A token does not create value by itself. The quality of a tokenised structure depends on the asset underneath it, the rights attached to it, the evidence supporting ownership and value, the custody model, the legal framework and the route to liquidity.
Start with the asset
The strongest tokenisation opportunities begin with assets that can be independently verified and clearly documented. That means ownership, valuation, custody and any existing liens or restrictions need to be understood before the digital layer is created.
Structure before technology
Once the asset is understood, the next question is what the token actually represents. Different projects may require different legal and economic structures. The smart contract should express a defined commercial framework rather than substitute for one.
Liquidity is the real challenge
Creating tokens is relatively straightforward. Creating credible institutional liquidity is harder. Market counterparties need confidence in the underlying asset, custody, compliance, transfer restrictions and settlement process.
The opportunity
When these elements work together, tokenisation can improve portability, transparency, settlement and access to new forms of liquidity. The future of the sector will be shaped less by novelty and more by disciplined execution.
This article reflects Shane Murphy's personal perspective and is provided for general information only. It is not investment, legal or financial advice.