End-to-End Digital
Securities Solutions

From Asset to Token:
5 Steps

Our Regulatory
Credentials

Regulatory Exemptions
We Operate Under

Important Disclosures

Free and simple tools are available to research firms and financial professionals at Investor.gov/CRS. You may also request a copy of our Client Relationship Summary by calling 800-216-0360 or visiting netshares.com/crs.

What Drives Everything We Do

The Team Behind
Netshares

David Lee

CEO & Chief Compliance Officer

30+ years in securities and capital markets. Expertise in broker-dealer regulation and digital assets. Oversees all compliance programs, supervisory procedures, and regulatory affairs.

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Netshares is expanding. We're looking for experienced professionals in securities, blockchain technology, and compliance. Get in touch to learn about opportunities.

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Our Journey
Since 2020

What investment services and advice can you provide me?

Netshares Financial Services LLC offers brokerage services to retail investors. Currently, the Firm does not have a clearing relationship. The Firm is approved for the following business lines: Private Placement of Securities, Merger & Acquisition Advisory Services, and Operating a Funding Portal pursuant to Regulation Crowdfunding. The Firm offers recommendations to its customers.

• NFS does not maintain customer accounts and as such does not monitor any of its customer investments. Representatives will discuss overall customer objectives and customers can ask representatives to discuss and explain any transaction they may engage in with NFS. Representatives discuss all recommendations to their clients on a per-transaction basis. Clients are NOT required to participate with every recommendation.
• The client has the last word in the investment decisions.
• The firm does sell proprietary products or offer proprietary products to its clients. Clients at the firm make the decision which products they will purchase for their accounts.
• The Firm may require a minimum investment amount and all investments are subject to the Firm's suitability policy.

What fees will I pay?

Fees are paid to the Firm in a number of ways. Issuers pay Netshares a fee to use the Netshares communication Portal for Reg CF offerings. Netshares does not charge a fee to investors for offerings via Reg CF or Reg A. For secondary transactions, Netshares may receive a fee for the purchase and/or sale of privately held securities. Every secondary transaction is unique, and fees will differ per transaction.

Private investment funds offered by Netshares may be managed by an affiliated entity. These affiliated companies may be entitled to: Management Fee (a stated percentage of gross proceeds), Carried Interest (a percentage of any profit realized), Distribution Fee (a stated percentage of any distribution), and Cost Reimbursement (legal, banking, and accounting fees).

Fees paid are not contingent upon the financial performance of each company. Fees are due regardless of whether investors make or lose money. Fees and expenses will result in a reduction of returns over time.

What are your legal obligations to me when providing recommendations?

When we provide you with a recommendation, we must act in your best interest and not put our interest ahead of yours. At the same time, the way we make money creates some conflicts with your interests. You should understand and ask us about these conflicts because they can affect the recommendations we provide you.

The Firm and its Registered Representatives earn by charging its clients commissions or by receiving fees directly from the issuers whose offerings the Firm may sell to you. Additionally, the Firm may sell securities in Companies in which the Firm's indirect owners have an interest, control and/or manage those Companies. This creates an inherent conflict.

Do you or your financial professionals have legal or disciplinary history?

No. You can visit Investor.gov/CRS for a free and simple search tool to research our firm and financial professionals.

For additional information about Netshares Financial Services LLC, or to request a copy of this relationship summary, please visit www.netshares.com. You may also call 800-216-0360 to request up-to-date information or a copy of this relationship summary.

The listing below highlights some of the more significant risk factors associated with investing in privately placed Securities. For a description of the business, operations, and financial condition of a specific issuer, investors should obtain and carefully read the available offering materials before making any investment.

Welcome to Netshares Financial Services, LLC ("Netshares", "us," "our," "we"), a broker-dealer registered with the U.S. Securities and Exchange Commission (the "SEC") and a member of FINRA and SIPC. This Privacy Policy describes the types of information we may collect from you or that you may provide when you visit our website and our practices for collecting, using, maintaining, protecting, and disclosing that information.

At Netshares, we respect the privacy of our Platform visitors and are committed to protecting it. By using the Platform you agree to this Privacy Policy. If you have any questions, contact us at 800-216-0360 or 24285 Katy Freeway, Suite 300, Katy, Texas 77494.

Information We Collect

We collect Personally Identifiable Information you provide directly, including: your name, birthdate, Social Security number, email address, home address, IP address, employer information, financial data (credit reports, income, net worth, investment objectives, risk tolerance), transaction and billing information, and records of your interactions with us.

We also automatically collect usage information as you navigate the Platform, including pages viewed, clicks, device and browser information, IP address, and approximate location. We use cookies, Flash cookies, and web beacons for this automatic collection.

How We Use Your Information

We use your information to: present our Platform and content to you; provide requested services; fulfill the purposes for which you provide it; send account notices; conduct KYC compliance; perform AML background checks; verify accreditation; disburse funds; manage customer service queries; improve and maintain the Platform; conduct marketing (with consent); perform market research; ensure security and investigate fraud; and comply with legal and regulatory obligations.

Disclosure of Your Information

We may disclose your information to: subsidiaries and affiliates; escrow agents, transfer agents, and custodians; businesses you invest in; contractors and service providers; buyers or successors in mergers or acquisitions; law enforcement or governmental authorities as required; and third parties engaged in fraud prevention. We may also disclose aggregated, non-identifying information without restriction.

Your Choices

You can set your browser to refuse cookies; opt out of third-party advertising sharing by emailing info@netshares.com; opt out of promotional communications by clicking 'unsubscribe' in any email; and opt out of targeted advertising by emailing info@netshares.com.

Children's Policy

Our Platform is not intended for children under the age of 18, and we do not knowingly collect Personally Identifiable Information from children.

Welcome to Netshares Financial Services, LLC ("Netshares"), a broker-dealer registered with the SEC and a member of FINRA and SIPC, located at 24285 Katy Freeway, Suite 300, Katy, Texas 77494. These Terms of Service regulate the use and access of www.netshares.com (the "Platform") as well as the Services provided through it.

THIS DOCUMENT INCLUDES A PRE-DISPUTE ARBITRATION PROVISION AND REGULATES THE RESOLUTION OF ANY DISPUTE WHICH MAY ARISE BETWEEN YOU AND US AS A RESULT OF USING OUR PLATFORM.

1. The Service

The Platform offers a web-based solution to connect users seeking to raise capital ("Seekers") with users who may be interested in investing ("Investors"). To use the Platform, you must be of the age of majority, complete registration, agree to these Terms, provide true and complete information, and represent that you will use the Platform only for non-commercial purposes and are not a competitor of Netshares.

2. Account Security

You must treat login credentials as confidential and not disclose them to others. You agree to notify us immediately of any unauthorized access. We have the right to disable any credentials at any time in our sole discretion. We reserve the right to withdraw or amend the Platform without notice.

3. Personal Data

We collect, verify, and record information including your name, date of birth, address, identification numbers, Social Security Number, employer information, net worth, income, occupation, investment experience and objectives, and risk tolerance. If you fail to provide required information, we may not open an account or may close an existing one.

4. Prohibited Uses

You may not use the Platform in any unlawful manner, to exploit or harm minors, to transmit spam, to impersonate others, or to interfere with Platform operations. You may not use automated tools to access the Platform, introduce malware, or attempt unauthorized access to any systems connected to the Platform.

5. Disclaimers & Limitations

Investment opportunities listed are speculative and involve a high degree of risk. Past performance is not indicative of future results. Neither the SEC nor any regulatory authority has recommended or approved any investment. Netshares does not verify the adequacy, accuracy, or completeness of any information. Prospective investors must rely on their own examination of the issuer and the terms of the offering.

6. Pre-Dispute Arbitration

This agreement contains a pre-dispute arbitration clause. By agreeing to these Terms, you agree that any dispute arising from your use of the Platform shall be resolved through arbitration in accordance with FINRA's arbitration rules. You may contact us at 800-216-0360 or email info@netshares.com for the complete terms.

Netshares' fees for each type of offering are disclosed in the respective offering materials:

• Netshares may receive up to 5% of the capital raised per offering, paid by the issuer.
• For Title III Regulation Crowdfunding offerings, Netshares' fees consist of a 5% technology fee (up to $75 maximum per investment) to help cover transactional costs.
• For Title IV Regulation A+ offerings, Netshares' fees consist of per-investor administrative charges.
• Netshares and other third-party service fees for each offering are disclosed in the respective offering materials.
• Netshares may also receive security-based compensation from the issuer equal to a percentage of the number of securities sold, in lieu of or in addition to the above.

About Us

NetShares Financial Services, LLC (the "Firm") is a registered broker-dealer with FINRA and we are required under Regulation Best Interest ("Reg BI") to send you this additional Disclosure Letter prior to making a recommendation regarding your potential investments. This letter provides details relating to our Firm and the relationship between you, the Firm, and the Firm's Registered Representatives. More information can be found at FINRA BrokerCheck or at www.netshares.com.

Financial Profile

In connection with establishing your account and completing your customer agreement, you have been given the opportunity to provide the Firm with your financial profile including investment experience, objectives, risk tolerance, income, and tax status. This information is used so that the Firm and our registered representatives may reasonably rely on it when making recommendations and to ensure supervisory personnel can ascertain that your account activity is consistent with your financial profile.

Conflicts & Compensation

Your representative is compensated for each transaction, creating an inherent conflict when making recommendations. Under Reg BI, your representative will use the Care clause to ensure recommendations are in your best interest, determined by your financial condition, investment objectives, risk tolerance, tax status, investment experience, and other information you have provided.

Products: Private Placements

The Firm sells Private Placements of securities, which are typically illiquid products only for accredited investors. The Firm is paid a fee by the issuer to sell these Private Placements, creating a conflict. Notwithstanding this, the Firm reviews your particular situation and would only make a recommendation if, through investigation of factors including your financial profile, it determines the investment is suitable and in your best interest. Contact us at 800-216-0360 or email info@netshares.com with questions.

1. Introduction

Netshares has a voluntary program for the delivery of documents through the Platform by electronic means rather than traditional mailing. The program offers increased convenience, environmental benefits, and reduced costs. You agree to monitor the Platform on a regular basis to ensure timely receipt of documents. You understand that you are not required to consent to electronic delivery.

2. Acceptance

By acceptance of these Terms, you consent to transact business electronically and to receive all documents, communications, notices, periodic reports (not less frequently than quarterly), contracts, and agreements electronically via the Platform or at your registered email address.

3. Notices

All notices from Netshares will be transmitted to you by email or posted on the Platform and shall be deemed effective upon such transmission or posting. If your contact information changes, you must immediately update it on the Platform. Send notices to Netshares via email to: dlee@netshares.com

4. Tax Statements

You further consent to receive electronically all future tax informational returns and forms from the Seekers unless you notify us otherwise. To withdraw consent, email dlee@netshares.com or call 800-216-0360. If you withdraw consent, paper copies will be mailed to your account address.

5. Changes to Personal Data

You agree to keep a working email address and current contact information. If your email address is not working and we must provide paper notice, we may charge up to $5.00 per delivery.

6. Minimum Requirements

You must have: access to the internet, an email account capable of receiving email, an SSL-compliant web browser supporting secure sessions, and hardware capable of running the Platform. You represent and warrant that you can electronically access, receive, and retain all disclosures sent via email or posted on the Platform.

Understanding Digital Securities

Tokenization by Asset Class

The Basics of Asset Tokenization

Asset tokenization is the process of converting ownership rights in a real-world asset into a digital token on a blockchain. Each token represents a fractional or whole ownership stake in the underlying asset, governed by smart contracts that can automate compliance, distributions, and transfer restrictions.

Unlike cryptocurrencies or utility tokens, tokenized assets issued through registered broker-dealers like Netshares are structured as securities under U.S. federal law. They carry the same legal rights, protections, and regulatory obligations as traditional securities — including registration requirements, investor suitability standards, and anti-fraud provisions.

The types of assets that can be tokenized span a wide range: commercial and residential real estate, private equity fund interests, LP positions, commodity reserves, debt instruments such as bonds and promissory notes, revenue-sharing agreements, and more. The common thread is that the asset has definable ownership rights that can be represented digitally.

How Tokenization Works

The tokenization process typically follows five stages. First, the asset is evaluated and a legal structure is established — typically a special purpose vehicle (SPV) or LLC that holds the asset. Securities attorneys determine the appropriate regulatory exemption, whether that is Regulation D (for accredited investors), Regulation A+ (for broader public offerings up to $75M), or Regulation CF (for equity crowdfunding up to $5M).

Next, smart contracts are developed on a blockchain network. These contracts encode compliance rules directly into the token — for example, restricting transfers to KYC-verified wallets, enforcing holding periods under Rule 144, or limiting the number of token holders to remain within an exemption's requirements. The contracts may undergo independent security review where applicable.

Investor onboarding follows, including identity verification (KYC), anti-money laundering screening (AML), OFAC sanctions checks, and accreditation verification where required. Once approved, investors can subscribe to the offering and receive tokens in their digital wallets.

After issuance, the tokens can potentially be traded on registered Alternative Trading Systems (ATS), subject to the specific offering terms, applicable holding periods, and market availability. Ongoing management includes automated distribution of dividends or interest payments and real-time cap table management. It is important to note that secondary market liquidity is not guaranteed for any tokenized security.

Potential Benefits and Risks

Tokenization may offer certain advantages compared to traditional securities structures. Fractional ownership can lower minimum investment thresholds, potentially broadening the investor base for assets like commercial real estate or private equity that have historically required large capital commitments. Blockchain-based recordkeeping provides transparency and auditability. Smart contract automation can reduce administrative overhead for distributions and compliance checks.

However, tokenized securities carry significant risks that investors must understand. These include illiquidity risk (secondary markets may be limited or unavailable), market risk (token values can decline), technology risk (smart contract vulnerabilities, blockchain network disruptions), regulatory risk (evolving laws may affect token structures), and the general risks associated with the underlying asset itself. Digital securities are speculative investments suitable only for investors who can bear the loss of their entire investment.

The Regulatory Framework

In the United States, tokenized assets that represent ownership or investment interests are generally classified as securities under the Securities Act of 1933 and the Securities Exchange Act of 1934. This means they must either be registered with the SEC or offered under a valid exemption from registration.

The most commonly used exemptions are Regulation D Rule 506(b) and 506(c) for private placements to accredited investors with no cap on the raise amount, Regulation A+ Tier 2 for qualified public offerings to both accredited and non-accredited investors up to $75M per year, and Regulation CF for crowdfunding offerings up to $5M per year with investor-level limits based on income and net worth.

A registered broker-dealer, such as Netshares, is typically required to facilitate these offerings. The broker-dealer provides regulatory oversight, investor suitability review, and compliance infrastructure that issuers cannot legally perform on their own for public-facing offerings.

The terms "digital securities," "security tokens," and "cryptocurrency" are often used interchangeably in casual conversation, but they represent fundamentally different instruments with different legal classifications, risk profiles, and investor protections. Understanding these distinctions is critical for both investors and issuers.

What Are Digital Securities?

A digital security (also called a security token) is a traditional security — equity, debt, fund interest, revenue share, or other investment contract — that is represented as a digital token on a blockchain. The key distinction is that digital securities are subject to federal and state securities laws. They must be registered with the SEC or offered under a valid exemption, sold through or with the involvement of a registered broker-dealer, and comply with all applicable investor protection rules.

Digital securities derive their value from an underlying real-world asset or enterprise — a building, a company, a fund, a loan portfolio. The blockchain serves as the technology layer for issuance, recordkeeping, and potentially trading, but the legal substance of the instrument remains a security.

What Is Cryptocurrency?

Cryptocurrencies like Bitcoin and Ethereum are digital assets that generally function as mediums of exchange, stores of value, or utility tokens within a specific network. Most cryptocurrencies are not backed by a specific real-world asset or enterprise. Their value is driven primarily by supply and demand, network adoption, and market speculation.

Critically, most cryptocurrencies are not registered as securities and are not offered through registered broker-dealers. This means investors in most cryptocurrencies do not benefit from the same disclosure requirements, suitability standards, or fraud protections that apply to securities. The regulatory landscape for crypto continues to evolve, with ongoing SEC enforcement actions and new legislation like the GENIUS Act shaping the framework.

Why the Distinction Matters

For investors, the classification determines what protections you have if something goes wrong. Securities investors benefit from mandatory disclosure requirements, anti-fraud provisions, suitability standards, and recourse through regulatory bodies like FINRA and the SEC. Cryptocurrency investors generally have fewer protections available.

For issuers, the classification determines your legal obligations. Offering a security without proper registration or exemption, or without involving a registered broker-dealer where required, can result in significant civil and criminal liability. Many early "ICOs" (Initial Coin Offerings) faced SEC enforcement actions precisely because they were selling unregistered securities under the guise of utility tokens.

It is important to note that both digital securities and cryptocurrencies carry risk. Digital securities are speculative, may be illiquid, and investors can lose their entire investment. The regulatory framework provides certain protections but does not guarantee returns or eliminate risk.

Real estate has historically been one of the most desirable yet inaccessible asset classes. High capital requirements, lengthy transaction timelines, geographic barriers, and illiquidity have limited participation to well-capitalized institutional investors and high-net-worth individuals. Tokenization offers a new structural approach — but it comes with its own set of complexities and risks.

The Legal Structure

Tokenized real estate does not mean the property itself is "put on the blockchain." Rather, a legal entity — typically a special purpose vehicle (SPV) structured as an LLC — is created to hold ownership of the property. Investors purchase tokens representing membership interests or equity shares in the SPV, which in turn owns the real estate. This structure provides a clear legal chain of ownership while enabling fractional distribution.

The offering is then structured under the appropriate securities exemption. Regulation D 506(c) is common for larger commercial properties targeting accredited investors. Regulation A+ may be used for broader distribution to both accredited and non-accredited investors. Each structure carries different disclosure requirements, investor limits, and ongoing reporting obligations.

The Tokenization Process

Once the legal structure is in place, the offering is prepared. This includes drafting the private placement memorandum (PPM) or offering circular, conducting property appraisals and due diligence, establishing a cap table, and developing the smart contracts that will govern the tokens. The smart contracts encode compliance rules — who can hold the tokens, when they can be transferred, and how distributions are calculated.

Investors are onboarded through a KYC/AML process including identity verification, accreditation checks (for Reg D offerings), and suitability review. Approved investors can then subscribe to the offering, and tokens are minted and distributed to their wallets upon closing.

Post-issuance, the property generates income (rental income, for example) which can be distributed to token holders proportionally, often automated through smart contracts. The cap table is maintained in real-time. If the offering terms permit, tokens may be eligible for secondary trading on a registered ATS after applicable holding periods.

Considerations and Risks

Tokenized real estate carries all the risks of traditional real estate investment — property value declines, vacancy rates, maintenance costs, interest rate sensitivity, and local market conditions — plus additional risks specific to digital securities. These include technology risk (smart contract vulnerabilities, blockchain disruptions), regulatory risk (evolving securities laws), and liquidity risk (secondary market trading may be limited or unavailable).

Investors should carefully read the offering documents, including the PPM or offering circular, and consult with their own legal, tax, and financial advisors before making any investment decision.

What Is a Security Token Offering?

A Security Token Offering (STO) is a method of raising capital by issuing digital tokens that represent ownership in a real-world asset, company, or investment vehicle. Unlike an Initial Coin Offering (ICO), which typically involves unregistered tokens of uncertain legal status, an STO is structured from the outset as a securities offering subject to federal and state securities laws.

The "security token" in an STO is not a new type of instrument — it is a traditional security (equity, debt, revenue share, fund interest) delivered through blockchain technology. The blockchain provides the infrastructure for issuance, compliance, and potentially secondary trading, while the legal substance remains governed by securities regulation.

STOs vs. IPOs vs. ICOs

An IPO (Initial Public Offering) involves full SEC registration, extensive disclosure, and listing on a national stock exchange. This process is expensive (often $1M+ in legal and accounting fees) and time-consuming (6-12+ months), making it impractical for most small and mid-size issuers.

An ICO (Initial Coin Offering) arose in 2017-2018 as a way to raise capital by selling digital tokens, often with minimal disclosure and no regulatory oversight. Many ICOs were subsequently determined by the SEC to be unregistered securities offerings, resulting in enforcement actions, investor losses, and reputational damage to the broader digital asset space.

An STO occupies a middle ground: it uses blockchain infrastructure for efficiency while maintaining full compliance with securities laws through registration exemptions like Regulation D, Regulation A+, or Regulation CF. This approach provides issuers with a faster, more cost-effective capital raise compared to an IPO, while giving investors the legal protections absent from most ICOs.

How an STO Works in Practice

The issuer works with securities counsel to structure the offering and prepare the required disclosure documents. A registered broker-dealer is engaged to conduct the offering, including investor suitability review, KYC/AML compliance, and subscription processing. Smart contracts are developed to govern the token's behavior — transfer restrictions, holder limits, distribution logic.

Once launched, qualified investors can participate by subscribing through the broker-dealer's offering infrastructure. Upon closing, tokens are issued to investor wallets. Post-issuance, the tokens are managed on-chain with real-time cap table updates, automated distributions where applicable, and potential secondary trading through registered ATS venues after applicable holding periods.

As with any securities offering, STOs carry risk. Investors can lose their entire investment. Secondary market liquidity is not guaranteed. The value of security tokens can decline based on market conditions, the performance of the underlying asset, and other factors.

What Is an Accredited Investor?

An accredited investor is an individual or entity that meets certain financial thresholds set by the SEC under Regulation D of the Securities Act of 1933. Accredited investor status is a gating requirement for participation in many private securities offerings, including most Regulation D Rule 506(b) and 506(c) security token offerings.

The accredited investor standard exists because the SEC considers these investors to be financially sophisticated enough (or to have sufficient resources) to bear the risks of unregistered securities, which do not come with the same level of mandatory disclosure as publicly registered offerings.

Qualification Criteria

Under SEC rules (updated in 2020), an individual qualifies as an accredited investor if they meet at least one of the following criteria:

The Verification Process

For Regulation D Rule 506(c) offerings — which allow general solicitation — the issuer must take "reasonable steps" to verify that each investor is accredited. Common verification methods include reviewing tax returns or W-2 forms (income test), obtaining a written confirmation from a registered broker-dealer, SEC-registered investment adviser, licensed attorney, or CPA, or reviewing bank and brokerage statements (net worth test).

For Rule 506(b) offerings, issuers may rely on investor self-certification, though many choose to implement verification as a matter of best practice.

Opportunities for Non-Accredited Investors

Not all digital securities offerings require accredited investor status. Regulation A+ Tier 2 offerings and Regulation CF offerings are available to non-accredited investors, though investment limits may apply based on income and net worth. These offering types provide a pathway for broader participation in digital securities while maintaining regulatory protections.

Property Types

Netshares supports tokenization across a range of real estate asset types: commercial office buildings, multifamily residential, industrial warehouses, retail centers, mixed-use developments, and single-asset or portfolio REIT structures. Each property type has unique characteristics that influence the optimal offering structure, investor profile, and distribution model.

How It Works

A special purpose vehicle (SPV) is created to hold the property. Ownership interests in the SPV are tokenized and offered to investors under the appropriate SEC exemption. Smart contracts govern token transfers, enforce holding periods, and automate rental income distributions to token holders proportionally based on their ownership stake.

Offering Structures

Real estate tokenization can be structured under Regulation D 506(c) for accredited investors with no raise cap, Regulation A+ for broader access up to $75M, or Regulation CF for community-focused projects up to $5M. The right structure depends on the property value, target investor base, and the issuer's objectives.

Risks & Considerations

Tokenized real estate carries all standard real estate risks including property value decline, vacancy, maintenance costs, and interest rate sensitivity, plus digital securities risks including illiquidity, technology risk, and regulatory risk. Secondary market trading may be limited or unavailable. Investors should consult their own advisors.

What We Tokenize

Private equity tokenization enables the digital representation of fund interests, limited partnership (LP) positions, carried interest allocations, co-investment vehicles, and special purpose vehicles (SPVs). These instruments are tokenized as securities and offered to qualified investors through compliant channels.

Benefits for Fund Managers

Tokenization may help fund managers reach a broader investor base, lower minimum investment thresholds through fractional interests, automate capital calls and distributions through smart contracts, and maintain real-time visibility into the cap table. These potential efficiencies do not eliminate the complexities and risks inherent in private equity investing.

Investor Considerations

Private equity investments are long-term, illiquid, and speculative. Tokenization does not change the fundamental nature of these investments. While secondary trading may become available through registered ATS platforms after applicable holding periods, liquidity is not guaranteed. Investors must be able to bear the loss of their entire investment.

How Commodity Tokenization Works

Commodity-backed tokens represent ownership interests in physical commodity reserves held by a custodian or in commodity-linked financial instruments. The tokens are structured as securities and offered through registered channels. The underlying commodity provides the asset backing, while the blockchain provides the issuance and transfer infrastructure.

Supported Commodities

Netshares supports tokenization of precious metals (gold, silver, platinum), energy assets (oil and gas production interests, energy credits), agricultural commodities (crop futures, farmland interests), and industrial metals. Each commodity type has unique custody, valuation, and regulatory requirements.

Risks & Considerations

Commodity-backed tokens carry commodity price risk, custody and storage risk, counterparty risk, and all standard digital securities risks. Commodity prices are volatile and influenced by global macroeconomic factors, geopolitical events, and supply-demand dynamics. These investments are speculative and suitable only for investors who can bear loss of principal.

Tokenized Debt Instruments

Debt tokenization enables the issuance of digital bonds, promissory notes, bridge loans, revenue-based financing agreements, and other fixed-income instruments as blockchain-based securities. Each token represents a creditor position with defined terms including principal amount, interest rate, payment schedule, and maturity date.

Smart Contract Automation

Tokenized debt instruments can leverage smart contracts to automate coupon payments, enforce covenant compliance, trigger default provisions, and manage repayment schedules. This automation may reduce administrative overhead and provide real-time transparency into the instrument's performance. However, smart contracts are not infallible and carry their own technology risks.

Investor Considerations

Fixed-income digital securities carry credit risk (the issuer may default), interest rate risk (values may decline as rates rise), liquidity risk (secondary trading may be limited), and technology risk. The automated nature of smart contracts does not eliminate the fundamental credit risk of the underlying borrower. Investors should carefully review offering documents and consult their advisors.