On-Chain Investment Product

An on-chain investment product is an investment, such as a fund, bond or note, whose ownership units are issued, recorded and transferred as tokens on a blockchain rather than only in a traditional registrar's books. Examples include tokenized funds and the tokenized money market funds launched by large asset managers from 2023 onward, as well as tokens that pass through income from loans or other real-world assets. Holders can often transfer units around the clock, use them as collateral in DeFi applications or settle them with stablecoins. The underlying legal structure, however, is usually a conventional fund or company, so investors still depend on the manager, the custodian and the law of the issuing country. Many such products are restricted to verified or professional investors under securities law. The term is descriptive rather than a legal category. Also see on-chain structured product.