MECHANICS
A launchpad on Robinhood Chain where every token is filed against a real penny stock, trades on its own bonding curve, and is quoted against that stock's live price so the gap between them is visible on the sheet.
1. Filing
A launch is a filing, not a deployment. The form is Form PS-1.
Filing requires a sponsor code. This is borrowed from Form 211, where a broker-dealer must sponsor a company's application to be quoted on the OTC markets. Practically, it is a whitelist while capacity is limited. Narratively, it is the reason the sheet is not full of garbage.
A filing specifies:
| Field | Meaning |
|---|---|
| Contract address | Existing ERC-20 on Robinhood Chain (0x + 40 hex) |
| Paired equity | A US-listed stock trading under $5 |
| Peg ratio | How much of one share one token references |
| Liquidity to seed | Real ETH committed at graduation |
| Lock duration | 30 / 90 / 180 / 365 days |
| Fee split | Issuer's share of trade fees, 0–50% |
| Disclosure | Five verifiable facts that determine the starting tier |
Once filed, the issue details cannot be amended.
The universe
Pairable companies are screened on price and size together: trading under $5 per share, market cap between $5M and $50M, actively trading, not an ETF, with a minimum average volume to exclude untradeable shells.
Both filters matter. "Penny stock" is an SEC classification based on share price alone, which on its own would admit large companies that happen to trade cheaply. The market cap ceiling is what keeps the sheet to genuinely small issuers.
2. Launch — virtual liquidity
A filing needs no counterparty capital.
The pool opens with virtual reserves — for example 4 ETH and 1,000,000,000
tokens — that exist only as numbers in the contract. Price is set by constant
product (x * y = k), so the token opens at a real, non-zero price with nothing
actually deposited.
- ·Buyers send real ETH. The curve releases tokens and the price rises.
- ·Sellers reverse it. The curve absorbs tokens and the price falls.
- ·The virtual ETH is never withdrawable.
Two consequences worth stating plainly:
- The pool cannot be drained below its starting point.
- The issuer cannot rug the initial liquidity, because there isn't any to take.
Graduation
Once real ETH raised crosses a threshold (e.g. 12 ETH), the curve closes:
- ·Real ETH plus the remaining token supply deploy into a standard AMM pool
- ·The LP position is locked for the duration chosen at filing
- ·The token trades on the open market from that point
3. Pairing — the oracle is a reference, not a control
This is the part to be precise about.
A Chainlink feed reports the paired stock's price. The contract stores the peg ratio set at filing. Two numbers are derived:
peg = stock price × peg ratio premium = (token price / peg) − 1
The curve sets the token price. The oracle never touches it.
So the token does not track the stock — it trades against it, and premium
measures the divergence.
This is the closed-end fund relationship. A fund trades above or below its net asset value, and the discount is printed alongside the quote. The PREM column on the sheet is the same idea: the one number that says whether the market thinks a token is running hot or cold relative to the thing it is named after.
PREM is the product. Everything else is scaffolding around making that number legible.
4. Disclosure tiers
Every quotation carries a tier. It grades disclosure, not quality, and is not an endorsement or a rating.
| Tier | Name | Basis |
|---|---|---|
| 1 | Current Information | All five disclosure criteria met, lock ≥ 180 days |
| 2 | Limited Information | Three or more criteria met |
| 3 | No Information | Fewer than three |
| CE | Caveat Emptor | Flagged after listing |
The five criteria, all verifiable on-chain or by link:
- ·Contract source verified
- ·Ownership renounced
- ·Minting disabled
- ·No pause or blacklist function
- ·Team information published
Caveat Emptor is not earned by absence. It is applied after listing for promotion irregularities, undisclosed insider distribution, or a broken oracle feed. It lifts once the underlying issue is resolved.
Tiers are reassessed continuously and may change without notice.
5. Fees
- ·Filing fee — flat, in ETH, due at filing
- ·Trade fee — charged on curve transactions, split between protocol and issuer at the rate set at filing
6. Known limitation — the premium has no floor
In a real closed-end fund, the discount has an outer bound because the fund holds actual assets. Worst case, it liquidates at NAV.
PennyStonk tokens hold nothing. There is no redemption, no arbitrage path, and no force pulling the premium toward zero. A token can trade at −90% to its peg indefinitely and nothing corrects it.
This is not fatal, but it means premium is a sentiment indicator, not a
valuation, and the interface should never imply otherwise.
Three ways to give it teeth later, if desired:
| Option | Mechanism | Trade-off |
|---|---|---|
| Redemption floor | Fee-funded treasury buys back below a set discount | Real, but expensive and hard to size |
| Fee asymmetry | Trade fees scale with absolute premium | Cheap and soft, but gameable |
| Nothing | Accept it as a sentiment index and say so | Honest, requires no mechanism |
Recommended: option three, for now. The premium is interesting as a number whether or not anything enforces it. Claiming a mechanism that does not exist is how projects acquire a credibility problem later.
7. What these tokens are not
Tokens filed on PennyStonk are not securities. They confer no ownership, dividend, or voting rights in any referenced company. They are not issued, endorsed, or backed by the companies they reference.
PennyStonk is not affiliated with, endorsed by, or operated by Robinhood Markets, Inc. or any of its subsidiaries.
Note that Robinhood's own Stock Tokens are structured as tokenized debt securities with no shareholder rights. Users on this chain will encounter both products. The distinction between a tokenized claim on a custodied share and a synthetic reference token is one this documentation should keep making loudly.
Penny stocks are themselves a category the SEC associates with elevated fraud risk, low liquidity, and limited public information. Referencing one does not transfer any protection to the token, and the token carries every risk of the underlying category on top of its own.