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Tokenized vs synthetic assets

By LayerZeroOct 27, 20265 min read

A tokenized asset and a synthetic asset can both follow the price of a stock, a bond, or a commodity, but they give the holder different things. A tokenized asset is a token that represents the asset itself, or a claim on an asset held by an issuer or a custodian. A synthetic asset is a contract that pays out according to the asset's price, without anyone holding the underlying asset for the buyer.

Last updated: October 27, 2026.

What is a tokenized asset?

A tokenized asset is issued against something that exists offchain. An issuer holds the underlying asset, or a custodian holds it on the issuer's behalf, and the token records who has a claim on it. The product's terms set what that claim includes, such as redemption, income, or voting rights. The guide to tokenized assets covers how these tokens are issued.

Because the token stands for a specific holding, its supply is meant to match what the issuer holds. What the holder can actually claim depends on the issuer's legal structure, not only on the token contract.

What is a synthetic asset?

A synthetic asset gives price exposure without ownership. A smart contract or a trading venue follows the price of a reference asset, usually through an oracle, which is a service that brings an outside price onchain. Gains and losses are settled between participants in another asset, often a stablecoin. Nobody buys the underlying stock or commodity for the holder.

Common forms include collateralized tokens that track a price, and perpetual futures. A perpetual future is a derivative contract with no expiry date. Periodic funding payments between holders of long and short positions keep its price close to the reference price. This is how a venue can list markets on stocks, commodities, or currencies that it does not hold. The guide to tokenized commodities shows the same split between backed tokens and price exposure.

How do they compare?

QuestionTokenized assetSynthetic asset
What the holder hasThe asset itself, or a claim on it, as the token's terms set outA contract that pays according to a price
Who holds the underlying assetThe issuer or a custodianNobody has to hold it
Where the price comes fromTrading in the token, anchored by redemption if offeredTrading in the contract, kept near an oracle or index price
What the holder relies onThe issuer, the custodian, and the legal structureThe collateral, the oracle, and the venue
Income or voting rightsPossible, if the product's terms grant themUsually none, only price exposure
Who can create itThe asset's issuer, or a third party that holds the asset in custodyA protocol or venue, without the asset's issuer

Why does the difference matter?

The two models answer different needs. A tokenized asset is used where holding the instrument matters, such as settlement, collateral that has to be the real asset, or distributing fund shares to new holders. A synthetic asset is used where only the price matters, such as hedging or leveraged trading, and it can be listed without the cooperation of the asset's issuer.

The difference also shows when the asset reaches more blockchains. A tokenized asset keeps the issuer's controls and redemption terms on each chain when that chain carries the issuer's own token rather than a copy issued by a third party. The guide to wrapped tokens explains why a copy issued by a third party is a different claim. A synthetic position is defined by the protocol or venue that created it, so its terms depend on that system wherever it is used.

FAQ

Does a synthetic stock make me a shareholder?

No. A synthetic stock tracks the price of a share, but the holder does not own the share. Shareholder rights such as voting stay with whoever holds the actual shares.


Is every tokenized stock backed by real shares?

No. Some tokenized stocks are backed by shares, or by a claim on shares, held by the issuer or a custodian. Others only pay out according to the share price, with no shares held for the holder. The issuer's terms state what backs the token and what the holder can redeem.


Are perpetual futures synthetic assets?

They are a form of synthetic exposure. A perpetual future tracks a reference price and never expires, and it does not deliver the underlying asset.

Plan how the asset is issued

For how an issuer can keep one tokenized asset consistent across chains, request a custom briefing.

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