“Buy a fraction of this building.” It sounds clear, but may describe very different arrangements. To understand what you hold, identify the right associated with the token and the party responsible for honouring it.
The first RWA guide separated the asset, right and token. Here we examine the legal layer without assuming one structure works in every country.
Four different promises
A project might provide an interest in a company that owns an asset. Your rights would depend on that interest and the company’s documents.
Another might offer a claim against a debtor: a company owes you payment under an agreement. That does not necessarily make you an owner of the financed asset.
A third might provide a collection right for a quantity of goods, subject to procedures, fees and limits. A fourth might provide only exposure to a price, without any delivery right.
These are possible structures, not classifications applying to every token. The UNIDROIT Principles on Digital Assets and Private Law explain why technical control and legal rights require separate examination.
An example that changes the offer’s meaning
Imagine two fictional projects. Project A documents an interest in a company owning a building. Project B promises only a fraction of specified income. Both websites display the same building photograph and advertise “fractional property”.
Voting, resale, repayment and default questions may have different answers. The French AMF has warned about ambiguous property royalty offers: in the arrangements concerned, investors were creditors of the company rather than owners of the building.
Find the document creating the right
Look for the issuer’s legal identity, subscription or issuance agreement and documents defining rights. A white paper can explain a project without being the complete contractual undertaking.
For our fictional example, a reading sheet could record five answers: the company making the commitment; the payment or delivery promised; the conditions; the transfer procedure; and the route for resolving a dispute. A blank field is an unanswered question, not freedom for the holder.
Applicable law and the place where disputes are handled also matter. Marketing translations do not replace the legally relevant documents.
When something goes wrong
Suppose the operator stops paying while the token remains transferable. The blockchain does not automatically enforce a debt for you. You need to identify whom a claim is against, which assets are available and what other rights affect them.
Losing a key or transferring a token to an ineligible person can also lead to different procedures under different arrangements. A simple technical transfer does not make every legal situation simple.
Check your understanding
A token entitles you to some of a company’s income. Does that mean you directly own a room in its building? No. Read the exact right rather than extending the marketing metaphor.
Remember: describe what you hold in one precise sentence: a defined right against an identified party, subject to known conditions.