The three models, precisely
1. Price tracker (synthetic)
A derivative or perp that mirrors the stock price. No share exists anywhere on your behalf. You hold counterparty exposure to whoever runs the contract — pure price bet.
2. Wrapped IOU (custodial)
A custodian holds real shares in a brokerage account and issues 1:1 claim tokens. You own a claim on the custodian, not the share. If they're honest and solvent, it tracks; several 2021-era offerings shut down and forced redemptions.
3. Native tokenized share
The token is the registered security: a transfer agent records token holders directly on the issuer's cap table under securities law (e.g., US SEC transfer-agent registration). Transfers on-chain update legal ownership. Dividends and voting attach to the token.
The one question that sorts them
"Who updates the shareholder register when this token moves?"
• Nobody → price tracker.
• The custodian's internal books → wrapped IOU.
• A registered transfer agent, automatically, on-chain → native tokenized share.
Worked example: 100 tokens of a native tokenized share at $10 = $1,000 of registered equity; a 2% dividend pays $20 to your wallet address because the register is the token ledger. The same $1,000 in a tracker pays nothing and can deviate from the real price when liquidity thins.
Why issuers bother
Settlement in seconds instead of T+1, 24/7 transferability, programmable compliance (transfer restrictions coded into the token), and global access without a local brokerage. The trade-offs: allowlisted wallets (KYC), thinner liquidity than national exchanges, and regulatory scope that varies by country. Tokenization changes the rails, not the risk of the underlying business.