This is article 3 of a 4-part series co-authored by Franklin Templeton and Animoca Brands.
Franklin Templeton and Animoca Brands have entered into a strategic collaboration to explore and facilitate institutional adoption of tokenized real-world assets, and each party may derive financial or other benefits from the relationship.
The co-authored article series reflects the parties’ opinions on tokenization, real-world assets and the development of financial infrastructure. This article series is for informational and educational purposes only and should not be construed as investment advice, endorsement, recommendation or assessment by Franklin Templeton of Animoca Brands or NUVA, its holdings, or its suitability as an investment. Nothing in this material constitutes an offer to sell, a solicitation of an offer to buy, or a recommendation to purchase or sell any security or other investment.
Introduction
This article examines what tokenization changes for assets and portfolios, what drives demand for tokenized assets, and why tokenization alone is not enough to generate adoption or liquidity. It explores the shift from real-world assets toward the real-world benefits they can provide, and the conditions required for tokenized markets to function at scale.
Read Other Articles in This Series
Article 1: Tokenization, RWAs, and the Future of Finance
The first article considers the strategic significance of tokenization for the industry and for investors, situating the convergence of decentralized and traditional finance within the broader dynamics of blockchain, artificial intelligence, Web3, and the evolving trajectory of the global economy and investing.
Article 2: The Tipping Point for Tokenization: What Has Brought Us to This Point, and Where Is It Taking Us?
The second article focuses on the factors that have brought the industry to this inflection point, and presents a framework for understanding how blockchain technology is reshaping traditional relationships between assets, money, and infrastructure, and redefining the scope and roles of industry participants.
Article 4: Institutional Grade Solutions – coming soon
The fourth and final article describes a potential institutional solution to many of the issues explored throughout the series. It examines how NUVA seeks to bridge decentralized and traditional finance through on-chain vaults, primary and secondary liquidity mechanisms, broader access to institutional-grade real-world assets, and an institutional control architecture spanning people, code, and operations.
DISCLOSURE
This report has been jointly prepared and is published by Animoca Brands Research and Franklin Templeton for informational and educational purposes only.
The views expressed in this report are for general purposes only and are not intended to guide investment choices or serve as a substitute for legal, financial, or other professional advice. This report does not take into account any particular circumstances or objectives of the reader. Nothing in this report constitutes, or is to be construed as, an offer, invitation, solicitation or recommendation to buy, sell or subscribe for any security, any interest in any fund or collective investment scheme, any cryptocurrency or digital asset, or any other product or service, or to engage in any investment activity, in any jurisdiction.
References in this report to any specific fund, company, product or service are for illustrative purposes only and do not constitute an offer or recommendation of that fund, product or service; any fund referred to in this report is offered only pursuant to its official offering documents and only in jurisdictions in which it is authorized or registered for distribution. Assets, instruments or funds referred to in this report may not have been authorized by a regulatory authority for the public.
An investment in a money market fund is not a bank deposit and is not insured or guaranteed by any government or government agency, and it is possible to lose money by investing in such a fund. This report is not directed at and may not be distributed to or relied upon by, any person in any jurisdiction where such distribution or use would be contrary to applicable law or regulation. Redistribution or reproduction without our written consent is prohibited. This report is not intended to guide investment choices in respect of the acquisition, holding, or disposition of any cryptocurrency (or digital asset) or serve as a substitute for legal, financial, or other professional advice. Cryptocurrencies and digital assets carry inherent risks; always conduct your own research before making any investment decisions.
Discussions in this article may be theoretical in nature and are intended to explore the future potential of developing infrastructure and technologies. The concepts, technologies, and activities discussed may not develop or materialize as described. This information is provided for educational and informational purposes only.
Blockchain technology represents a new and rapidly evolving industry which is subject to regulatory uncertainty, competitive pressures, security risk, limited performance history and volatility. Digital Assets and Cryptocurrencies are highly speculative investments that are subject to significant risks. Cryptocurrency investments are subject to various risks, including inability to develop digital asset applications or to capitalize on those applications, theft, loss, or destruction of cryptographic keys, the possibility that digital asset technologies may never be fully implemented, cybersecurity risk, conflicting intellectual property claims, and inconsistent and changing regulations.
Accordingly, readers should consider the appropriateness of the information in this report and, if necessary, seek professional advice. Any decisions based on this report are solely the reader’s responsibility. The authors of this report, as well as Animoca Brands Research, Franklin Templeton and their respective affiliates, may hold positions in the securities, funds, cryptocurrencies or digital assets mentioned in this report.