Crypto vs. Stocks

01 · Concept — what problem does it solve?

Newcomers reach for the nearest mental model — "a token is like a stock." Sometimes that helps; often it misleads. This page draws the comparison carefully so you keep the useful intuition and drop the dangerous parts. The short version: stocks are legal claims on a business, enforced by courts; most tokens are access or governance rights to a protocol, enforced by code — and the difference shows up exactly when something goes wrong.

02 · Mechanics — the side-by-side

• Ownership: a share is a legal slice of a company with rights to profits and assets. A governance token is usually a vote on a protocol's parameters — rarely a claim on its cash flows, and rarely legally enforceable.
• Trading hours: stocks trade ~6.5h/day on weekdays through brokers; crypto trades 24/7/365, globally, peer-to-peer.
• Settlement: equities settle T+1 (a day later) via clearinghouses; crypto settles on-chain in seconds to minutes, with no central counterparty.
• Custody: a broker holds your shares in "street name"; in crypto you can self-custody with keys — or hand them to an exchange.
• Disclosure: public companies file audited financials with regulators; most tokens have no mandated disclosure — you read the code and the docs, or you don't know.
• Dividends vs. yield: dividends are profit distributions; crypto "yield" comes from staking, fees, or emissions — economically different, and often inflationary.

03 · Formulas

// both use market cap the same way
market_cap = price × circulating_supply

// but crypto adds a second number that matters
FDV = price × fully_diluted_supply   // includes locked/unvested tokens
// a low cap with huge FDV = big future dilution ("unlocks") incoming

04 · Edge cases & risks

• The "it's like equity" trap: pricing a token on a stock-style earnings multiple usually fails — most tokens have no claim on the protocol's revenue. Check whether the token actually captures value or just votes.
• Dilution is louder in crypto: stock dilution is occasional and disclosed; token unlocks can dump large supply on a schedule. FDV vs. market cap is the tell.
• No floor of legal recourse: a defrauded shareholder has courts; a rugged token holder usually has nothing. Code is the law, including its bugs.
• What's genuinely new: composability, 24/7 global access, programmable ownership, and self-custody have no clean equities analog — the comparison is a starting point, not a destination. For the full primitive-by-primitive map, see TradFi ⇄ DeFi.