Tokenized assets: the basics

A token is a digital record. Understanding a tokenized asset starts with understanding what that record represents.

Separate the record from the asset

Tokenization connects a digital unit to an asset or a set of rights. The connection is not self-explanatory: the product’s structure and documentation determine what a holder can claim. Two tokens with similar names may represent very different arrangements.

Ask how the connection is maintained

Who creates the token? Where is the underlying asset held? How are the records reconciled? What happens when the asset changes or someone wants to redeem? Those questions are as important as the blockchain on which the token moves.

Useful infrastructure needs clear boundaries

A transferable record can make integration and verification easier. It does not, by itself, establish that an asset can be sold instantly, used everywhere or redeemed on demand. Those features depend on the specific product and the services around it.

That is why our work on tokenized stocks goes beyond issuing a token. Read about Castar’s next chapter.