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Asset-backed token

The asset-backed token model is designed for economically equivalent assets where each asset mints a fixed number of tokens. This approach works best when items are close substitutes within a narrow reference class—think investment-grade FP Journe watches, standardized collectibles, or tokenized treasuries with identical terms.

The design goal is straightforward: transparent supply scaling that scales linearly with item count, with minimal valuation subjectivity per asset. Each token represents a fixed fractional claim on the collection, making supply math simple and comparability across collections straightforward.

When to use​

Choose asset-backed tokens when:

  • Equivalent or near-equivalent items: narrow references, standardized grades, or fungible assets
  • Objective pricing via auctions: markets where mark-to-truth auctions can establish fair value when prices deviate
  • Transparency priority: communities that value simple supply math and clear comparability

This model is less suited for diverse or unique items where valuation varies significantly across assets.

Issuance mechanics​

Let each asset mint Tper-assetT_{\mathrm{per\text{-}asset}} tokens. If NassetsN_{\mathrm{assets}} assets are in the collection:

Stotal=Nassets⋅Tper-assetS_{\mathrm{total}} = N_{\mathrm{assets}} \cdot T_{\mathrm{per\text{-}asset}}

Supply scales discretely with acquisitions: add one asset, mint Tper-assetT_{\mathrm{per\text{-}asset}} tokens. This creates predictable, auditable supply growth that's easy to verify on-chain.

Pricing and backstops​

Spot pricing flows from the CL AMM (concentrated liquidity automated market maker), which provides continuous price discovery based on executable liquidity. When market price deviates from fundamentals, mark-to-truth auctions converge price back to objective value.

The combination of AMM-driven spot pricing and auction-driven NAV convergence ensures prices reflect real asset value while maintaining 24/7 tradability and composability with DeFi protocols.

Illustrative example​

Consider a collection of 10 investment-grade FP Journe watches:

  • Each asset mints 1,000 tokens: Tper-asset=1,000T_{\mathrm{per\text{-}asset}} = 1{,}000
  • Total supply: S=10×1,000=10,000S = 10 \times 1{,}000 = 10{,}000 tokens
  • NAV per asset: $5,000 USDC
  • Objective NAV per token: 10×5,00010,000=5\frac{10 \times 5{,}000}{10{,}000} = 5 USDC

The math is transparent and verifiable: anyone can count assets, multiply by tokens per asset, and compute NAV per token. This simplicity makes asset-backed tokens ideal for communities that prioritize clarity and comparability.

Trust assumptions​

Asset-backed tokens require:

  • Authentication/audit correctness: assets must be genuine and properly verified
  • Accurate NAV inputs: mark-to-truth auctions depend on reliable valuation data

The model minimizes trust requirements compared to variable issuance—no ongoing NAV calculations per acquisition, no complex valuation processes. Trust is concentrated in authentication and periodic NAV updates, not in continuous valuation decisions.