Concept

Backed crypto assets represent a category of crypto assets that are backed by other assets (real assets, financial assets, or even digital assets). Backed crypto assets are, in turn, divided into tokenized traditional assets (tokenized assets) and assets backed using a stabilization mechanism (stablecoins). Stabilized assets are grouped as those referring to a single fiat currency and those referring to other assets that provide a stable performance over time. Backed crypto assets also include the distinct category of non-fungible tokens (NFTs)- tokens that can provide a category of asset backing, representing ownership of certain digital assets like digital art, collectibles, or virtual real estate. In turn, NFT-backed tokens can be classified in two categories: hard NFTs, which represent ownership of physical assets connected to the blockchain, or soft NFTs, which represent ownership of digital assets created and maintained on the blockchain.

Classification

A prime example of backed crypto assets is an asset-backed token. Backed assets are a kind of tokenized structured products that track the value of certain assets, usually tradable (publicly traded). Asset-backed tokens can be classified into multiple types (types of asset-backed tokens), depending on the underlying assets:

• Tangible assets backed tokens: these tokens represent ownership of real assets like property, precious metals, or artworks. A token is backed by a particular tangible asset, and hence provide a digital form of ownership.
• Commodity backed tokens: tokens that are backed by commodities such as gold, silver, oil, or agricultural products. Each token represents ownership of a specific amount of the underlying commodity, and hence holders can have access to commodity markets via blockchain technology.
• Equity backed tokens: tokens that represent ownership in equity instruments such as stocks and shares in funds. These tokens allow fractional or partial ownership of ventures or net assets, providing access to equity markets through blockchain.
• Debt backed tokens: tokens that represent ownership in debt instruments, like bonds, notes, and loans. These tokens offer investors partial ownership of debt obligations, providing opportunities for diversification and access to debt markets.
• NFT assets backed tokens: non-fungible tokens (NFTs) can provide a category of asset backing, representing ownership of certain digital assets like digital art, collectibles, or virtual real estate. In turn, NFT-backed tokens can be classified in two categories: hard NFTs, which represent ownership of physical assets connected to the blockchain, or soft NFTs, which represent ownership of digital assets created and maintained on the blockchain.