1. What does tokenizing real-world assets mean?
Tokenizing real-world assets means converting physical or traditional financial assets into digital tokens on a blockchain, allowing easier transfer, trading, and ownership tracking.
2. Why is Ethereum popular for asset tokenization?
Ethereum is widely used as it offers strong smart-contract tools, a large developer community, and scalable Layer-2 networks that lower costs and support secure, programmable assets.
3. What types of assets can be tokenized?
Assets such as real estate, government bonds, private credit, commodities, investment funds, art, and carbon credits can all be turned into tokenized versions on blockchain networks.
4. What benefits do tokenized assets provide?
Tokenized assets offer faster settlement, lower operational costs, fractional ownership, improved liquidity, and greater global access compared to traditional financial systems.
5. What challenges still exist in tokenizing real-world assets?
Key challenges include regulatory uncertainty, legal recognition of on-chain ownership, reliable off-chain data, secure custody, and standardization across different platforms.