In early July, the well-known brokerage Robinhood announced its stock tokenization plan, which caused heated discussions. In addition, they also announced that they would open equity derivatives of two private companies, OpenAI and SpaceX. But before them, on June 25, the crowdfunding investment platform Republic announced that it would issue Mirro Tokens linked to the performance of the unlisted stocks of SpaceX, Elon Musks aerospace company. In addition, there are dozens of well-known unlisted companies on the list.
What is the difference between the mirror tokens of this nearly 10-year-old crowdfunding platform and Robinhoods equity derivatives? How can we find some opportunities on them?
What is Republic?
Founded in 2016 and headquartered in New York, Republic is a financial technology platform focused on private equity and alternative asset investments. Its core concept is to open up investment opportunities for non-listed companies to retail investors and significantly reduce the threshold for ordinary investors to participate in risky assets through compliance innovation and technical means. Since the era of equity crowdfunding implemented by the JOBS Act, Republic has developed a full-stack private investment ecosystem covering multiple asset classes after 9 years of exploration.
Its structure includes Republic Crowd Invest, a crowdfunding financing platform for startups and small projects, which operates based on the US Regulation Crowdfunding (Reg CF) and other rules; Republic Crypto, which provides investment, financing and consulting services in the blockchain field, acquired the regulated digital asset trading platform INX with a maximum valuation of US$60 million; Republic Capital, a venture capital department focusing on early-stage project investments in the fields of Web3, artificial intelligence, games, and financial technology; and Republic Real Estate, which uses an SPV structure to hold real estate assets and allows investors to subscribe to RWA real estate projects in shares.
Through the above diversified business layout, Republic has created a closed-loop ecosystem that runs through primary market fundraising to secondary market transactions. It serves both startups (providing fundraising channels and value-added services) and global investors (providing innovative investment products and exit channels). As Republic said in its introduction, its mission is to integrate traditional finance and blockchain innovation under a compliant framework and open the originally closed private equity market to the public.
Are Mirror Tokens air?
Mirror Token is a new product category launched by Republic this year. It can be regarded as an on-chain derivative linked to the performance of private company equity. Unlike directly holding private equity, Mirror Token holders do not enjoy voting rights or ownership of the company, but obtain a tradable promissory note for the target companys future liquidity event income rights through a specially designed contract. Republic LLC and other issuing entities hold relevant interests or reference indicators of the target company on behalf of investors. When the company has an IPO, acquisition or other exit event, the Token holder will receive a cash return equal to the appreciation of the shares held according to the proportion of holdings.
For example, the value of the first batch of rSpaceX tokens launched by Republic was initially anchored to the price of SpaceX stock in the secondary market (reportedly in the range of US$225 to US$275 per share, and SpaceXs latest valuation is approximately US$350-420 billion). After investors purchase rSpaceX at this price, if the future SpaceX IPO pricing or acquisition valuation is higher than this level, Republic will return the price difference to the token holder in the form of stablecoins. At the same time, in the event of company dividends, the profits may also be distributed proportionally. However, throughout the process, investors do not need to actually hold SpaceX shares, but can obtain economic benefits that are almost equivalent to shareholders.
It should be emphasized that Mirror Token is not officially issued by the target company, nor is it endorsed by the latter. Investors do not purchase any shares or interests in SpaceX, and their claims can only be asserted against the issuer, RepublicX LLC. On July 1, Republics Co-CEO Andrew Durgee was interviewed by well-known business anchor Liz Claman on Fox News. During the interview, Liz expressed her concerns after hearing that Mirror Token did not hold shares. This makes me a little worried. It reminds me of the Brooklyn Bridge scam. She half-jokingly asked, How do you guarantee that investors are not playing with air?
Admittedly, this form sounds too much like air at first glance. In response, Republic co-CEO Andrew Durgee said, All details are disclosed in the Form C document submitted to the SEC. The entire process is fully compliant and we are regulated by FINRA and the SEC. And we have been doing this model for eight years, and no one is more experienced than us. Now we combine this mechanism with tokenization, which is an unprecedented structure.
According to the ongoing rAnthropic process, the entire path begins with Republic setting up a dedicated issuing entity (Opendeal Broker LLC in this case), which exists as a special purpose vehicle (SPV) and is responsible for carrying indirect economic rights with the target company. Republic will launch a booking page for the project on the platform, where investors register their intention but cannot actually invest.
After the reservation phase is over and the formal financing is about to start, Republic will formally submit Form C to the SEC in accordance with Regulation Crowdfunding (Reg CF), which will disclose in detail the projects financing limit, token price, contract terms, potential risks, and fund use plan and other core information. Once Form C is approved, investors can use Apple Pay, credit cards, bank transfers or USDC to pay for their investments through the Republic platform, and the funds will be temporarily kept in a third-party escrow account to ensure that they will be disbursed only after the project meets the minimum financing requirements.
After the funds are confirmed, Republic will mint a number of Mirror Tokens on the chain corresponding to the investment amount, and immediately enter a 12-month lock-up period (Reg CF). After the lock-up period, holders can choose to transfer the tokens to regulated securities secondary markets such as INX Exchange (acquired by Republic in April this year at a valuation of US$60 million) for free trading.
When the target company has an IPO, acquisition or other liquidity events, the issuance of the SPV will trigger the redemption mechanism, and return the investors profits in the form of stablecoins based on the number of Mirror Tokens held by the users. The advantage of this mechanism is that it allows global retail investors (including those in the United States) to enjoy the growth dividends of unlisted star companies to the greatest extent possible on the basis of ensuring legal compliance.
Can you still buy Figma, the highest valued tech company to go public this year, on Republic?
The current platform has opened or preheated targets including SpaceX, OpenAI, Anthropic, Epic Games and other worlds most watched unlisted giants, representing the core assets of key future industries such as space technology, artificial intelligence, and game entertainment. Among them, SpaceXs valuation in the private equity market has soared to the range of US$350 billion to US$420 billion, OpenAI and Anthropic have led the industry competition for generative AI technology and have received strategic support from technology giants such as Amazon and Google, while Epic Games has become a household name among global players with its Unreal Engine and game matrix.
Figma is worth mentioning. As a leader in collaborative design software, Figma was originally one of the targets that Republic claimed to be mirrored. As of an internal share acquisition in May 2024, Figmas valuation was approximately US$12.5 billion, a 25% increase from the 10 billion valuation in 2021. The companys annual revenue has grown rapidly, with ARR reaching US$600 million in 2024 and breaking even. However, unlike many unicorns that choose to be privately held for a long time, Figma decided to go to the public market after Adobes acquisition plan with a valuation of US$20 billion in 2023 fell through.
Figma has secretly submitted an IPO application in April 2025, and is expected to raise $1.5 billion. It may also be able to exit through an IPO soon. I don’t know if this will cause communication problems with the “intermediate equity holder” company. Although it has been promoted many times before, Figma has not appeared on the latest Mirror Token page. But Figma’s case highlights the dilemma of current unicorn companies: either they stay out of the market for a long time, which makes retail investors sigh, or they take the risk of IPO in exchange for liquidity. Regardless of the path, the emergence of platforms such as Republic provides these companies with a third option and builds a bridge between the two states for investors.
But in addition to the above companies, Republic is still actively expanding the list of investable targets. Republic has revealed plans to launch Mirror Token to cover more than 20 companies including Ramp (financial unicorn), Cursor, Perplexity (AI), Stripe (payment unicorn), Waymo (autonomous driving), etc. Some of these companies have been valued at tens of billions of dollars, while others are still in the early stages of rapid growth. Through the Mirror Token mechanism, investors may obtain corresponding benefits through Republic during the rapid development of these companies.
Robinhood VS Republic, when a financing platform meets a brokerage firm?
Robinhood and Republic both set their sights on the on-chain securitization of unlisted unicorns, but chose completely different paths. One is testing the waters in the European market outside of US regulation, while the other is maneuvering delicately within the existing US compliance framework. The difference between the two is reflected not only in technology and compliance design, but also in business strategy and target users. Republic has its own venture capital department and network of contacts, and may be able to obtain earlier and more exclusive project resources; Robinhood, with its popularity and user scale, has the potential to attract cooperation from popular companies. For investors, this means more choices, but it also tests their vision: they need to identify which companies have reasonable valuations and bright prospects among the many options.
Overseas exemptions vs. local regulation
Robinhoods stock token program is currently only open to EU users because of the extremely strict restrictions on unlisted securities investments in the United States. Only certified investors who meet the asset/income threshold can participate in private placements, and companies must also comply with information disclosure requirements. By deploying its business in Europe, Robinhood has taken advantage of the relatively loose regulatory environment there and made it possible to provide private equity exposure to ordinary users. These tokens are issued by Robinhood in cooperation with blockchain company Arbitrum, running on the Ethereum Layer 2 network, expanding trading hours to 7 × 24 hours, and plans to expand the number of tradable tokens to thousands within the year. This ambition reflects Robinhoods strategy of bypassing US regulation and leading the securities blockchain revolution worldwide.
Republic, on the other hand, takes an almost opposite approach, designing its products in full compliance with the exemptions of the current U.S. securities laws (Reg CF/D, etc.), making Mirror Tokens legally regulated securities. This means that each Republic Mirror Token must submit disclosure documents (Form C, etc.) to the SEC and be audited by FINRA. Although the single fundraising amount is limited and the lock-up period is long under the Reg CF model (which undoubtedly limits the scale and liquidity), it allows retail investors in the United States and even some overseas to participate legally. The idea of compliance first, then expansion, Republics careful grasp of regulatory red lines and deep experience (its team has been deeply involved in this field since the passage of the JOBS Act).
In contrast, Robinhood chose a fast track of regulatory arbitrage, while Republic danced in the cage of regulations. In the short term, the former has a faster pace and a larger potential market, but the compliance uncertainty is high; the latter is slightly slower, but each step consolidates the legality and lays the foundation for full promotion in the future.
Equity holding vs income bonds
Robinhoods stock token is essentially a kind of equity certificate. Robinhood holds shares of the target company by itself or through an SPV, and then issues on-chain tokens to users for holding, corresponding to a certain proportion of economic rights. According to a Robinhood spokesperson, these tokens give retail investors indirect exposure to the private market, which is supported by the SPV equity controlled by Robinhood. Therefore, it can be understood that Robinhood is playing the role of a custodial broker, and users buy a slice of income rights of Robinhoods holdings. In the future, once the target company is listed or sold, Robinhood may realize the proceeds by liquidating the SPV holdings and redistribute them to token holders.
In contrast, Republics Mirror Token is closer to a bond or contract with a pre-agreed return. It does not require Republic to hold an equal amount of underlying stocks, but only needs to pay the agreed amount when the event is triggered according to the number and proportion of token holders. Republic did not explicitly state that it would hold a full amount of underlying stocks at a 1:1 ratio. In theory, it can choose to hedge or hold part of the shares, which gives it greater flexibility.
However, this design also means that investors need to bear the credit risk of the issuer and believe that Republic will be able to perform its obligations in the future. This is also reflected in the legal nature of the relationship between the two parties and users. Under the Robinhood model, users may indirectly become trust beneficiaries with shareholder rights through the SPV, while under the Republic model, users are only creditors of Republic and have no direct legal relationship with the target company.
Robinhoods model is closer to the traditional shareholding on behalf of others, which may be more intuitive in terms of interest alignment and credibility, but may be more difficult to comply with in most countries. Republics model cleverly bypasses direct equity issuance through innovative contracts, with lower regulatory risks, but requires a higher credibility on the issuer.
Brokerage Expansion vs Private Equity Ecosystem
After experiencing the crypto bull market and the U.S. stock retail investor boom, Robinhoods user trading activity has declined in recent years. The introduction of stock/equity tokenization will help improve user stickiness and revenue sources. After the announcement of this news, Robinhoods stock price once soared by nearly 10%, setting a new high since its listing. Robinhood CEO Vlad Tenev even regarded stock tokenization as the seed of a bigger plan, claiming that several unicorn companies have expressed interest in joining the tokenization revolution.
It can be seen that Robinhoods ambition is to build a globally connected on-chain securities trading platform and upgrade its positioning from a traditional brokerage to an innovator in crypto finance. Robinhood has gained broad support from traditional financial institutions on Wall Street by virtue of its status as a listed company. Institutional investors hold 59-63% of the shares, including asset management giants such as Vanguard and BlackRock, which enables it to quickly access publicly traded stocks of former unicorn companies.
In contrast, Republics launch of Mirror Token is more like a natural outcome. Republic is a platform focused on private equity and has been serving startup financing and early investors. With the extension of the IPO winter in recent years and the delay of a large number of star startups to go public, the separation of the primary market and the secondary market has made ordinary investors feel marginalized. Republic has identified this pain point and directly opened up the IPO resources in its existing ecosystem to retail investors. Through the Mirror model, Republic can issue corresponding products without the authorization or participation of the company, allowing Republic to design investment products around popular unicorns without having to lobby these companies to raise funds on the platform. Therefore, Mirror Token is not only a product innovation for Republic, but also a breakthrough in the business model, from matching project financing to actively packaging investment opportunities for sale.
Republic has built a unique private equity ecosystem through its deep roots in AngelList Alumni (similar to Paypal Mafia, not a specific organization). Its star advisory team includes DFJ founder Tim Draper, and its investment portfolio spans Tesla, SpaceX, Coinbase and even Robinhood itself, forming a rare cross-platform influence. It also has Mark Zuckerbergs elder sister Randi Zuckerberg and Peter Diamandis, the founder of the XPrize Foundation that promotes private aerospace (such as SpaceX) and cutting-edge technology competitions, giving it relatively abundant early-stage unicorn equity resources.
Democratizing the future of investing
The current trend of the investment market is moving towards liberalization, but challenges also exist accordingly. Brokerage giants such as Robinhood have a huge existing user base and brand appeal. Once launched, their products attracted the attention of many retail investors, and even forced OpenAI to make an official statement. However, if most stock tokenization projects are similar, the challenge is that whether their model can be recognized by regulators in the long term is still unknown. The US SEC has never explicitly allowed ordinary retail investors to invest in unlisted equities.
Republic has been working closely with the SEC/FINRA for several years, and its exploration in the gray area of regulations is relatively cautious and steady. Mirror Token uses rules such as Reg CF to achieve breakthroughs, which seems to be more safe to some extent, but its upper limit of US$5,000 investment market size also restricts it quite a lot.
From the perspective of industry trends, this year, compliant crypto institutions including Kraken have also begun to launch stock token transactions for non-US users, and on-chain securities are gradually emerging. However, it will take time to improve the regulatory framework. A former SEC official once publicly stated that allowing retail investors to participate in the private equity market is the general trend, and the key lies in balancing innovation and investor protection.
The specific regulations of the future are still unknown, but what is certain is that the competition between the two will drive the financial market to evolve in a more open and efficient direction, and the boundaries between the traditional secondary market and the emerging crypto market are becoming increasingly blurred. A battle for the future financial paradigm has just begun.
