Tokenized fund redemption is the process where digital tokens representing shares or interests in an investment fund are converted back into the underlying assets or fiat currency. This mechanism provides liquidity and an exit strategy for investors holding tokenized fund units. The redemption process typically follows the rules set forth in the fund’s smart contract and legal documentation.
Context
Tokenized fund redemption is a key aspect for the viability and attractiveness of tokenized investment vehicles, ensuring investor access to their capital. Discussions often focus on the regulatory compliance of redemption processes and the technical efficiency of executing these transactions on-chain. Future developments will aim for seamless integration with traditional fund administration practices and increased automation.
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