The wider world · 77 / 86 · 3 min
Real-world assets
A real-world asset token claims to be a treasury bill, a house, a share, or an invoice. The token is only as good as the legal claim and the company in the middle.
The token is only as good as the legal claim and the company in the middle.
A worked case
A token says it is a treasury bill. The buyer cannot name the custodian or the court. The ticker still says bill. If the company in the middle fails, the token is a record of a claim they may not be able to redeem.
The claim
Someone must hold the actual asset and owe it to the token holders. That someone can go bankrupt, refuse redemption, or sit in a country that will not enforce your claim.
The check
What do you receive if you redeem. Who is the custodian. What court would hear you. A ticker that says T-bill is not a T-bill.
The chain records the token. The law records the asset. You need both.
The token said bill. The claim said read the company.
Real-world asset tokens claim to be a treasury bill, a house, a share, or an invoice. The chain holds the token. A company, a custodian, and a legal document are supposed to hold the thing. If you cannot name the custodian and the court, you have a ticker. Celsius customers had a version of this confusion in reverse: an app that felt like a bank account and was, in bankruptcy, a pile of claims. The token version can fail the same way if the company in the middle fails or never owned the asset.
USDC is the most ordinary real-world asset in this market: a claim on reserves that include treasury bills and bank deposits. March 2023 showed what a bank deposit inside that claim can do to the price for a weekend. Circle published the numbers. The peg returned after a government decision about the bank, not after a smart contract executed.
A token does not own a building. A legal structure does, if it exists. Read that, or treat the token as a story with a price.
Read it yourself
These links are the record. They are not a recommendation, and they are not instructions. A news story or a court paper can still be wrong about a detail. The check does not change because a famous name is in the story.
Apply the check
Open a question. The line is about this topic. It is not a verdict that anything is safe.
The company, from fees. You, only if the legal claim pays.
That company, and the law of the claim. Not the chain, by itself.
The company, by refusing redemption. A court, if the claim was never real.
Check yourself
Does the token itself own the building?
No. A legal structure and a custodian sit between you and the asset, if they exist at all.
After this you can name the custodian and the redemption, or treat the token as a story.