The tokenization of RWA (Real-World Assets) relies on blockchain technology, smart contracts, and digital platforms. Therefore, there are potential risks in terms of technology and security that investors must be aware of:
1. Smart Contract Vulnerabilities
The issuance, trading, and distribution of RWA are usually executed automatically through smart contracts.
If the smart contract code contains bugs or logic errors, it may result in token theft, asset loss, or transaction failures.
Historically, there have been multiple cases where millions of dollars were lost due to smart contract vulnerabilities, reminding investors to prioritize contract security.
2. Blockchain Platform Risks
RWA tokens usually run on a specific public or private blockchain.
The underlying blockchain may face issues such as network congestion, 51% attacks, node failures, or unsuccessful upgrades, potentially affecting token transactions, asset security, or income distribution.
3. Custody and Asset Management Risks
Physical assets (such as real estate, precious metals, and artworks) must still be managed by custodians or professional institutions.
Improper custody may lead to asset damage, theft, or unclear accounting, directly impacting the on-chain token value and investor rights.
4. Trading Platform Security Risks
RWA token trading depends on exchanges or DeFi platforms.
If a platform suffers from hacking, system failures, or poor management, assets may be frozen, lost, or unable to be traded in time.
5. Data Privacy and Identity Security
Investors usually need to go through KYC (Know Your Customer) and AML (Anti-Money Laundering) checks when participating in RWA.
If the platform’s data storage or transmission is insecure, it could lead to personal information leaks, resulting in financial and privacy risks.
6. Technology Upgrade and Compatibility Risks
Blockchain technology is continuously evolving, and protocol upgrades may cause compatibility issues or functional abnormalities in tokens.
Investors need to pay attention to the platform’s technical maintenance and upgrade strategies to ensure the proper use and trading of assets.
Summary
Technology and security issues are critical risks in RWA investments, including smart contract vulnerabilities, blockchain failures, custody risks, platform security risks, and data privacy concerns.
Investors should choose reliable, audited smart contracts, regulated custodians, and secure trading platforms, while maintaining proper risk management practices.