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0 pointsNextgrid5mo ago0 comments

> Tokenizing all assets (equities, commodities, real estate, etc.)

How does that work?

The blockchain can only enforce its desired state on the blockchain itself. It cannot affect the real world unless you delegate said effects to a trusted party... which defeats the whole point of a decentralized, trust-less blockchain, and you could let that trusted party just run a centralized database.

How do you reconcile the ability to lose a private key with real-world assets? In the "fiat" system we rely on courts to be the ultimate arbiters in such cases and it works well enough. In this system, what should happen if someone owning a tokenized real estate asset loses the corresponding private key?

> The act of trading the tokenized asset also settles the trade

This again only works on the blockchain. When the tokens represent real-world assets the two are not in sync, and there's a risk they may not be reconcilable (you "buy" some real-estate on the blockchain, but the government having jurisdiction over the real-world location contests your ownership claim and people in uniform with guns prevent you from entering into said real estate).

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spir5mo ago

> which defeats the whole point of a decentralized, trust-less blockchain, and you could let that trusted party just run a centralized database

A centralized token (like USDC) being held in a trustless wallet is much much better and more useful than the traditional financial system.

For example, USDC in my wallet can be lent out in any onchain lending venue I pick and be sent to anybody in the world instantly.

> lose a private key with real-world assets

You're right, private key security is super important. The practical solution here is that there will be many different kinds of wallets with different trust assumptions and recovery models, and people/corporations will be directed to use the one that's net best for them. Many will be fully or semi custodial.

> When the tokens represent real-world assets the two are not in sync, and there's a risk they may not be reconcilable

Right. The idea here is to have very stringent evaluations of tokenization frameworks, to figure out which real-world asset tokens are actually quality bearer assets (from both a legal and technical standpoint) and which are not. An early example of the work here is BlueChip's stablecoin ratings https://bluechip.org/en

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