Illiquid assets

Illiquid assets are the core problem that tokenization sets out to ease. They include real estate, art and collectibles, stakes in private equity or venture capital funds, infrastructure, physical commodities and intellectual property. Their common trait is the absence of a secondary market that grants immediate liquidity, which locks up capital and raises the cost of exiting a position.

Tokenization works on that friction in several ways. The asset is usually placed under a special purpose vehicle (SPV) or trust, and that vehicle's interests are tokenized, enabling fractional ownership with low entry tickets. The tokens can trade on digital markets, bringing liquidity to a traditionally illiquid asset, while smart contracts automate distributions such as rent or dividends and a custodian holds the asset and issues attestations of its existence and proper custody.

Fractional ownership broadens access to assets once reserved for large or institutional investors and allows diversification across asset classes. It is the use case that underpins RWA tokenization. Real-world examples carry names: RealT, which tokenizes US rental housing through one LLC per property; managers such as KKR and Hamilton Lane, which have offered tokenized interests in their funds; the historic St. Regis Aspen Resort; or Maecenas in art tokenization, where secondary-market liquidity remains limited and valuation depends on specialist appraisal.