a dividend, a vote on the board, or a claim if the company goes bust. 

The conversion

The most dramatic move landed on 17 August, when Bhaji Illuminati — chief executive of Centrifuge Labs and a board member of the Centrifuge Network Foundation — posted CP172 to the project’s governance forum. Centrifuge, among the earliest tokenisation platforms with more than $2 billion in real-world assets tokenised to date, asked its community to consider converting its CFG governance token into equity.

The mechanics, if approved, would see the non-profit foundation behind Centrifuge re-registered as a Cayman Islands exempted company. Every CFG holder would be offered a voluntary swap: one share for each token transferred. Holders of 100,000 CFG or more would enter the share register directly; smaller holders would participate through an intended arrangement with CoinList.

The proposal is framed as a question and sits at the request-for-comment stage, with a 14-day feedback window, which ends 1 September, and a tokenholder vote promised but not yet scheduled. Centrifuge reasons that the token structure is blocking institutional capital. And now, shifting regulatory attitudes give tokenholders a credible route to becoming actual shareholders.

The community response has been pointed. Within days, roughly 37 posts appeared on the forum thread, with recurring demands for an independent valuation behind the one-for-one conversion ratio, a fully diluted cap table, defined shareholder rights, a liquidity plan for the resulting shares, clarity on KYC and jurisdictional eligibility, and what happens to unconverted CFG. A community founded in the heyday of decentralisation is now haggling over the terms of a corporate restructuring.

The promise

Backpack, the exchange and wallet business founded in 2022 by Solana developer Armani Ferrante, is navigating the same boundary from the opposite side, by promising tokenholders future ownership.

The BP token launched on 23 March, 2026 with a total supply of one billion. Notably, founders, employees and venture investors received no token allocations — they hold company equity instead. Customers who stake BP for at least one year earn the right to exchange those tokens for equity if Backpack reaches an IPO, acquisition or comparable exit.

Interestingly, if every eligible token were staked for the full period, participants would collectively reach 20 percent of company equity — 12.5 percent base plus a 7.5 percent bonus. A token that converts into shares sits close to the definition of a security under most frameworks, but Backpack’s architecture reads as a deliberate effort to keep BP itself on the right side of that line. Whether regulators read it the same way is untested.

Either way, it’s a clear example of crypto founders aligning their incentives with tokenholders. In this case, Backpack founders will drive value to business equity but still give tokenholders a right to participate in the success of the protocol, deftly managing the fine line between a traditional definition of a security and their experimental process.

The register

Figure has taken the most radical approach of the three: dispensing with the token entirely.

Listed on Nasdaq under FIGR since September 2025, Figure announced the On-Chain Public Equity Network (OPEN) in January 2026 — a system that lets companies issue equity natively on the Provenance Blockchain. Actual shares, registered on-chain.

Figure became OPEN’s first issuer on 19 February, launching FGRS, which it says is the first SEC-registered public equity issued and settled natively on blockchain infrastructure. FGRS is a distinct series, Series A Blockchain Common Stock, that ranks equally with Figure’s Nasdaq-listed Class A shares for dividends and liquidation, carries one vote per share, and converts one-for-one into Class A stock at the holder’s election. 

The offering is emblematic of the type of regulatory gymnastics that blockchain companies perform to remain on the right side of legislators, often leaving retail products further down the line. For Figure, trading can happen around the clock, but only on Figure’s SEC-registered alternative trading system. So it can’t access the benefits of being on a national securities exchange, or public blockchain.

However, the system does retain some of the benefits pioneered by crypto protocols such as settlement in YLDS, Figure’s SEC-registered yield-bearing stablecoin. And shareholders can borrow against or lend out their stock through Democratized Prime, Figure’s on-chain lending marketplace. 

Three answers, one question

Tokenisation started by putting traditional assets — loans, fund units, treasuries — on blockchains so they could settle faster, trade beyond market hours and plug into on-chain lending. Wrappers around things that existed elsewhere. Now, the underlying asset is ownership of the company itself, and the blockchain is the register.

It’s not here yet. Centrifuge’s community could reshape or reject CP172 entirely. Backpack’s equity rights are conditional, non-voting and untested against a real exit. Figure’s market operates inside a permissioned environment whose liquidity depth remains unproven.

But increasing regulatory clarity, such as this week’s crypto rule proposals from the SEC, allows solutions. These three projects are part of a conversation between crypto users, founders, and regulators towards creating the clarity of equity ownership onchain.