Daybreak Litepaper

Daybreak takes a tokenized equity and mints tradeable tokens called partials for defined business segments grounded in company reporting. Each partial may include several brands or activities. Opening prices are informed by figures in the company’s 10-Q; the secondary markets then determine their relative value. Mint and redemption connect their combined value to the underlying equity token.

For each underlying equity token deposited, Daybreak mints 100 tokens of every segment. A complete set contains equal tokens of every segment. The quantities are fixed, but their secondary market prices can change independently.

• Mint: deposit one underlying equity token and receive 100 tokens of each segment.
• Redeem: return 100 tokens of every segment to receive one underlying equity token.
• Assisted single-segment redemption (coming soon): a flash loan acquires the missing segments, assembles and redeems the complete set, and repays the loan and costs in one transaction. The user receives the remaining underlying equity tokens. Execution and output depend on liquidity, prices, and fees. Individual partials can also be bought and sold on the secondary market.

This simple mechanism, minting partials from the underlying token and redeeming a complete set back into it, keeps the price of the partials bounded and, through their secondary markets, gives each partial an economic anchor to the tokenized equity.

Price alignment: anyone can mint and sell a set at a premium, or buy and redeem a set at a discount. This arbitrage encourages the combined price to stay near the underlying token. It does not set an individual segment's fair value or guarantee convergence. There are no recurring funding payments.

Holder rights: partials do not provide separate voting rights over a business. Daybreak redemption returns the underlying equity token. Provider redemption into securities or cash is a separate process. Compare xStocks and Backpack terms →

Bounded Sentiment Markets.

Mint and redeem give partials two properties that, together, make them a new kind of market. We call them Bounded Sentiment Markets.

• Bounded: a partial can never be worth more than the company it belongs to. One underlying equity token always mints 100 tokens of every segment, so if 100 tokens of any one partial ever sold for more than the underlying, anyone could mint a set, sell that partial, and keep the other segments for free. Arbitrage keeps every partial between zero and the value of the whole, and the partials in a set together track the parent.
• Sentiment: a partial does not receive its segment’s revenue, profits, or a separate dividend. Its price reflects how much of the company’s value traders think that business represents. Because the set always adds back up to the parent, partials share a fixed whole. If traders become more bullish on Starlink relative to the rest of SpaceX, SX-LiNK gains weight and the other partials lose weight, even if the SpaceX share price doesn’t move.

Like a prediction market, prices within a set are bounded shares of a whole that sum to one. The difference is what holds those prices in place. A prediction market share is a claim on a future payout: it only has value because the market will resolve on a set date, an oracle will declare the outcome, and the winning side gets paid. The expiry is the anchor.

A partial needs no expiry. A complete set is backed by an underlying equity token in escrow from the moment it is minted and can be redeemed for it at any time, so the anchor is always present instead of promised for later. The question a partial prices, how much of the company a business is worth, also has no final answer to resolve to. It is a valuation that keeps changing for as long as the company operates, like the stock itself. So partials are spot tokens with no expiry, no oracle, and no settlement date. The “answer” is the ongoing market consensus, held in place by mint and redeem.

Sentiment is not the only thing that moves a partial. Three other mechanisms feed into its price:

• The parent’s price: the value of a complete set is tied to the underlying equity token, so partials move in aggregate with the parent company. If the underlying rises and a segment keeps the same weight, its partial rises too.
• Dividends: the underlying providers reflect dividends by increasing the token’s multiplier instead of paying cash. The token held in escrow grows in value, so dividends accrue to the complete set. There is no separate payout to any partial; a partial’s share of that value is its market weight, so its claim on dividends changes as its weight does.
• Corporate spin-offs: if the company spins off a business and the underlying token’s provider distributes tokenized shares of the new company, Daybreak passes those shares to holders of the partial that contained that business, based on a snapshot of holders announced in advance. The affected partial’s price is expected to fall at the snapshot to reflect what was distributed, and the other partials’ weights rise because the underlying is smaller. Distribution is subject to the underlying issuer’s terms and conditions.

Secondary markets set the relative weight of each partial. Each partial trades in its own pool, denominated in the underlying, and the pools are custom-configured prop-AMMs.

Price discovery.

• Liquidity sits on a log-to-linear curve: the spacing of liquidity approaches log-percent as a partial approaches 0% of the underlying and linear as it approaches 100%. Near zero, where a small absolute move is a large percentage move, this makes the price harder to shift, keeping it more stable in exactly the ranges most prone to volatility.
• All spread from the secondary markets is cycled back into the pools until they reach a TVL of $500k, after which 50% of the spread will cycle back!

Payoff curves.

• A partial’s price rides on two things at once: the whole company (redemption ties a complete set back to one underlying) and the market’s sentiment about that one business (its weight, its share of the company). That makes a partial a sharp, targeted bet. If you buy a partial at 1% of the company and, if it re-weights to 11%, you’ve just 11xed on that partial, while someone holding the whole stock barely noticed. If that growth also pulls the company itself up, you earn that on top.
• Swings are multiplicative, so a partial can drastically increase or decrease, especially at the lower bound, which is why liquidity in the tail is spaced in log-percentage terms rather than dollar terms.

Pricing.

• We place a partial’s liquidity across a grid of ticks with price levels packed tightly around the current price and spread out further away, so the market is granular right where the trading is happening. As the price moves, we move the ticks with it, keeping that fine grid centered on wherever the market is trading.

The scopes follow the three reportable segments in SpaceX's Q2 2026 10-Q, plus a residual for everything the filing leaves outside them. See Markets for currently listed partials and their exact contents.

Every partial is backed. A complete set is a claim on one underlying equity token held in escrow, and anyone can exercise that claim at any time by returning the set. That is what gives the partials their economic backing. We then pair this with liquid secondary markets specifically designed for smooth price discovery.

Daybreak takes something the market already prices, splits it along the lines the company itself reports, and lets each piece find its own price while staying pegged in aggregate.