In early July, well-known brokerage firm Robinhood announced its "stock tokenization" plan, which sparked discussion. In addition to this, they also announced information about opening up "equity derivatives" for two private companies, OpenAI and SpaceX. However, before them, on June 25, crowdfunding platform Republic took the lead in announcing that they would issue the Mirro Token, which is linked to the performance of Elon Musk's space company SpaceX's private stock. In addition to this, there are options for dozens of other well-known "private companies."

How is this legacy crowdfunding platform's mirrored token different from Robinhood's "equity derivatives"? And how can we find opportunities in them?

What is Republic?

Founded in 2016 and headquartered in New York, Republic is a financial technology platform that focuses on private equity and alternative asset investment. Its core idea is to "open up investment opportunities in private companies to retail investors," significantly lowering the threshold for ordinary investors to participate in venture assets through compliant innovation and technological means. Since the era of equity crowdfunding following the JOBS Act to date, Republic has developed a full-stack private investment ecosystem covering diverse asset classes through nine years of exploration.

Its architecture includes crowdfunding financing platforms for startups and small projects, Republic Crowd Invest operating based on rules such as Regulation Crowdfunding (Reg CF) in the United States, investment and consultancy services in the blockchain field, Republic Crypto, which acquired the regulated digital asset trading platform INX with a valuation of up to $60 million, Republic Capital, a venture capital department focusing on early-stage project investments in Web3, artificial intelligence, gaming, fintech, and other fields, Republic Real Estate, holding real estate assets through an SPV structure, allowing investors to subscribe to RWA real estate projects in shares, and more.

Through the diverse business layout mentioned above, Republic has created a closed-loop ecosystem spanning primary market fundraising to secondary market trading. It serves both startups (providing fundraising channels and value-added services) and global investors (offering innovative investment products and exit paths). As stated in Republic's introduction, its mission is to blend traditional finance with blockchain innovation within a compliance framework, opening up the previously closed private market to the public.

Are Mirror Tokens Just Hot Air?

A Mirror Token is a new product category introduced by Republic this year, which can be seen as an on-chain derivative linked to the performance of pre-IPO company equity. Unlike directly holding private equity, Mirror Token holders do not have voting rights or ownership of the company. Instead, they obtain a tradable promissory note granting them the right to future "liquidity events" of the target company through a specially designed contract. Issuing entities like Republic LLC represent investors holding related interests or benchmarks of the target company. When the company undergoes an IPO, acquisition, or other exit event, Token holders will receive a cash return equivalent to the appreciation of their holdings based on their proportionate ownership.

For example, Republic's initial offering of the rSpaceX token was initially pegged to the price of SpaceX stock in the secondary market (reported to be in the range of $225-275 per share, with SpaceX's latest valuation around $350-420 billion). Investors who purchased rSpaceX at this price will receive the price difference in stablecoin form if SpaceX's IPO price or acquisition valuation exceeds this level in the future. Additionally, they may also receive proportional distribution of dividends or other earnings. Throughout this process, investors do not need to actually hold SpaceX stock but can still gain nearly the same economic benefits as shareholders.

It is important to note that Mirror Tokens are not an official issuance by the target company and do not have their endorsement. Investors do not acquire any shares or equity in SpaceX; their rights are solely enforceable against the issuing entity RepublicX LLC. On July 1st, Republic's Co-CEO Andrew Durgee was interviewed by renowned business anchor Liz Claman on Fox News. Liz, upon learning that Mirror Tokens do not represent actual shares, expressed concerns, stating, "It makes me worry a bit, reminds me of those 'Brooklyn Bridge scams' and half-jokingly asked, 'How will you ensure investors are not playing with 'hot air'?"

Admittedly, this form may sound a lot like "hot air" at first listen. In response to this, Republic's Co-CEO Andrew Durgee stated, "All details are publicly disclosed in the Form C filing submitted to the SEC. The entire process is fully compliant and recorded, and we are regulated by FINRA and the SEC. We have been operating under this model for eight years, and no one has more experience than us. We are now combining this system with tokenization, creating a structure that has never been seen before."

Based on the ongoing rAnthropic process, the entire path begins with Republic establishing a dedicated issuance entity (in this case, Opendeal Broker LLC), which exists as a Special Purpose Vehicle (SPV) responsible for externally holding indirect economic rights with the target company. Republic will launch the project's reservation page on the platform, where investors at this stage express their interest but cannot invest yet.

Upon the conclusion of the reservation phase and readiness to start formal fundraising, Republic will formally submit the Form C filing to the SEC in accordance with Regulation Crowdfunding (Reg CF) regulations. This filing will detail key information about the project, such as the fundraising cap, token price, contract terms, potential risks, and funding usage plan. Once the Form C is approved, investors can use payment methods such as Apple Pay, credit card, bank transfer, or USDC through the Republic platform to make their investment, with the funds temporarily held in a third-party escrow account to ensure they are only disbursed once the project meets the minimum funding requirement.

Upon confirmation of the fund's arrival, Republic will mint a number of Mirror Tokens corresponding to the investment amount on-chain, which will immediately enter a 12-month lock-up period (as required by the Reg CF Act). After the lock-up period ends, token holders can choose to transfer the tokens to a regulated security-type secondary market like the INX exchange (acquired by Republic in April this year for a valuation of 60 million USD) for free trading.

When the underlying target company undergoes an IPO, acquisition, or other liquidity event, the issuing SPV will trigger a redemption mechanism to return investors' profits in stablecoin form based on the number of Mirror Tokens held by the user. The advantage of this mechanism is to ensure legal compliance while maximizing the opportunity for global retail investors (including those in the US) to benefit from the growth of pre-IPO star companies.

Can you still buy Figma, the "highest valued" tech company set to IPO this year, on Republic?

The current platform has opened or preheated targets including globally acclaimed private giants such as SpaceX, OpenAI, Anthropic, and Epic Games, representing core assets of key future industries such as space tech, artificial intelligence, and gaming entertainment. SpaceX's valuation in the private market has soared to a range of 350 billion to 420 billion USD, while OpenAI and Anthropic lead the industrial race of generative AI technology with strategic support from tech titans like Amazon and Google. Epic Games, renowned among global gamers, is well-known for its Unreal Engine and game ecosystem.

It is worth mentioning Figma, as a leader in collaborative design software. Figma was originally one of the targets Republic claimed to be able to "mirror." As of an internal share purchase in May 2024, Figma was valued at around $12.5 billion, a 25% increase from its $10 billion valuation in 2021. The company has experienced rapid annual revenue growth, reaching $600 million in ARR in 2024 and achieving breakeven. However, unlike many unicorns that choose long-term privatization, Figma, after Adobe's failed acquisition plan in 2023 at a valuation of $20 billion, decided to go public.

In April 2025, Figma secretly filed for an IPO, expecting to raise $1.5 billion. It may soon be able to exit via an IPO, but it is unknown if this has caused communication issues with the "mid-ownership" company, as despite previous promotions, Figma did not appear on the latest Mirror Token page. Figma's case highlights the current dilemma of unicorn companies, either staying private for a long time, disappointing retail investors, or taking the risk of an IPO for liquidity. Regardless of the path, the emergence of platforms like Republic provides these companies with a third option and bridges the gap for investors between the two states.

However, aside from the aforementioned companies, Republic is actively expanding its list of investment targets. Republic has revealed plans to launch Mirror Token covering Ramp (a fintech unicorn), Cursor, Perplexity (AI), Stripe (a payment unicorn), Waymo (self-driving), and more than 20 other companies. Some of these companies are already valued at several billion dollars, while others are still in the early stages of rapid growth. Through the Mirror Token mechanism, investors may participate in the corresponding returns in the rapid development of these companies through Republic.

Robinhood vs. Republic: When Funding Platforms Meet Brokerages?

Robinhood and Republic coincidentally turned their attention to on-chain securitization of pre-IPO unicorns but chose radically different paths. One ventured into the European market outside of U.S. regulations, while the other intricately navigated within the existing U.S. compliance framework. Their differences are reflected not only in technical and compliance designs but also in business strategies and target users. Republic has its venture capital division and network, which may secure earlier and more exclusive project resources; meanwhile, Robinhood, with its visibility and user base, has the potential advantage of attracting partnerships with popular companies. For investors, this means more choices but also a greater need for discernment: identifying which companies have reasonable valuations and promising prospects among many options.

Overseas Exemption vs Local Regulation

Robinhood's stock token plan is currently only available to EU users due to strict restrictions on investment in unlisted securities in the US. Only accredited investors meeting asset/income thresholds can participate in private placements, and companies must also comply with disclosure requirements. By deploying the business in Europe, Robinhood has leveraged the relatively lenient regulatory environment to make it possible to provide exposure to private company equity to retail users. These tokens are issued by Robinhood in partnership with blockchain company Arbitrum, running on the Ethereum Layer 2 network, extending trading hours to 24/7, and planning to expand the tradable tokens to "thousands" within the year, reflecting Robinhood's ambition to bypass US regulations and lead the on-chain securities revolution globally.

On the other hand, Republic has taken a nearly opposite approach, fully complying with existing US securities laws' exemption provisions (Reg CF/D, etc.) to design products, making the Mirror Token a regulated security in legal nature. This means that every Mirror Token from Republic must submit disclosure documents to the SEC (Form C, etc.) and undergo FINRA review. Although under the Reg CF model the amount raised per offering is limited and the lock-up period is longer (undoubtedly restricting scale and liquidity), it allows US and even some overseas retail investors to participate legally. With a "compliance first, expansion later" approach, Republic carefully balances regulatory boundaries and deep experience (its team has been deeply involved in this area since the JOBS Act was passed).

In comparison, Robinhood has chosen a regulatory arbitrage fast lane, while Republic is dancing within the regulatory confines. The former appears to advance faster in the short term with a potentially larger market, but with higher compliance uncertainty. The latter progresses slightly slower, but each step solidifies legality, laying the foundation for future comprehensive expansion.

Equity Holding vs Revenue Bond

Robinhood's stock token is essentially an equity token, where Robinhood itself or through an SPV holds shares of the target company and then issues on-chain tokens to users, representing a certain proportion of economic rights. According to a Robinhood spokesperson, these tokens give retail investors "indirect exposure to the private market," backed by SPV equity controlled by Robinhood. Therefore, it can be understood that Robinhood is playing the role of a "custodial broker," and users are purchasing a portion of the "revenue right slice" held by Robinhood. In the future, once the target company goes public or is acquired, Robinhood may realize profits by liquidating the SPV shares and distributing them to token holders.

On the other hand, Republic's Mirror Token is closer to a form of pre-agreed yield bond or "contract," which does not require Republic to hold an equivalent amount of underlying stock. Instead, it only needs to pay the agreed amount based on the number and proportion of token holders when a triggering event occurs. Republic does not explicitly state that it will hold a 1:1 amount of underlying stock. In theory, it could choose to hedge or partially hold, giving it greater flexibility.

However, this design also means that investors need to bear the issuer's credit risk and trust that Republic will have the ability to fulfill the payment obligation in the future. This aspect is also reflected in the legal nature of the relationship between the two parties and the users. Under the Robinhood model, users may indirectly become beneficial trust owners with shareholder rights through an SPV. In contrast, under the Republic model, users are only Republic's creditors, with no direct legal affiliation with the target company.

The Robinhood model is closer to the traditional concept of "shareholding on behalf," which may be more intuitive in terms of alignment of interests and credibility but may face greater challenges in legal compliance in most countries. The Republic model cleverly circumvents direct equity issuance through innovative contracts, resulting in lower regulatory risks but higher requirements for the issuer's reputation.

Broker Expansion vs. Private Market Ecosystem

After experiencing the crypto bull market and the frenzy of retail investors in the US stock market, Robinhood's user trading activity has declined in recent years. Introducing stock/equity tokenization helps increase user engagement and revenue streams. Following the announcement of this news, Robinhood's stock price surged nearly 10%, reaching a new all-time high since its IPO. Robinhood CEO Vlad Tenev sees stock tokenization as the "seed of a larger plan" and claims that several unicorn companies have expressed interest in joining the "tokenization revolution."

It is evident that Robinhood's ambition is to build a globally interconnected on-chain securities trading platform, elevating its positioning from a traditional brokerage to an innovator in crypto finance. With its status as a publicly traded company, Robinhood has gained widespread support from traditional Wall Street financial institutions, with institutional investors holding 59-63% of its shares, including giants like Vanguard and BlackRock. This enables Robinhood to quickly access stocks of former unicorn companies that are already publicly traded.

In contrast, Republic's launch of the Mirror Token seems more like a natural progression, as Republic has always been a platform focused on private equity. It has been serving startup fundraising and early investors. With the prolonged IPO winter in recent years and many prominent startups delaying their public listing, the disconnect between the primary and secondary markets has made ordinary investors feel marginalized. Republic identified this pain point and opened up its existing "IPO resources" directly to retail investors. Through the Mirror model, Republic can issue corresponding products without the company's authorization or involvement, allowing Republic to design investment products around popular unicorns without persuading these companies to raise funds on the platform. Therefore, Mirror Token is not just a product innovation for Republic but also a breakthrough in its business model, transforming from matchmaking project financing to actively packaging and selling investment opportunities.

Republic, on the other hand, has built a unique private investment ecosystem based on its deep-rooted foundation within the AngelList Alumni (similar to the Paypal Mafia, but not a specific organization). Coupled with its high-profile advisory team including DFJ founder Tim Draper, with investments spanning Tesla, SpaceX, Coinbase, and even Robinhood itself, Republic has achieved a rare cross-platform influence. Mark Zuckerberg's sister Randi Zuckerberg, advocate for private aerospace (such as SpaceX), and XPrize Foundation founder Peter Diamandis contribute to Republic's relatively abundant early-stage unicorn equity resources.

The Future of Investment Democratization

The current trend in the investment market is increasingly moving towards "democratization," but challenges also exist. For example, brokerage giants like Robinhood, with a large existing user base and strong brand appeal, attracted significant attention from retail investors upon the launch of their product, even prompting an official statement from OpenAI. However, for most "stock tokenization" projects, the challenge lies in whether their model can obtain long-term regulatory approval, as the U.S. SEC has never explicitly allowed retail investors to invest in unlisted equities.

Over the past few years, Republic has maintained close cooperation with the SEC/FINRA, and its exploration in the regulatory gray area has been relatively cautious and prudent. Through rules like Reg CF, Mirror Token has achieved a breakthrough, which in some ways appears to be "safer," but the market size cap of "$5,000" for investment limits its scalability.

Looking at industry trends, this year, compliant crypto institutions including Kraken have also begun offering stock token trading to non-U.S. users, and "on-chain securities" are gradually emerging. However, the enhancement of regulatory frameworks will take time. A former SEC official has publicly stated that allowing retail investors to participate in the private investment market is the general trend, with the key being to balance innovation and investor protection.

The specific regulations of the future are still unknown, but it is certain that the competition between the two will drive the financial market towards a more open and efficient direction, blurring the boundaries between traditional secondary markets and emerging crypto markets. A battle for the future financial paradigm is just beginning.

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