cRYPTO Glossary

Asset-backed tokens are digital representations or claims on a physical asset, and their value is directly backed by that asset.

Explanation of Specific Terms:

• Digital representations: Tokens issued on a blockchain or digital ledger that represent ownership or rights to a physical asset.
• Physical asset: Tangible assets such as real estate, precious metals, commodities, artworks, or even financial instruments like loans or receivables.
• Backed by the asset: The value of the tokens is tied to the value of the underlying physical asset. Holders of asset-backed tokens typically have ownership rights or entitlements to the asset's benefits, such as dividends, interest payments, or profit-sharing.

Key Points for Beginners:

• Purpose: Asset-backed tokens allow for fractional ownership of physical assets, enabling broader accessibility and liquidity compared to traditional ownership structures.
• Transparency and security: Blockchain technology provides transparency regarding ownership and transactions of asset-backed tokens, enhancing trust and reducing fraud risks.
• Use cases: Asset-backed tokens can facilitate easier and more efficient trading, financing, or investment in real-world assets, unlocking new opportunities for investors and businesses.