RWA Glossary

Key Terms in the RWA Ecosystem

RWA (Real-World Asset)

A physical or traditional financial asset — such as real estate, commodities, private credit, or infrastructure — that has been tokenized and represented on a blockchain.

Tokenization

The process of representing ownership rights, economic interests, or claims in an asset as a digital token on a blockchain.

Secondary Market

A marketplace where previously issued assets are traded between investors, as opposed to a primary market where assets are first sold by the issuer.

Primary Issuance

The initial offering of a tokenized asset by an issuer to investors, typically through a regulated or exempt offering process.

Liquidity

The ease with which an asset can be bought or sold in the market without significantly affecting its price. Many RWA tokens have limited liquidity.

KYC (Know Your Customer)

The process of verifying the identity of an investor or user, typically required by financial regulators to prevent fraud and money laundering.

AML (Anti-Money Laundering)

A set of laws, regulations, and procedures designed to prevent the proceeds of criminal activity from being disguised as legitimate income.

Accredited Investor

An investor who meets certain income, net worth, or professional criteria set by securities regulators, often required to access private or alternative investment offerings.

Transfer Agent

An entity responsible for maintaining records of securities ownership and managing the transfer of those securities between parties.

Custodian

An institution responsible for holding and safeguarding financial assets on behalf of investors, including digital assets or tokenized securities.

Smart Contract

A self-executing program stored on a blockchain that automatically enforces the terms of an agreement, such as transfer eligibility rules or payment distributions.

Security Token

A digital token that represents a financial interest subject to securities laws, often backed by real-world assets such as equity, debt, or real estate.

ATS (Alternative Trading System)

A trading venue registered with regulators that facilitates the buying and selling of securities outside of traditional stock exchanges, common for tokenized asset secondary markets in the US.

Lock-up Period

A defined period during which an investor is not permitted to sell or transfer their tokenized asset position.

Cap Table

A record of the ownership structure of an asset or company, showing who holds what interests. Tokenized assets often use blockchain-based cap tables for transparency and automation.

Last reviewed: August 25, 2026