Robinhood memecoins <> Stock Tokens ELI5 >> The tokenized stock = base asset >> The memecoin = a speculative wrapper that routes demand through it 1. How Robinhood tokenized stocks actually work • Stock Tokens (e.g. $NVDA or $HIMS) are ERC-20s issued by Robinhood Assets • They give economic exposure to the real NYSE stock but are legally debt securities, not shares • You do not own HIMS stock, have no voting rights, and cannot redeem for the actual shares yourself 2. How stock tokens are minted • Only Authorized Participants (KYB-onboarded partner market makers) can mint or burn tokens directly with the issuer • Regular users can only buy and sell existing tokens on secondary venues: Uniswap AMMs, fomo app • The market maker buys the real shares in the traditional market (NYSE hours only) • They then request the issuer to mint the matching number of on-chain tokens (1 token ≈ 1 share) • The new tokens are sent to the MM’s wallet and sold into on-chain pools (HIMS/USDG, HIMS/BONER, etc.) to keep the token price close to the real stock 3. Float squeeze • Because minting requires buying the actual shares on the stock market, it can only happen while the stock market is open • During market close / weekends the on-chain float is frozen (whatever tokens already exist is the entire supply until market opens) • MMs decide when to mint by watching the on-chain HIMS.RH x USDG pool versus the NYSE price • If the token trades at a meaningful premium, they mint and sell. If it trades at a discount they can buy tokens and burn them • Off-hours they cannot do this, so premiums can balloon (this was what happened ytd with HIMS and AMC) 4. How a memecoin paired with the tokenized stock works (BONER <> HIMS) • When someone buys $BONER, most sizeable buys route USDG → HIMS.RH pool first, then HIMS.RH → BONER pool • Important: every net buy of BONER = creates a buy of tokenized HIMS • Those HIMS tokens get locked inside the BONER/HIMS LP as the other side of the pair. The circulating on-chain float of HIMS shrinks • BONER’s dollar price is (BONER per HIMS token) × (current HIMS.RH dollar price) • If HIMS.RH is trading at a huge premium, BONER’s “market cap” is inflated by that phantom premium 5. Off-hours / weekend events (what happened with both AMC and HIMS) • Demand for the memecoin keeps sucking HIMS tokens into the LP • The remaining HIMS/USDG pool becomes extremely thin. • Tokenized HIMS price opens far above the Friday NYSE close because nobody can mint new tokens (the memecoins like BONER looked like it is pumping hard in dollar terms) • Then when the market re-opens, partner MMs buy real HIMS shares, mint fresh tokens, and dump them into the on-chain pools (which obv the premium will collapse) • BONER holders lose in USD terms even if the BONER/HIMS ratio itself stays strong or keeps rising • LP providers can theoretically pull liq and sell the HIMS tokens to help close the premium, but the dominant new-supply source is still the authorized MMs 6. What every memecoin<>stock token’s plans are • Key goal is to squeeze the shorts on the token pairing • Degens buy memecoin → the pool “sucks” the tokenised stock tokens out of circulation and locks them as LP • Persistent demand for the memecoin forces MMs to keep minting more tokenised stock tokens during market hours • Each mint corresponds to Robinhood (or its partners) buying and vaulting a real stock • Some stocks have large short interest and over time the growing pile of vaulted/on-chain tokens is supposed to tighten the real-world float available to shorts 7. Important to note • All the on-chain stock supply is tiny compared with the actual stock • Minting currently has negligible impact on the real stock price or short squeeze dynamics unless the memecoin demand grows insanely large