The emerging market of tokenized commodities is transforming the investment landscape, and offering a whole new array of possibilities.

As digital representations of Real World Assets (RWA) and other tangible goods, tokenized commodities are created through a process called tokenization, which converts ownership rights of RWA into blockchain-based tokens.

How Tokenization Works
The process follows some key steps, the first of which is the issuance of tokens. The RWA being tokenized is securely stored and managed by custodial services and/or smart contracts, and tokens representing the RWAs can then be bought, sold and transferred on decentralized platforms using smart contracts.

Types of Tokenized Commodities and RWAs
Precious metals such as gold, through to energy resources like oil, natural gas and renewable energy certificates are all being tokenized.

Agricultural resources and real estate are also increasingly big movers in the space.

The Benefits of Tokenized Commodities
Advantages offered by tokenization include fractional ownership, which enables greater accessibility to previously high-barrier entry markets, and improved liquidity via transferability of tokens, which enhances market efficiency.

Greater transparency offered by blockchain technology, reduced costs from the elimination of intermediaries and 24/7 global accessibility via trading platforms all strengthen the appeal.

The descriptions provided above are all based on publicly available information, and cannot be considered as financial advice or encouragement to invest. Sources of information used in this post include Investopedia and Forbes. All transactions involving digital assets involve certain risks, which you should familiarize yourself with prior to any investment.