As market supply moves along the adoption curve, it becomes increasingly clear that a lack of data availability, data analytics, and data quality significantly complicates the implementation of structured due diligence and oversight processes for investors. This exposes tokenized assets to a variety of risks throughout their lifecycle. These risks are evident in the contractual terms of new asset creation, asset characteristic changes, issuance, trading, storage, and valuation of the underlying assets.
Investors need to understand the potential risks inherent in the value chain and the intermediaries involved. It is imperative to understand the unique product structure inherent in the creation, manufacturing and distribution process, as well as the impact on operational infrastructure, valuation mechanisms, regulatory frameworks, financial compliance and execution. This will enable investors to mitigate risks and increase confidence in their respective shares and stakeholders to allocate liquidity to high quality offerings.
