RWA glossary
Plain-English definitions of the terms used around tokenized real-world assets.
A
- Accredited investor
- In US securities law, an individual or entity that meets income, net worth or professional tests and may invest in private offerings.
- Accumulating token
- A yield-bearing token whose price rises as interest accrues, while the number of tokens you hold stays the same.
- Allowlist (whitelist)
- A list of wallet addresses approved to hold or receive a permissioned token. Transfers to addresses not on the list fail.
- AML (Anti-Money Laundering)
- Rules and checks that financial firms use to detect and prevent money laundering and terrorist financing.
- Attestation
- A report by an accounting firm confirming that an issuer holds the assets it says back its tokens, at a point in time.
- Audit
- An independent examination of a company's or fund's financial statements and controls, usually covering a full year.
B
- Bankruptcy-remote
- A legal structure that keeps assets separate from a company's own estate, so creditors of the company can't claim them if it fails.
- Bridge
- Infrastructure that moves tokens between blockchains, usually by locking them on one chain and minting a copy on another.
C
- Carbon credit
- A certificate representing one tonne of carbon dioxide removed or not emitted, which can be traded or retired to offset emissions.
- CLO (collateralized loan obligation)
- A security backed by a pool of corporate loans and split into tranches with different credit ratings.
- Collateral
- An asset pledged to secure a loan or a trading position, which can be sold if the borrower doesn't repay.
- Custodian
- A regulated firm that holds assets on behalf of their owners, such as a bank holding securities or a vault operator holding gold.
D
- DAO treasury
- The pool of funds controlled by a decentralized organization's token holders.
- Default
- When a borrower fails to make payments as agreed. In a lending pool, defaults reduce what lenders get back.
E
- ERC-3643
- An Ethereum token standard for permissioned tokens that links wallets to verified onchain identities and checks compliance rules on every transfer.
F
- Fractional ownership
- Owning a share of an asset rather than the whole thing, such as part of a property or a fraction of a gold bar.
G
- GENIUS Act
- The US law, signed in July 2025, that created a federal framework for payment stablecoins and bars their issuers from paying interest to holders.
- Governance token
- A token that gives holders voting rights over a protocol's decisions, and sometimes a share of its fees.
H
- HELOC (home equity line of credit)
- A revolving loan secured by the equity in a borrower's home.
K
- KYC (Know Your Customer)
- Identity checks an issuer or platform runs before letting someone invest, usually verifying name, address, identity documents and sanctions status.
L
- Layer 2
- A network that runs on top of a base blockchain such as Ethereum, offering lower fees while relying on the base chain for security.
- Liquidation
- The forced sale of collateral when a loan becomes under-secured.
- Liquidity
- How quickly and cheaply an asset can be turned into cash without moving its price.
- London Good Delivery
- The standard set by the London Bullion Market Association for gold and silver bars traded in the wholesale market, covering purity, weight and refiner.
M
- Market cap
- A token's price multiplied by the number of tokens in circulation.
- Mint
- To create new tokens. For RWAs, tokens are minted when an investor subscribes and the issuer receives payment.
- Money market fund
- A fund that invests in short-term, high-quality debt such as Treasury bills and repo, aiming to keep a stable value and offer daily liquidity.
- Multi-chain token
- A token issued on several blockchains, either natively on each or through bridges.
N
- NAV (net asset value)
- The value of a fund's assets minus its liabilities, usually expressed per share. Tokenized fund shares are minted and redeemed at NAV.
O
- Onchain equity
- Company shares issued natively on a blockchain, where the token itself is the legal share record.
- Onchain identity
- A blockchain record that holds verified claims about a wallet's owner, such as having passed KYC or being an accredited investor.
- Onchain value
- RWA Tracker's term for the value of the tokenized assets a product has issued onchain, taken from DefiLlama.
- Oracle
- A service that brings off-chain data, such as prices or reserve balances, onto a blockchain for smart contracts to use.
P
- Permissioned token
- A token that can only be held or transferred by approved wallets, used for tokenized securities that must follow investor eligibility rules.
- Pre-IPO shares
- Shares of a private company before it lists on a stock exchange, normally hard for individual investors to buy.
- Private credit
- Lending to businesses or households outside public bond markets, by funds and other non-bank lenders.
- Proof of reserves
- A way of showing that a token is fully backed, by publishing reserve balances that can be checked against the token supply, sometimes automatically onchain.
Q
- Qualified purchaser
- A US investor category above accredited investor: generally individuals with at least $5 million in investments, or institutions with at least $25 million.
R
- Real-world asset (RWA)
- A real-world asset is a traditional financial or physical asset, such as a treasury bill, loan, share or bar of gold, that is represented by a token on a blockchain.
- Rebasing token
- A token whose balance in each holder's wallet changes automatically, so the price stays fixed while the amount you hold grows with yield.
- Redemption
- Returning tokens to the issuer in exchange for cash, stablecoins or the underlying asset.
- Regulation D
- US rules that let companies sell securities privately, mainly to accredited investors, without a full SEC registration.
- Regulation S
- US rules covering securities offered only outside the United States to non-US persons, which don't need SEC registration.
- Repo (repurchase agreement)
- A short-term loan where one party sells securities and agrees to buy them back shortly after at a slightly higher price, often overnight.
S
- Secondary market
- Trading of tokens between investors, on exchanges or DEXs, rather than minting or redeeming with the issuer.
- Security token
- A token that represents a security, such as a share, bond or fund unit, and is subject to securities laws.
- Smart contract risk
- The risk that a bug or compromised admin key in a token's code leads to lost or frozen funds.
- SPV (special purpose vehicle)
- A company set up for one purpose, such as owning a single property or holding a pool of loans, so that its assets and risks are kept separate.
- Stablecoin
- A token designed to hold a stable value, usually $1, backed by cash and short-term government debt held by the issuer.
T
- T+1 settlement
- The standard settlement time for US stock trades: one business day after the trade date.
- Tokenization
- Tokenization is the process of representing ownership of an asset, such as a fund share, bond or ounce of gold, as a token on a blockchain.
- Tokenization platform
- A company or protocol that handles putting assets onchain: creating tokens, onboarding investors, keeping the ownership record and processing subscriptions and redemptions.
- Tokenized stock
- A token that tracks the price of a listed share and is backed by the share held by an issuer or custodian.
- Tokenized treasury
- A token representing a share of a fund or note that holds US government debt, usually short-term Treasury bills.
- Tranche
- A slice of a loan pool or structured product with its own priority for payments and losses. Senior tranches are paid first; junior tranches absorb losses first.
- Transfer agent
- A firm that keeps the official record of who owns a security and processes transfers. In tokenized funds, the blockchain can serve as that record.
- Treasury bill (T-bill)
- A short-term debt security issued by the US government, maturing in one year or less and sold at a discount to its face value.
- Troy ounce
- The unit used for precious metals, equal to about 31.1 grams, slightly heavier than a regular ounce.
- TVL (total value locked)
- The value of assets held in a protocol's smart contracts. For RWA products, DefiLlama's TVL figure measures the value of the tokenized assets.
Y
- Yield-bearing token
- A token whose holders earn a return, either through a rising price, new tokens paid out, or a growing balance.