> For the complete documentation index, see [llms.txt](https://own-protocol.gitbook.io/docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://own-protocol.gitbook.io/docs/stock-splits.md).

# Stock Splits

## Stock Split Handling in Own Protocol

### Overview

**Own Protocol supports stock splits natively** through its xToken architecture and onchain oracle coordination. When a stock undergoes a split — e.g., 2:1 or 1:2 — the protocol ensures that all synthetic balances and price feeds are **automatically and accurately updated** to reflect the new structure.

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### How It Works

#### 1. **Oracle Flags Price Deviation**

When a stock split occurs in traditional markets, the price of the stock adjusts suddenly (e.g., from $200 to $100 in a 2-for-1 split).

Own’s oracle infrastructure detects this **sudden price deviation** and flags the event as a **potential stock split**.

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#### 2. **Governance Verification**

Once flagged, the event is subject to protocol governance approval to **verify the legitimacy of the stock split**.

This avoids false triggers and ensures that only real-world corporate actions result in token-level adjustments.

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#### 3. **Protocol Executes Stock Split**

After verification, the protocol executes the split:

* **All xToken balances are updated** based on the new split ratio
* **The xToken price is scaled down proportionally**
* **Total value held remains unchanged**

This ensures **perfect continuity** of user exposure without requiring any manual action from users.

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### Example: 2:1 Stock Split

* Original Price: $200
* User holds: 5 xTSLA (synthetic Tesla)
* After split:
  * New Price: $100
  * New Balance: 10 xTSLA
  * Total Value: **Still $1,000**

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### Why This Matters

* Users don’t need to take any action — **the split is handled entirely onchain**
* Ensures **accurate exposure parity** with the real-world asset post-split
* Keeps Own Protocol **synchronized with traditional equity events** while remaining decentralized

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### TL;DR

| Feature               | Description                                             |
| --------------------- | ------------------------------------------------------- |
| **Oracle Monitoring** | Detects sudden price changes to flag potential splits   |
| **Governance Role**   | Confirms real-world stock split before applying onchain |
| **xToken Adjustment** | Balances and prices are scaled proportionally           |
| **User Impact**       | No action needed — exposure remains identical           |
| **Split Types**       | Supports both regular & reverse splits                  |