A prelude to the theory of Real-World Asset (RWA) Tokenization

Abstract

We provide an introduction to real-world asset (RWA) tokenization, and develop two economic models connecting this emerging market to classical financial theory. In search for a theory of RWA tokenization, we classify RWA tokenization according to the role of the underlying asset, distinguishing standard RWA tokenization, stablecoins, and Digital Asset Treasuries (DATs). Our first model connects tokenization with security design under asymmetric information. Continuous secondary-market trading generates information recovery, reducing adverse-selection costs over time and affecting both the issuance price and the optimal tokenization design. Our second model develops a dynamic corporate-finance framework for DATs, in which market valuation, capital-market financing, and crypto accumulation interact endogenously. We characterize the optimal issuance policy and illustrate the model using \texttt{Strategy} as a case study. A few directions for future research are discussed, providing a starting point for further theoretical and empirical study of RWA markets.