What Is the Difference between a Synthetic Asset and a Tokenized Real-World Asset (RWA)?

A synthetic asset is a derivative whose value is pegged to an underlying asset, allowing users to gain exposure without holding the asset itself. It is a contractual representation created on-chain.

A tokenized Real-World Asset (RWA), on the other hand, is a security token that represents direct ownership of a physical or financial asset, such as real estate, fine art, or a corporate bond. The RWA token is a fraction of the actual asset, while the synthetic asset is a derivative that mirrors its price movement.