Tokenization is built on definitions that everybody disagrees on.
RWAs have grown from a niche experiment to an $18B+ market in the past few years.
However, there is a core problem that the industry can't solve; we can't agree on what a 'tokenized asset' actually is.
This sounds silly, but as the market grows, confusion will break things.
Without a clean taxonomy we get:
- Pointless debates
- Bad comparisons
- Inconsistent data across platforms
Tokenization is supposed to bring clarity to finance, but we keep getting asked: 'Why is this counted as a tokenized asset on your platform?' This is a tragedy, as there are so many more interesting questions.
- Which assets offer the best risk-adjusted returns?
- How are investors protected?
- How can these assets be used across different platforms?
Tokenized assets fall victim to their own success. When we started
@RWA_xyz in 2023, the space was small enough that you could name every product. Now there are 400+ assets spanning use cases that were once unimaginable.
People tokenize assets for different purposes, but everything is getting shoved under the same label. Imagine calling ETFs, hedge funds, and private equity all just "funds", then comparing their performance.
After 100+ conversations, we have created a framework to solve this. We identified two attributes that leave no doubt.
1. Can the token be moved to a wallet outside the issuing platform?
2. Can the token be transferred peer-to-peer between wallets?
Based on these criteria, we are introducing two new categories of tokenized assets: Distributed Assets and Represented Assets.
Distributed Assets are tokenized assets that can be moved to wallets outside the issuing platform and transferred between wallets, including those with whitelist or eligibility controls.
The core value proposition centers on:
- Market reach
- Financial inclusion
- Platform interoperability
Benefits enabled by distributing assets to onchain investors.
Represented Assets are tokenized assets that cannot be moved to wallets outside the issuing platform or transferred between wallets, whether due to design or regulatory constraints.
The core value proposition centers on:
- Operational efficiency
- Improved reconciliation
- Infrastructural upgrades
Benefits enabled by representing assets on a shared ledger.
Mobility and transferability matter because they unlock the full potential of tokenization: the ability to compose with other protocols and integrate with DeFi infrastructure. As more assets are distributed onchain, it is our hope that tokenization will deliver novel utility to users rather than replicating existing structures in a new format.
We remain committed to refining this framework to support the vision of a truly open and interoperable financial system.