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Valuation Risk

Valuation risk is the risk that an asset's reported or estimated value does not accurately reflect the price that could realistically be obtained for it. This is particularly relevant to assets that trade infrequently or depend on models and appraisals.

Why it matters to you

Putting an asset onchain does not make an uncertain valuation certain. A tokenized property or private loan might display a precise digital price while the underlying asset remains difficult to value. A precise number is not necessarily a precise valuation.

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