A type of non-fungible tokens (NFT) (in turn, backed crypto assets) that represent ownership of physical or tangible assets connected to the blockchain. Non-fungible tokens (NFTs) are tokens that can provide a category of asset backing, representing ownership of certain physical assets as well as digital assets like digital art, collectibles, or virtual real estate.

Hard NFTs are a classification of non-fungible tokens are only limited to a category of real-world assets (RWAs) consisting of real estate properties, commodities, equipment and machinery. In the blockchain space, digital tokens represent these physical assets. The tokenization of RWAs is seen as one of the largest market opportunities in the blockchain industry, with a potential market size in the hundreds of trillions of dollars.

RWAs are tangible assets, among other types of assets, that exist outside the digital space. These can range from distinct movable and immovable assets. In the blockchain space, digital tokens represent these physical, tangible assets. Backed by traditional assets, RWAs can form sustainable and reliable digital asset classes that capitalizes on decentralized finance as a direct competitor to traditional finance. Moreover, RWAs are recognized and valued in the real-world economy, and their integration into blockchain networks opens up new avenues for value creation in areas such as finance, investment and trading.

By nature, hard NFTs reflect ownership in physical assets (hard items) that is established by a unique digital certificate held as an entry on blockchain. Such tokens represent something unique (with non-fungible features), and hence each non-fungible asset/ token has unique identification codes and metadata that set them apart from other assets on the blockchain. In contrast to cryptocurrency, non-fungible tokens are not mutually interchangeable, and consequently cannot be used as a medium of exchange for transactions. Examples include unique digital certificates that specify the owner of a certain form of physical assets such as distinct real estate property, physical artwork, and antique items.

As opposed to hard NFTs, the other category, known as soft NFTs, represents ownership of digital assets created and maintained on the blockchain.