How does Asset Tokenization work?

Asset tokenization is the process by which an issuer creates digital tokens on a distributed ledger or blockchain, which represent either digital or physical assets.

These tokens can represent ownership or rights to an asset and can be traded on-chain.

For example, imagine you have a property worth $500,000.

Asset tokenization could convert ownership of this property into 500,000 tokens — each one representing a tiny percentage (0.0002%) of the property.

When someone buys a token, they buy 0.0002% of the ownership in the asset.

Blockchain guarantees that once you buy tokens representing an asset, no single authority can erase or change your ownership — your ownership of that asset remains entirely immutable.

(1) What is asset tokenization? | Hedera. https://hedera.com/learning/tokens/what-is-asset-tokenization.
(2) What Is Asset Tokenization? | Chainlink. https://chain.link/education-hub/asset-tokenization.
(3) Asset Tokenization: A Short Overview – Morgan Stanley at Work. https://discover.shareworks.com/ipo-and-liquidity-events/asset-tokenization.
(4) The Complete Guide for Asset Tokenization on Blockchain. https://www.blockchain-council.org/blockchain/asset-tokenization/.