The Past and Present of XStocks: Concerns Arise as Three Founders are Exposed as Members of the Drop to Zero Project DAOStack

xStocks has become a hot topic in the Chinese-speaking crypto Twitter community these days due to its stock tokenization narrative (CT), but the lesser-known story behind it is that the three co-founders of the project are the original team from the decentralized collaboration project DAOStack, which raised tens of millions of dollars in 2018 but announced failure due to running out of funds. Now, with xStocks making a comeback, it inevitably raises concerns.

xStocks is the original zero-based project by the DAOStack team.

I looked at the development company Backed of the XStocks team. This on-chain asset infrastructure company has a purely Israeli team, and the first three co-founders all have previous entrepreneurial experience in the crypto space as co-founders of DAOStack.

Due to the fact that the DAO sector has not really exploded, DAOStack has basically not updated its operations since 2020. Its token $GEN…

— encryption fearless (@cryptobraveHQ) July 1, 2025

Once DAOStack, now xStocks: how did it fail?

DAOStack was established in 2017 and was one of the star projects in the DAO field at that time, aimed at providing a decentralized collaboration operating system built on Ethereum. During the peak of the ICO boom from 2017 to 2018, DAOStack raised approximately $30 million through private placements, presales, and public sales, and subsequently issued the governance Token $GEN.

However, the DAO track did not explode as expected. Coupled with a lack of practical applications and weak token economics, DAOStack gradually stopped updating after 2020, and community and development activities also came to a standstill. Until the end of 2022, the DAOStack team officially announced the cessation of operations, stating that all the funds raised had been exhausted.

At that time, DAOStack did not attempt to list $GEN on mainstream exchanges after issuing the token, only circulating on DEX. As the team gradually came to a standstill, the token price ultimately headed towards zero, and the project was declared a failure.

What is Backed Finance? The original team of DAOStack is starting again.

Fast forward to 2025, a Swiss company named Backed Finance has emerged in the public eye by launching the tokenized stock product xStocks. Not only does it have partnerships with major exchanges like Bybit and Kraken in CeFi, but it also benefits from the Solana ecosystem in DeFi, becoming a recent hotspot in the crypto space.

( Mortgage US stocks for lending? Analyzing how xStocks collaborates with Solana to maximize tokenization securities liquidity )

Interestingly, LinkedIn data shows that the three co-founders of this company are former core team members of DAOStack: "Roberto Klein, Adam Levi, and Yehonatan Goldman." After announcing the closure of DAOStack, they turned to the new narrative track of tokenization of physical assets, which just happens to align with the current market trend.

Compared to DAOStack, this time they have gained more resources and support from the Kraken, Bybit, and Solana ecosystems, making xStocks one of the first truly tokenized projects that can connect with CEX and integrate on-chain and off-chain.

Is it a successful ride on the wind or another failed imitation? The past team culture of xStocks has been questioned.

The groundbreaking nature of xStocks is undeniable, but doubts from the crypto community continue to emerge.

Facing the past issues of DAOStack: the aggressive fundraising and subsequent soft rug leading to zero, along with the project's lack of a long-term sustainable income model, inevitably leave some investors with reservations. Although the team has now focused on the RWA track, whether they have truly learned from the last failure remains to be seen.

Tokenization projects are expected to emerge like mushrooms after rain in the near future, each promoting narratives of financial combinability, maximized asset liquidity, or on-chain financing tools, providing investors with limitless imagination. However, while being attracted by new technologies and narratives, users should not overlook the history and culture behind the development teams.

The failure experience of DAOStack should not become a permanent label, but there is a fear that xStocks has become a rehash of the old script of that team. After all, the encryption market is always forgetful and always needs to be reminded.

This article on xStocks' past and present: The three founders are exposed as members of the zeroing project DAOStack, raising concerns. It first appeared in Chain News ABMedia.