How Are Tokenized Assets Used as the Underlying in a Structured Financial Product?

Tokenized assets, such as tokenized real estate or corporate debt, can be bundled together to create a new, diversified product, similar to a Collateralized Debt Obligation (CDO). Different tranches of this product can be offered, each with varying risk and return profiles.

They can also be used to create synthetic assets or derivatives that track the performance of the underlying tokenized portfolio, offering new ways to manage risk and yield.