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Valuation

Valuation is the process of estimating what an asset, company or investment is worth. Different assets require different valuation methods. Publicly traded securities may have continuously available market prices, while real estate, private credit and private companies may require appraisals, financial models or comparisons with similar assets.

Why it matters to you

Tokenization does not solve the problem of determining what an asset is worth. If the underlying asset is difficult to value, putting it on a blockchain does not suddenly make its valuation precise. Investors should understand who values the asset, how the valuation is calculated and how frequently it is updated.

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