,” in which their ownership rights are converted into blockchain-based cryptographic tokens. Partially owned and accessible, each token usually represents a portion or entirety of the underlying commodity.
They accomplish this by pegging their value to a tangible good such as gold, oil or real estate. The physical commodity is held by a business or organization, which also releases tokens denoting a specific amount of that commodity. Fractionalizing commodities into digital tokens improves liquidity by allowing investors to buy smaller units, which expands the market for available investment options. Additionally, because of this fractional ownership, trading and transferability are made simpler, which lowers entry barriers and boosts market efficiency.