Before you put money into any tokenized asset, run it through a checklist. Good due diligence is not complicated - it is a fixed set of questions that, answered clearly, tell you whether a deal is sound, and, answered vaguely, tell you to walk away. The list below covers the six areas that matter: the asset, the legal structure, custody and backing, liquidity, fees, and the people. Work through it every time. The discipline of asking the same questions is what separates investing from gambling on a yield number.

1. The asset

Start with the thing you are actually buying. What is it, where is it, and what is it worth? For property, that means location, condition, tenancy, and price relative to income. For credit, the borrowers and collateral. For a Treasury or commodity, what exactly is held. If you would not buy the underlying asset off-chain at this price, tokenizing it does not make it a better deal.

2. The legal structure

Confirm your claim is real. Is the asset held in a proper entity such as an SPV, and does the token legally entitle you to its economics? Is it a registered or exempt security token, and under which exemption? A deal that cannot explain, in plain terms, what you legally own is the single biggest red flag on this list.

3. Custody and backing

Who holds the asset, and can you verify it? Look for a named, regulated qualified custodian and ongoing proof of reserves or audits - not a promise that the backing exists. For anything claiming 1:1 backing, the burden is on the issuer to show it, continuously.

4. Liquidity and exit

Know how you get out before you get in. Is there a secondary market, and is it actually active? Is there a lock-up or minimum hold? What is the expected horizon, and are there redemption windows? Treat "easy liquidity" claims as something to verify with real trades, not accept.

5. Fees and economics

Find every fee: entry, management, performance, and - easy to miss - exit fees. Then check the distribution structure: where do common token holders sit, and what is your net yield after all costs? A high headline yield with heavy fees and a disadvantaged position can be worse than a lower, cleaner one.

6. The people and the platform

Who is behind it? Is the team identifiable with a track record, and is the platform regulated, with the licensed parties named? Anonymity, pressure tactics, and guaranteed returns are warnings. A legitimate operator is transparent about who they are and how they are overseen.

How to use the checklist

Run all six every time, and treat any area the issuer cannot answer clearly as a failing grade, not a minor gap. The more of this a deal documents openly, the more confidence - and capital - it has earned. For a sense of whether the category as a whole is trustworthy, see is RWA crypto legit; the next guide drills into the most technical item, verifying the backing.

Where to go next

• Next: how to verify an RWA's backing.
• Zoom out: is RWA crypto legit.
• Glossary: proof of reserves.

Sources: rwa.xyz; U.S. SEC (sec.gov), as of 2026.