A tokenized asset represents a legal claim on an underlying real-world asset, recorded on a distributed network rather than in a traditional register managed by a transfer agent, depositary, or fund administrator. The physical or legal asset remains stationary: a tokenized government bond stays with its issuer, a share remains on the corporate register, and physical gold rests in a vault. Tokenization simply transforms the way we record, track, and transfer entitlement to that underlying value.
Three parts make up every tokenized asset:
The token. A balance in a register, with rules about who may hold it and how it moves.
The claim. What the holder owns in law, which the token does not tell them.
The obligor. The named company that has to deliver when the holder asks.
Tokens that behave identically on the network can carry very different claims. One gold token entitles its holder to take metal from a named vault. Another pays a cash amount calculated from the gold price, with no right to metal at all. Both balances read the same on screen and both move with the price of gold.
What separates those two tokens is how the issuer sets each one up. Almost every tokenized asset an institution will meet uses one of four structures: native issuance, a vehicle unit, a custodial claim, or a reference exposure. They differ in one respect, the legal path between the holder and the asset, and that path decides what the holder receives while the position is held. This article takes the four in order, from the strongest claim on the asset to the weakest, and closes with how to tell from the documentation which one is in front of you.
This article describes each one, what the holder receives while they hold it, and how to tell from the documentation which structure is in front of you.
The Register Records the Balance, the Document Sets the Rights
Every security already has a register of holders. In conventional markets, it sits with a transfer agent, a depositary or a fund administrator, updating on instruction during business hours.
Tokenization moves that list onto a decentralized network. Ownership then becomes a balance rather than an entry someone else amends on request, so a transfer settles in seconds at any hour instead of waiting for an instruction to be processed. A position held this way also divides freely, into fractions a conventional register would not support.
Alongside ownership, the same on-chain record also carries the rules for moving it, which is what makes a token usable in an institutionalized product. A regulated token keeps a list of addresses allowed to hold it, so a transfer to anyone who has not been onboarded fails at the moment it is submitted rather than being unwound days later. To enforce regulations and comply with legal orders, issuers retain administrative control, such as the ability to pause transfers, freeze specific accounts, or upgrade the underlying contract. These controls indicate that the product is subject to regulatory oversight.
On the other hand, the record says nothing about what the holder owns beyond how much of it they have. The rights that go with a holding come from the offering document, the trust deed or the terms of issue. That distinction is why two tokens can behave identically on the network and still entitle their holders to completely different things.
The Three Legal Foundations of a Token Claim
Regardless of the product structure, a holder's legal claim relies on one of three foundational relationships recognized in traditional banking:
Legal title: The holder owns the instrument and appears on its register. Rights are exercised against the company that issued it.
Beneficial interest: A trust or a fund holds the asset for the holder's benefit. The holder owns a share of a pool and acts through the manager.
Contractual right: A counterparty owes the holder something under agreed terms. Performance ranks with that counterparty's other obligations unless security has been granted.
The nature of the claim determines who acts as the obligor. In every legal structure, a specific, legally named company in a designated jurisdiction is responsible for delivering the asset, disbursing income, or honoring redemptions:
Native issuance: The token is the security itself, and the obligor is the company that issued it. The counterpart is a registered shareholding.
Vehicle unit: A fund, trust or special purpose company holds the asset, and the token is a unit in it. The counterpart is a fund unit.
Custodial claim: An issuer holds the asset, and the token is its promise to hand the asset over. The counterpart is a depositary receipt.
Reference exposure: The token pays out under a formula based on the asset's price, and the issuer owes that payout. The counterpart is a structured note.
While traditional securities rely on explicit instrument names to signal their legal form, tokenized assets appear identically as account balances on-chain. Examining these four structural models in the documentation clarifies which legal relationship actually governs the position. Below, we describe them in detail to examine how each operates in practice.
Figure 1. The legal path between the holder and the asset, in each of the four structures. Illustrative.
The Four Structures to Tokenize an Asset
Each structure corresponds to a familiar traditional asset: native issuance to a registered shareholding, a vehicle unit to a fund unit, a custodial claim to a depositary receipt, and a reference exposure to a structured note.
However, while traditional instruments explicitly state their legal form by name, all four tokenized versions appear identically on-chain as account balances.
Native Issuance: The Token Is the Instrument
In a native issuance, the security is created on the network in the first place. The issuer and its transfer agent do this together, so the on-chain register is the official record of ownership. Transferring the token transfers legal title.
As a result, the holder occupies the exact same legal position as any traditional registered owner. Coupons and dividends flow directly from the issuer according to its standard schedule, voting rights apply wherever attached to the underlying instrument, and corporate actions are processed through the issuer's existing channels. Furthermore, an institution's existing credit limit for that issuer seamlessly extends to cover the position, given that the underlying obligor remains unchanged.
Despite these advantages, native issuance remains rare because it requires two conditions that a token builder cannot independently fulfill:
Governing law must legally recognize an on-chain record as an official register.
The issuer along with its transfer agent must formally agree to maintain title in this manner.
For these reasons, tokenized versions of widely held securities typically rely on one of the three alternative structures detailed below.
Vehicle Unit: The Token Is a Share of a Pool
Where an asset cannot be issued natively, it goes inside a vehicle. Typically, a fund, trust, or special purpose vehicle acquires and holds the asset, where the token represents a unit of that entity. The holder retains a beneficial interest in the pool, ranking behind the vehicle's own liabilities. Most tokenized funds holding government debt operate under this structure.
Income stays inside the fund. The vehicle receives the coupons, and the holder sees them as a rising unit value or as additional units. The fund documentation specifies which approach is used, which has key tax and accounting implications.
This structure relies heavily on ring-fencing, which depends on specific legal drafting rather than automatically resulting from using a vehicle. Reviewers should check if the vehicle functions solely for this purpose, whether it can incur undisclosed debt, if an independent custodian holds the assets in the vehicle's name, and who manages the fund if the manager ceases operations.
When these conditions are met, the asset pool remains protected despite management changes; otherwise, the unit becomes an unsecured claim.
Custodial Claim: The Token Is a Promise From the Issuer
Dropping the vehicle leaves a direct promise between two parties. In this structure, an issuer buys the asset on a conventional market, places it with a regulated custodian or in a vault, and issues one token for each unit held. That token is a promise that the issuer will hand over the asset, or its cash value, when the holder redeems, so the claim is contractual rather than a form of ownership. Commodity tokens and many tokenized equities work this way, because the structure asks nothing of the company behind the asset.
The strength of this promise depends on two key clauses:
First, segregation determines whether the assets are held in trust for token holders or sit on the issuer's balance sheet.
Second, redemption rules specify who can redeem; direct redemption is often restricted to onboarded counterparties meeting minimum size thresholds.
Holders buying on secondary markets can trade at market prices, but might not have the right to redeem the underlying asset directly.
Everything in this structure depends on the assets being there in the quantity claimed. Where the backing sits on-chain, holders can check it continuously. Metal in a vault and shares at a depositary are checked by an auditor on the auditor's schedule, and the interval between checks is part of what the holder accepts.
Reference Exposure: The Token Is a Payout Formula
A reference exposure keeps the economics of the asset and leaves the asset itself behind. Here, the token is a note or certificate that pays out according to a formula based on the price of something. The issuer may buy the asset to hedge itself and owes the holder no obligation to do so. The holder owns a promise from the issuer, sized by a price feed, and owns nothing in the asset the product is named after.
Income appears only where the formula includes it. A note on an equity may count dividends, ignore them, or credit them after a fee. Corporate actions are handled by the same formula rather than by an entitlement.
Collateral is what makes this structure usable by a regulated buyer. A reviewer looks for security granted over identified assets, a published list of what secures the claim, a margin of over-collateralisation, and limited recourse wording that matches the economics. If the issuer holds the referenced asset and grants security over it, the structure functions similarly to a custodial claim.
Figure 2. The four structures compared on what is owned, what arrives while it is held, and what happens if the obligor fails. Illustrative structural comparison rather than a statement about any specific product.
The Asset Is the Easy Half of the Description
Identifying the underlying asset characterizes a tokenized position much like naming an index describes a structured note. While accurate, this label omits the essential factors that govern an investor's legal rights and operational options. The underlying asset determines the return profile, whereas the register, the claim structure, and the obligor dictate whether the holder actually receives that return and how the position may be used.
Institutional risk management requires establishing, for every tokenized position held, which of the four legal structures applies and which specific entity serves as the obligor. Establishing these facts is essential prior to addressing key operational considerations such as custody, liquidity, reporting, and exposure limits.
Sentora provides the deployment and risk infrastructure that enables institutions to hold tokenized assets under mandates that explicitly identify the obligor behind every position.
Sources
Securities Wrappers: Tokenizing Traditional Assets, Chainlink. Structural distinction between native issuance and wrapped representations.
A Taxonomy of Real-World Asset Tokenization for Blockchain-Based Financial Infrastructure, arXiv 2606.08534. Governance, legal wrapper and custody components used to frame the four structures.
Legal Guide to Real-World Assets Tokenization, Buzko Legal. Treatment of tracker certificates, warehouse receipts and the enforceability of a token holder's claim.
Tokenized Notes: Structures and When to Use Them, Asset Haus. Bankruptcy remoteness, asset segregation and limited recourse in vehicle structures.
