Resources
The tokenization guide
Written in the order the decisions actually have to be made, and honest about which of them are expensive to reverse. Most guides start at the token; the token is close to the last thing you should decide.
Decide these first
Each of these is difficult and costly to change after issuance. Everything downstream assumes them.
- What exactly does the holder own?A claim against a vehicle, or the asset directly? In almost every jurisdiction it is the former, and the vehicle’s constitution is what defines the entitlement.
- Under whose law?The governing law determines enforceability, and it must work where the asset is as well as where the investors are.
- Who may hold it?Investor eligibility drives the token standard, the offering restrictions and the secondary market. Deciding it late means rebuilding all three.
- Who values it, and how often?For anything not exchange-traded, the valuation methodology is the number. Get a signatory and a cadence before you offer.
- Who services it?Somebody has to calculate income, pay it, handle corporate actions and answer holders. This is the decade-long cost and it is routinely underestimated.
Then, and only then, the token
The standard follows from the instrument: whether it is fungible, whether it is fractionalised, and whether a transfer depends on who the recipient is.
- A restricted security needs on-chain eligibility. A standard without it is not a shortcut — it is evidence that the instrument and the standard do not match.
- Fungibility describes the claim, not the asset. A yacht is unique; shares in the company that owns the yacht are interchangeable.
- Decimals should reflect the smallest unit the instrument can genuinely be held in, not the largest number the standard permits.
- The administrator model — who can freeze, force-transfer or recover — is a disclosure, because it defines what can be done to a holder’s position.
The mistakes that recur
- Marketing illiquid assets as liquidDivisibility and transferability are necessary for a secondary market and nowhere near sufficient. A buyer is required, and for a single-building interest there may not be one at any price.
- Treating investor money as revenueIt belongs to the investor until an allocation settles. Recognising it early misstates the balance sheet and obscures whose money it is.
- Rounding each holder independentlyA distribution split by rounding every share leaves the issuer a few minor units out every cycle. Over a thousand holders and twelve months it becomes an unexplainable break.
- Paying today’s register for an old record dateIt pays the people who bought since and not the ones who sold, and both will notice.
- Leaving the structure until lastThe legal claim is the product. If the vehicle is defective, no amount of cryptography repairs it.