As asset tokenization gains broader adoption, debates over what truly qualifies as “tokenized assets” have intensified. The traditional binary classification (tokenized vs. not tokenized) no longer captures the complexity of today’s market. This oversimplification has created widespread confusion, making it difficult for investors to understand what they’re actually buying.

To address this challenge, we’re developing a comprehensive taxonomy that will evaluate tokenized assets based on functional characteristics. Our starting point is what we believe to be the most important marker of real utility for onchain investors: whether an asset allows users to invest, sell, and receive distributions directly through onchain infrastructure.

Based on this principle, we classify tokenized assets into three distinct categories:

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Onchain Native

Tokens that use the blockchain as the definitive record of ownership and allow investors to invest, sell, and receive distributions onchain using stablecoins through primary and/or secondary markets. These assets may also support fiat connectivity through on/off-ramps, providing flexibility without compromising their onchain nature.

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Onchain Represented

Tokens that maintain the blockchain as the authoritative record of ownership but rely on traditional financial rails for all investor interactions. While the ledger is onchain, activities such as investing, selling, or receiving distributions are executed offchain through banks or other intermediaries.

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Digital Twin (not listed on RWA.xyz)

Tokens that simply mirror or track offchain assets without using the blockchain as the source of truth. Investors cannot directly interact with these tokens as they function more like informational reference. As such, they fall outside the scope of what we consider true tokenized assets.

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Looking Ahead

This classification of onchain functionality is just the beginning of our broader taxonomy framework. Over time, we’ll introduce additional attributes that provide deeper insight into how each asset is structured and operates. Our goal is to help investors understand not just what they’re buying, but how it actually works and why it matters.