Tokenized real-world assets crossed $34 billion a couple of weeks ago — more than triple where they sat a year ago. And the institutions stopped experimenting. In just the last few weeks, the DTCC (the clearing backbone of US markets) moved to put tokenized securities on a public blockchain, Securitize got cleared to custody tokenized securities inside a broker-dealer, and daily trading volume in tokenized stocks hit a record $3.57 billion. Every week another fund, another building, another credit pool gets put "on-chain." If you're a founder watching this, you've probably had the same thought I kept hearing in my DMs: okay — but how do you actually do it? For my asset?

I'm not a lawyer, and this isn't legal advice. But I've run the full lifecycle more than once. I built Propex to tokenize Bali real estate, Tokeniz to give other founders the infrastructure, and before that Minty for art. So let me walk you through what tokenizing an asset really involves — start to finish — in plain language. By the end you'll understand why the blockchain part is the easy part, and where the real work hides.

Tokenization is the process of issuing a digital token that represents a claim on something real — a share of a company, a slice of a building, a unit of a fund, a stream of revenue. The token lives on a blockchain. The asset lives in the real world. The whole game is connecting those two things in a way that actually holds up.

A token by itself is just a record on a ledger. What gives it value is the legal and operational scaffolding behind it. Miss that, and you've minted a number that points to nothing. So here's the lifecycle, step by step.

You don't tokenize a building. You tokenize a claim on an entity that owns the building.

This is the step almost everyone skips, and it's the one that matters most. You put the asset inside a legal vehicle — an LLC, a fund, an SPV (special purpose vehicle, a company created to hold one specific asset) — and then the token represents a share of that vehicle. The chain of ownership has to be airtight: token holder → entity → asset. If that chain breaks anywhere, the token is decoration.

This is also where you decide what kind of claim you're selling, which determines everything downstream.

A token can represent very different things, and the differences are legal, not cosmetic:

Equity or membership — you own a piece of the entity. Debt — you're owed money back, with interest. Revenue share — you get a cut of what the asset produces. A redeemable claim — the token can be exchanged for the underlying, like a tokenized fund unit redeemable for cash.

Each of these gets treated differently by regulators. Most tokens that represent a financial return are securities in most jurisdictions — which means rules about who can buy them and how you can sell them. Get clear on this before you write a line of code.

Now the technical part — and it's genuinely the simplest. You choose a blockchain (Ethereum, a layer-2 like Base, Solana) and a token standard, which is just a shared template for how the token behaves. ERC-20 is the standard for fungible tokens, where every unit is identical and interchangeable — the right choice for fund units or fractional shares. ERC-721 is for non-fungible tokens, where each one is unique — useful when each token is a distinct asset like a company an IP or a land title 

This step takes a competent developer days, not months. That's the point: the blockchain is the easy part.

This is where serious tokenization separates from the toy version. If your token is a security, you can't just let anyone, anywhere, hold or trade it. You build rules directly into the token: a whitelist of approved wallets, KYC checks (Know Your Customer — verifying who someone is) before anyone can buy, and transfer restrictions so tokens can't move to wallets that haven't been cleared.

This is what people mean by a "permissioned" token. It still lives on a public chain, but it only behaves for people who've passed the gate. This layer is what makes a regulator comfortable and a buyer safe.

Two custody questions, and both must have boring, verifiable answers. Who holds the real asset — the building, the deed, the fund's cash? And who holds the keys to the tokens before they're distributed?

This is the trust question, The answer can't be "us, trust me." It's an independent custodian, a regulated trustee, a qualified third party. At Propex the keys are generated automatically by encrypting your SSO and the property must be managed by a separate third-party manager — that separation is a feature, not an inconvenience.

Now you actually put tokens in people's hands. This is the primary sale or allocation: investors pass KYC, send funds, and receive their tokens. How you run this — private placement, a regulated offering, an allocation to existing partners — depends entirely on the legal decision you made back in Step 2.

A token people can buy but never sell isn't worth much. Secondary liquidity is the ability to trade after the initial sale — on a licensed marketplace, a regulated alternative trading system, or a permissioned pool. This is also the hardest part to get right, because the same compliance rules from Step 4 have to follow the token everywhere it goes. Liquidity is a promise you have to keep, not a feature you switch on.

The token isn't the end — it's the beginning of a relationship. If holders are owed dividends, rent, interest, or royalties, those payments can be distributed on-chain, automatically, to every wallet that holds the token. Governance votes can run the same way. This is the part that actually feels like the future: ownership that pays you and answers to you, in code, without a quarterly statement getting lost in the mail.

If you map the eight steps, exactly one of them is "blockchain." The other seven are legal structure, compliance, custody, distribution, and servicing. Tokenization isn't [only] a coding project with some paperwork attached. It's a financial and legal project with a thin, elegant layer of code on top (especially for RWA). It is new rails that digitize and programmatically manage assets.

The founders who win at this don't fall in love with the token. They take the wrapper, the custody, and the compliance as seriously as the tech, because that's where trust actually lives. Get those right and the token does what it promises: it turns ownership into something programmable, divisible, and global.

Ownership is becoming software. The people who understand the full lifecycle — not just the mint button — are the ones who'll build the rails everyone else ends up using.

Want to tokenize your own asset? Tokeniz.ai is the solution I built for exactly this. And if you want to see a live tokenized-asset marketplace running end to end, look at propex.app.

The Nifty Founder is a 2x/week newsletter about building, structuring, and owning in the new economy. Subscribe free at niftyfounder.com.