Unit 2 · Level 5 · RWAs & tokenization
The custody question
Every RWA token hides the same question: WHO holds the actual bond, building, or gold bar, and what does your token legally entitle you to if they fail? Some tokens are proper claims in a bankruptcy-remote structure; others are IOUs from an offshore company. Same-looking tokens, wildly different rights. The answer lives in legal documents, not in the smart contract.
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What you get asked
Why can't a smart contract alone guarantee that a real-world asset backs your token?
Code can control tokens; it cannot make a custodian keep bonds in a vault. For RWAs, the blockchain records claims; courts and contracts enforce them.
What does 'bankruptcy-remote' mean in a good RWA structure?
The backing assets live in their own legal box (often an SPV) so that if the issuer implodes, the box's contents belong to token holders, not to the issuer's other creditors.
The party that physically or legally safeguards the real asset behind an RWA token is called the ___.
Ironic, isn't it? Crypto set out to remove trusted middlemen, and every RWA token quietly reintroduces one. Not fatal, but it has to be priced in.
Match the RWA due-diligence question to why it matters
Four questions, all answered off-chain. If the docs are vague on any of them, the vagueness IS the answer.
March 2023: USDC briefly fell to about $0.87 because ~$3.3B of its reserves sat in the collapsing Silicon Valley Bank. The lesson for all RWAs?
The chain worked flawlessly that weekend; the bank didn't. Every real-world asset drags its real-world failure modes on-chain with it. Know your wrapper. 🐜
The rest of this unit
Treasuries, buildings, and funds on-chain, and the awkward question of who holds the real thing.