Custody

Foundations · Lesson 1.4

Custody is about who holds the underlying asset and on what terms. For a tokenized Treasury fund, a custodian bank holds the bills. For gold, a vault operator holds the bars. For a loan, someone holds the documents and collects the payments. The custody agreement says whether those assets are kept separate from the platform's own, who can move them and what happens to them if the issuer or the platform fails.

Wally’s note: *gavel noises*

A token is only as reliable as the custody behind it. Check who holds the asset and what happens to it if the platform fails.

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