Fidelity

Definition ∞ Fidelity, in a financial context, denotes the degree to which a digital asset or its representation accurately corresponds to its underlying value or a defined standard. Within the digital asset domain, this relates to the precision with which a tokenized asset mirrors the characteristics of its real-world counterpart or the accuracy of data recorded on a blockchain. High fidelity ensures that the digital representation serves as a reliable proxy for the physical or financial instrument it represents.
Context ∞ Discussions regarding fidelity are particularly pertinent in the context of Real World Asset (RWA) tokenization, where the accurate mapping of legal and economic rights to on-chain tokens is paramount. Ensuring the integrity and trustworthiness of these digital representations is critical for institutional adoption and regulatory compliance, as it underpins the perceived value and security of these digital instruments.