> For the complete documentation index, see [llms.txt](https://docs.usefarlight.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.usefarlight.com/assets/stock-tokens.md). # Stock Tokens as loan collateral What a Robinhood Stock Token is, how it behaves on-chain, and why those properties let Farlight accept it as loan collateral. Seen from a distance a Stock Token looks like a share. Up close it is something more specific: a claim on a regulated issuer, mirrored one for one by a share in custody, moving around the clock as an ordinary ERC-20 with a Chainlink price attached. Those four properties are the reason a lending market can be built on it, and the reason Farlight runs on Robinhood Chain, the network where these tokens live. ## The token in outline | Property | Detail | | ------------------------------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | Issuer | Robinhood Assets (Jersey) Ltd | | Legal form | A tokenised **debt security**. The holder has a claim against the issuer that tracks the underlying share; the holder does not own the share itself. | | Backing | One share in US custody for each token | | Standard | ERC-20 with 18 decimals, extended with the ERC-8056 corporate-action interface | | Availability | More than 120 countries | | Transfer restrictions on-chain | **None.** No allowlist, no transfer hook and no on-chain freeze function appear in the documentation. Robinhood applies eligibility inside its own UI and at KYC-checked primary issuance and redemption. | | Price source | Chainlink Data Feeds (24/5), with Data Streams carrying market status. The ERC-8056 multiplier is already applied in the quoted price. | ## Corporate actions through ERC-8056 Each Stock Token exposes `uiMultiplier()`, which reports how many underlying shares one token represents. A dividend is reinvested and the multiplier goes up. A stock split is expressed through the same number. For a collateral asset this is a good arrangement in three ways. * **Dividends accrue inside the collateral.** A borrower's escrowed tokens gain value by themselves. There is no dividend token to claim, to hold in escrow, or to argue about. * **Splits pass through untouched.** The multiplier is part of the Chainlink price, so the protocol continues to value collateral correctly across a split without anyone intervening. * **Accounting at share level.** `PriceGate` reads `uiMultiplier()` alongside the price. That is what lets the Observatory, the public loan explorer, show a position as both a token count and a share count. During a split, merger or similar event the Chainlink feed sets `oraclePaused()`. Farlight reacts by refusing new borrowing and liquidations on that token until the flag is cleared. Repayment is never blocked. ## No compliance logic on the token Because nothing on-chain restricts transfers, a Stock Token can end up in any wallet, including one that Robinhood's own screening would have refused. Farlight therefore runs its own eligibility checks at the boundary of the protocol through the [access registry](/architecture/eligibility.md). Origination, supply and refinance each pass through it, as does every address that receives collateral out of a liquidation or a repayment. If Stock Tokens later gain ERC-7943 (uRWA) or ERC-3643 hooks, the escrow contract is ready: it already calls `canTransfer` and `canReceive` defensively. In that case the issuer would need to allowlist the escrow. See [Collateral on the roadmap](/assets/future-collateral.md). ## What the issuer adds to the risk Every loan secured by Stock Tokens carries two risks that come from the issuer rather than from the market. The protocol prices both rather than ignoring them. * **Issuer credit.** To hold the token is to hold a debt claim on Robinhood Assets (Jersey) Ltd. If the issuer failed, the token's value would rest on what could be recovered from custody, not on the share's trading price. Tier LTVs are set with that outcome in mind, and wherever a proof-of-reserve feed exists, Telemetry, the public risk page, shows the issuer's status. * **The right to freeze.** The issuer's terms let it suspend, freeze or restrict tokens in defined circumstances, even though the public documentation shows no on-chain freeze function. Before a listed Stock Token's market opens, its deployed bytecode is inspected for pause, freeze, blacklist and forced-transfer roles, and the finding is published on the risk page. Any such role is treated as a tail risk and reflected in the LTV and in the per-token cap. The full treatment is in [Issuer exposure on Stock Tokens](/risk/issuer.md). ## Which tokens are accepted Tokenised SPY, QQQ, AAPL, MSFT and NVDA make up Tier A. The complete mapping of tokens to tiers is in [Collateral tiers and LTV limits](/assets/collateral-tiers.md). --- # Agent Instructions This documentation is published with GitBook. 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