# How do T-Tokens Work? {% hint style="info" %} **Disclaimer:** This article provides general information to help explain Tessera's Terms and Conditions in simpler language. It is for informational purposes only and should not be relied upon as legal, financial, investment, or tax advice. T-Tokens represent loan participation rights, not securities, though regulatory treatment may vary by jurisdiction. This is not a substitute for the official Terms and Conditions at [https://terms.tessera.pe](https://terms.tessera.pe/), which shall prevail in all respects in case of any discrepancy. These materials are not directed to persons in jurisdictions where such activity would be unlawful. Before using Tessera, you must read and accept the complete Terms and Conditions and consult your own legal, financial, and tax advisors. {% endhint %}

How T-Tokens work behind the scene

Getting exposure to high-value private companies like SpaceX and Kalshi has historically been reserved for billion-dollar funds and ultra-wealthy institutions. Tessera changes that by letting anyone obtain tokenized economic exposure to these companies through a loan-participation structure. Here’s how T-Tokens work:
### 1. Receive T-Tokens A T-Token (such as T-SpaceX or T-Kalshi) is a **loan participation right**. When you acquire a T-Token, you extend a loan to a **dedicated issuer entity** — a wholly owned subsidiary of Tessera Works Foundation created specifically for that token. Each T-Token has its own dedicated issuer entity. Your token is a contractual right to receive a share of the proceeds when a qualifying liquidity event occurs. That is your loan repayment. The product carries a non-security legal opinion under Singapore law, confirming it is structured as a loan product, not a capital markets product. Here’s the key difference: Your loan repayment equals whatever the underlying exposure realizes at a liquidity event (IPO, acquisition, etc.). If the company exits higher, repayment is higher. If lower, repayment is lower. Repayment is tied directly to the economic outcome of the underlying exposure. Once your loan is made, you receive T-Tokens (SPL tokens on Solana). These tokens represent: * your loan position * your right to receive repayment tied to liquidity-event proceeds **What T-Tokens are not:** T-Tokens are not equity. Holders have no ownership, voting, or dividend rights in the underlying company and do not appear on its cap table. Your claim is against the relevant issuer entity under the loan agreement — not against the underlying company. {% hint style="info" %} ⚠️ Important Eligibility Notice: Tessera is not available to persons or entities in certain excluded jurisdictions, including the United States of America, People’s Republic of China, and other restricted territories. See full Terms and Conditions at [https://terms.tessera.pe](https://terms.tessera.pe/) for complete list. {% endhint %} ### 2. Behind the Scenes: Two Layers of Isolation Each issuer entity enters into a loan agreement with its own **segregated portfolio inside a Cayman Islands SPC** (segregated portfolio company). That portfolio acquires and holds the economic exposure to the underlying company. Each portfolio corresponds to a single company: * Portfolio 1 → SpaceX * Portfolio 2 → Kalshi\ … and so on. This creates two layers of isolation: * **Issuer-level isolation:** each T-Token has its own dedicated issuer entity, so issues with one token's issuer do not affect another's. * **Asset-level isolation:** each underlying asset sits in its own legally isolated segregated portfolio within the Cayman SPC. Together, these layers structurally prevent cross-contamination between T-Tokens. ### 3. Portfolios Acquire Real Exposure Each portfolio uses the loaned stablecoins to acquire actual economic exposure to the private company shares, through: * direct shares * contracts for shares * or similar instruments tracking company value This is what gives your loan economic exposure to the underlying private company. ### 4. Independent Verification & Proof-of-Reserve Transparency is a core design principle. Here’s how verification works: 1. Portfolios produce audited financial statements showing what assets they hold. 2. The data is fed into Chainlink, a trusted blockchain oracle. 3. Chainlink publishes Proof-of-Reserve data on-chain. Anyone can verify that tokens in circulation match the assets held in portfolios. ### 5. Operational Security Operational security is handled by Fireblocks, a platform used by leading financial institutions for secure token minting, transfers, and burning. Fireblocks uses multi-party computation (MPC) for secure key management. ### 6. Supply Discipline: 1:1 Verification Tessera does not issue more tokens than there are verified units of underlying exposure. Example: if a SpaceX portfolio holds exposure equal to 1,000 units, only 1,000 tokens can exist. This supports: * no dilution * no excess minting The 1:1 ratio is continuously validated through Chainlink Proof of Reserve. Note that "1:1" refers to token supply matching the verified units of underlying exposure — the loan to the issuer entity is **unsecured** and is not collateralised by the underlying shares. ### 7. Platform Growth Engine As tokens are distributed through Alpha Vault sales and liquidity pools, we reinvest proceeds to source additional high-demand private assets. This inventory management approach enables continuous platform expansion. **The Growth Cycle:** Token distribution → Capital reinvestment → New asset sourcing → Expanded catalog → Higher TVL → Better liquidity **Your Benefit:** * Access to more private companies as the catalog grows * Deeper liquidity as platform TVL grows * A continuous pipeline of new tokenized opportunities Each new asset Tessera tokenizes deepens liquidity and broadens the catalog for all participants. ### 8. What You Can Do With Tokens Unlike traditional private equity, T-Tokens are liquid from day one and compatible with DeFi. You can: * trade on DEXs (e.g., Meteora on Solana) * lend/borrow via DeFi protocols * provide liquidity to earn fees * transfer freely to anyone This bridges private-market access with public-market liquidity — a significant unlock for participants. ### 9. Liquidity Events: How You Get Paid Back Private companies eventually face a liquidity event: * IPO * acquisition * secondary sale * or equivalent corporate actions When that happens: 1. Portfolio liquidates the underlying exposure 2. Proceeds flow back to the relevant issuer entity 3. Tessera opens a Redemption Period 4. You return your tokens 5. You receive your loan repayment equal to the liquidation proceeds Important detail: If you miss the redemption window, the claim expires. ### 10. Key Advantages for Participants * **Access:** exposure to private companies that normally require investments of millions of dollars. * **Liquidity:** trade anytime, instead of waiting years for an exit. * **Transparency:** on-chain proof that the underlying exposure exists. * **DeFi compatibility:** tokens work across the Solana DeFi ecosystem. * **Global access:** the loan-participation structure supports permissionless, global participation. *** ### Risks to Understand T-Tokens are a high-risk product. Holders should understand: * **Unsecured loan:** the loan to the issuer entity is not collateralised by the underlying shares. You rely on the issuer's contractual obligation and the portfolio structure. * **Redemption is contingent on a liquidity event:** there is no fixed maturity date and no guaranteed timeline. * **Redemption window:** when a liquidity event occurs, the issuer opens a redemption period, and holders must redeem within that window. * **Portfolio-level risk:** the underlying pre-IPO exposure carries its own risk, as with any pre-IPO secondary arrangement; residual risk cannot be eliminated. * **Regulatory risk:** regulatory treatment of tokenized real-world assets continues to evolve and may differ by jurisdiction. * **Technical risk:** as on-chain instruments, T-Tokens are subject to smart contract, custody, and key-management risks. * **Total loss of principal is possible.** *** ### Why the Structure Works Tessera's system functions on a few core design decisions: 1. **Loan structure** → Repayment tied to liquidity-event proceeds 2. **Two layers of isolation** → Per-token issuer entities and segregated portfolios 3. **On-chain verification** → Supply matched to verified exposure via Chainlink PoR 4. **Operational security** → Fireblocks MPC key management Together, these connect private market exposure with tokenized, DeFi-composable settlement. ### The Bigger Picture Tessera is part of a broader shift where private markets are being tokenized, making them: * more transparent * more liquid * more accessible * more composable with DeFi If the last decade unlocked crypto-native assets, the next decade is likely to unlock tokenized TradFi assets, starting with private equity. Tessera is positioning itself at that frontier. *** ### Platform Features On the platform, you'll interact with these tokens in a way that feels familiar to anyone who has used other Solana tokens. Tessera platform offers 5 key features:
* **Terminal with PE Company Data:** Access in-depth analysis, charts, metrics, raise rounds, news volume data, and key information for all private equity companies available on Tessera. * **Personal Dashboard & Portfolio:** Track your current holdings, portfolio value, price charts, as well as your full history of transactions. * **Acquire & Trade:** Acquire T-Tokens using stablecoins (USDC/USDT), or trade existing tokens on integrated Solana DEXs. A 0% fee applies on acquisitions, and a 0.2% fee applies on sells/transfers. * **Referral System:** Create referral links, track your referral data, check your total referral earnings, and monitor the trading volume of all your referred users. Earn 30% (Level 1), 3% (Level 2), and 2% (Level 3) of fees from your referral network. * **Redemption (Post-Liquidity Event):** After a company IPOs or is acquired, and after Tessera receives the proceeds, redeem your T-Tokens for stablecoins during the designated Redemption Period. You receive your proportional share of whatever the underlying assets were sold for. *** > High risk. DYOR. Not financial advice. tessera.pe/terms --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.tessera.pe/overview/how-do-tessera-token-work.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.