Structured Finance

Definition ∞ Structured finance involves creating complex financial instruments by pooling various assets and then dividing their cash flows into different tranches with varying risk and return profiles. These instruments are designed to meet specific investor needs and can include asset-backed securities or collateralized debt obligations. In digital assets, this applies to tokenized real-world assets or complex DeFi products. It facilitates efficient capital allocation.
Context ∞ In crypto news, structured finance concepts are increasingly discussed as the digital asset market matures and seeks to attract institutional capital. Reports may cover the tokenization of traditional assets or the development of novel decentralized finance products that repackage risk and yield. The application of structured finance principles to digital assets aims to enhance liquidity and accessibility for a broader investor base.