> For the complete documentation index, see [llms.txt](https://docs.tessera.pe/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.tessera.pe/overview/how-do-tessera-token-work.md). # 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 scenes

Access to private companies like SpaceX, Kalshi, and OpenAI has historically been limited to large funds and institutions. Tessera lets eligible users obtain tokenized economic exposure linked to these companies' pre-IPO valuations through a loan-participation structure. Here’s how T-Tokens work: ### 1. Receive T-Tokens A T-Token (such as T-SpaceX, T-Kalshi, or T-OpenAI) 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 has a non-security legal opinion under Singapore law, which concludes that it is structured as a loan product, not a capital markets product. Regulatory treatment may vary by jurisdiction. How repayment works: Your repayment depends on what 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 linked to the underlying company's pre-IPO valuation. Each portfolio corresponds to a single company: * Portfolio 1 → SpaceX * Portfolio 2 → Kalshi * Portfolio 3 → OpenAI\ … 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 are designed not to affect another's. * **Asset-level isolation:** each underlying asset sits in its own legally isolated segregated portfolio within the Cayman SPC. Together, these layers are designed to limit cross-contamination between T-Tokens. ### 3. Portfolios Acquire Underlying Exposure Each portfolio uses the loaned stablecoins to acquire economic exposure linked to the private company's valuation, through: * direct shares * contracts for shares * or similar instruments tracking company value This is what links your loan's repayment to the underlying private company's valuation. ### 4. Independent Verification & Proof-of-Reserve Transparency is a core design principle. Here’s how verification works: 1. Independent auditors attest to the asset count each portfolio holds. 2. The data is fed into Chainlink SmartData (DataLink). 3. Chainlink publishes Proof-of-Reserve data on-chain. You can compare T-Token supply with the attested asset counts on-chain. ### 5. Operational Security Mint, freeze, fee-config, and program-upgrade authorities are held in Fireblocks multi-party computation (MPC) custody. ### 6. Supply Discipline (1:1) Token supply is designed not to exceed the attested units of underlying exposure. Example: if a SpaceX portfolio holds exposure equal to 1,000 units, supply is designed not to exceed 1,000 tokens. This is designed to prevent dilution and excess minting. Supply can be compared with the Chainlink PoR asset count after each attestation. Note that "1:1" refers to token supply relative to the attested units of underlying exposure — the loan to the issuer entity is **unsecured** and is not collateralized by the underlying shares. ### 7. Token Distribution T-Tokens are distributed through Alpha Vault sales and liquidity pools. ### 8. What You Can Do With Tokens Unlike direct private-market holdings, T-Tokens can trade on Solana DEXs, where liquidity exists. You can: * trade on DEXs (e.g., Meteora on Solana) * lend, borrow, or use as collateral where supported by third-party DeFi protocols * provide liquidity (liquidity providers may earn pool fees) * transfer to other Solana wallets, subject to the Terms This combines private market exposure with on-chain liquidity, where liquidity exists. ### 9. Liquidity Events and Redemption A private company may have a liquidity event, such as: * IPO * acquisition or other change of control See [Redemption](/features/redemption.md) for the conditions that must be met before redemption opens (including lock-up expiry, receipt of proceeds, and an announced start date). 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 pro rata share of the distributable proceeds Important detail: if you miss the Redemption Period, the claim expires. ### 10. Key Advantages for Participants * **Access:** economic exposure linked to private companies' pre-IPO valuations, which is otherwise difficult to obtain. * **Liquidity:** trade on DEXs 24/7, where liquidity exists, instead of waiting years for an exit. * **Transparency:** on-chain, auditor-attested reserve data. * **DeFi compatibility:** tokens work across the Solana DeFi ecosystem. * **Broad access:** the loan-participation structure is open to eligible users; use is subject to the Terms, including jurisdiction exclusions. *** ### Risks to Understand T-Tokens are a high-risk product. Holders should understand: * **Unsecured loan:** the loan to the issuer entity is not collateralized 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 it. * **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 comparable with attested asset counts 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 (the aim of this structure) * more liquid * more accessible * more composable with DeFi Tessera builds tokenized access to private markets on Solana. *** ### Platform Features On the platform, you'll interact with these tokens in a way that feels familiar if you have used other Solana tokens. The Tessera platform offers five features: * **Terminal with Private Company Data:** Access in-depth analysis, charts, metrics, raise rounds, news volume data, and key information for all private 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 0.2% Token-2022 transfer fee applies to buys, sells, and transfers; on a buy it is withheld from the tokens received. T-SpaceX has had a 0% transfer fee since Solana epoch 1047 (October 1, 2026). * **Referral System:** Create referral links, track your referral data, check your total referral earnings, and monitor the trading volume of all your referred users. Referrers receive 30% / 3% / 2% (Levels 1–3) of the transfer fees on their referees' transfers and sells. * **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 pro rata share of the distributable proceeds. *** > High risk. DYOR. Not financial advice. tessera.pe/terms