Stock vaults
A stock vault pairs a tokenized stock, such as NVDA, with USDG. It works like any other vault, with a few differences that come from the stock token.
What a stock token is
The stocks on Robinhood Chain are Stock Tokens, issued by Robinhood Assets (Jersey) Limited. Each one follows the price of a US share or fund.
A Stock Token isn't the share itself. Legally, it's a debt security from the issuer. Its value follows the share, but it gives you no rights in the company, such as a vote. If the issuer ever went bankrupt, an independent agent would sell the shares behind the tokens and pay the proceeds to token holders.
Robinhood's Stock Tokens page has the full details.
Who can hold them
Robinhood doesn't offer Stock Tokens to US persons, and restricts them in other countries too, including Canada, the United Kingdom and Switzerland. Before you deposit into a stock vault, check that you're allowed to hold Stock Tokens where you live.
What's different about them
Trading hours
Stock Tokens trade onchain around the clock, weekends included. But market makers can only create or redeem them from Monday 02:00 to Saturday 02:00, Central European Time, and the stock market itself closes at night and at weekends.
Outside market hours, trading in a stock vault's pool is often thinner, and the token's price can drift away from the last stock price. When the market opens, it can jump to catch up. A jump like that can take the price out of a vault's range in one go.
Ranges are often narrow
Stock prices usually move less in a day than most crypto, so the agent often gives stock vaults narrower ranges. That earns more per trade, but a smaller move is enough to take the price out. See Price ranges.
Dividends and splits
A Stock Token handles dividends and splits with a multiplier: a number in the token that says how much of a share each token stands for. The number of tokens you hold never changes.
- Dividends are reinvested. When the company pays one, the multiplier goes up, so each token stands for a little more of the share.
- Splits change the multiplier, not your balance, so a split doesn't make the token's price jump.
So after a dividend or a split, one token no longer equals exactly one share, and its price differs from the share price by the multiplier. A vault just holds the token, so the dividends on the part of the vault that's in the stock come to you automatically, through the token's price.
Pauses and blocked addresses
Robinhood can pause a Stock Token, or block an address from receiving it. A withdrawal pays out both of a vault's tokens at once. So while the stock token can't move, the whole withdrawal waits, the USDG half included. It goes through once the token moves again.
The same goes for USDG: Paxos, its issuer, can freeze it for an address.
Finding stock vaults
In the app, open Vaults and choose Stocks. Stock vaults also carry a Stock label in the list.