Real-World Asset

Definition ∞ An asset that exists in the physical world, such as real estate, commodities, or traditional financial instruments, which is represented by a digital token on a blockchain. This tokenization allows for fractional ownership, increased liquidity, and more efficient transferability. ‘Real-World Asset’ integration aims to bridge traditional finance with decentralized systems.
Context ∞ The integration of ‘Real-World Asset’ tokenization is a significant trend currently shaping the digital finance landscape. Protocols are actively developing frameworks to represent diverse tangible assets as digital tokens, thereby unlocking new investment avenues. Debates are ongoing concerning the legal and regulatory implications of such tokenization, particularly regarding property rights and asset custody.