> For the complete documentation index, see [llms.txt](https://docs.tydro.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.tydro.com/v.-risk/risk-types-and-overview/rwa-nav-risk.md). # RWA NAV Risk ### The on-chain token depends on an off-chain claim A real-world asset is a token that represents an off-chain asset or security held through an entity or SPV. The token is only worth what that off-chain claim is worth, and only if the claim is enforceable. If the holding structure fails, if the assets are not there, or if the legal claim cannot be enforced, the token can lose value regardless of how the protocol behaves. See Permissioned and RWA markets. {% hint style="warning" %} A real-world asset token can fall to zero if the off-chain structure behind it fails or its claim cannot be enforced, even if the protocol functions exactly as intended. {% endhint %} ### Issuer and counterparty default These assets depend on the issuer and the parties that hold and administer the underlying. Default, insolvency, or misconduct by any of them can impair the asset. This is credit and counterparty risk of a kind that does not exist for native crypto collateral. ### Redemption may not be available The ability to redeem a real-world asset token for the underlying can be limited, delayed, or suspended. A token that cannot be redeemed when expected can trade away from the value of the asset it represents. ### Legal and regulatory risk Real-world assets are subject to law and regulation in the jurisdictions that govern them. Assets can be frozen, seized, or made non-transferable by legal or regulatory action. The regulatory status of a tokenized asset can change after it is listed. ### Permissioning can change Access to a permissioned market depends on meeting and maintaining its requirements. Access can be revoked, and eligibility can change, which can affect the ability to manage or exit a position in that market. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://docs.tydro.com/v.-risk/risk-types-and-overview/rwa-nav-risk.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.