Define what portion of the asset is tokenized and how much you raise, back it with a credible third-party valuation, document legal ownership, disclose insurance, and, where relevant, connect proof of reserves — building the disclosure record investors and regulators rely on.
This phase marks the transition from conceptual planning to legal and financial execution. It is where your tokenization model is aligned with compliance requirements, investor expectations, and valuation best practice — every legal, financial, and technical parameter verified, documented, and prepared for investor disclosure.
Here you assemble the asset’s due-diligence record: the tokenization amount and fundraising parameters, a credible asset valuation, proof of ownership, and — where relevant — evidence of insurance and proof of reserves. Together these establish investor trust, meet investor-protection standards, and keep the offering transparent. Clear, verifiable documentation prevents disputes, supports accurate token pricing, and underpins risk assessment. The stronger this record, the smoother the tokenization that follows in Stobox Compass.
Tokenization Amount and Fundraising Parameters
Establish the financial scope and currency framework of your Security Token Offering (STO). Here you define the portion of the asset being tokenized, how much capital you intend to raise, and the currency in which the offering is priced and managed. These inputs feed directly into your token economics, set investor expectations, and inform the smart-contract logic issued through Stobox Compass.
Indicate the Tokenized Asset Value
The value of the asset(s) to be represented on-chain. This establishes the portion of total asset value being tokenized and serves as the foundation for determining token supply and valuation.
Note: If the total asset value is $10 million but only $6 million will be tokenized, the Tokenized Asset Value is $6 million.
Define Your Fundraising Target (STO Goal)
The total capital the issuer intends to raise from investors during the offering. This may differ from the tokenized asset value if only part of the asset is sold, or if the structure includes leverage, co-investment, or staged issuance.
Note: If the Tokenized Asset Value is $6 million and the issuer aims to raise $3 million from investors, the Fundraising Target is $3 million.
Select the Currency of Denomination
The currency in which tokens are priced and capital is raised. It determines how token pricing, investor subscriptions, and reporting are calculated. This can be a fiat currency (e.g. USD, EUR) or a stablecoin (e.g. USDC, EURC). USD and EUR are the standard denominations.
Define and Document Asset Valuation
Document and validate the valuation of your tokenized asset. A clear, credible valuation builds investor trust, supports pricing logic, and is often a regulatory requirement. This step ensures the asset’s fair market value is properly assessed and recorded — through a third-party provider, or an internal evaluation where permitted.
Set an Asset Valuation Amount
The current estimated value of the asset being tokenized, typically its fair market value as determined by a valuation report or expert opinion. This figure is critical for calculating token supply and defining the price per token.
Note: For example, “The property is valued at $9.8M based on a certified appraisal.”
Did You Evaluate the Asset Yourself?
Record whether the valuation was performed internally by the issuer or by an external party. Independent, third-party valuation carries materially more weight with regulated and institutional investors; self-valuation should be reserved for cases where it is permitted and clearly disclosed.
Select a Valuation Method
Specify the methodology used to determine the asset’s value — it directly affects the credibility and accuracy of the figure. The chosen method should align with industry standards and the nature of the asset.
- Discounted Cash Flow (DCF) — Forecasts future income (e.g. rental income, royalties, business revenue) and discounts it to present value based on risk and time.
- Net Asset Value (NAV) — Total assets minus liabilities. Commonly used in fund structures or balance-sheet-based valuations.
- Market-Based Valuation (Comparables) — Compares the asset to similar assets recently sold or listed to estimate current value.
- Replacement / Reproduction Cost — Estimates the cost to rebuild or replace the asset, often adjusted for depreciation or obsolescence.
- Custom Valuation — Combines multiple methods (e.g. market comps + DCF) to build a balanced, justifiable valuation for complex or illiquid assets.
Important: The choice of method depends on the asset type (real estate, business equity, funds, and so on) and jurisdictional standards. Confirm the approach with qualified valuation and securities counsel.
Indicate the Valuation Provider Name
Identify the licensed valuation firm, appraiser, or expert who conducted the valuation.
Important: For regulated offerings this should be a recognized third party with credentials. The provider’s credibility directly affects investor trust and regulatory acceptance.
Select the Valuation Provider’s Country
Record the country where your valuation provider is based or licensed — select the provider’s country (200+ jurisdictions supported).
Indicate the Valuation Date
The effective date of the valuation — when the asset’s value was assessed. It matters for regulatory documentation, investor disclosures, and ensuring the figure remains relevant.
Important: The valuation should be recent, typically within 6–12 months.
Upload a Valuation Report
A formal document from the valuation provider that sets out:
- Valuation figures
- Methods used
- Supporting analysis and data
- Legal disclaimers or limitations
Important: This report should be available to investors and regulators as evidence of the asset’s value.
Provide External Valuation Verification
Indicate whether the valuation has been independently reviewed or certified by a further third party. Where such verification exists, provide a link to the report or certificate. This adds transparency, builds investor trust, and may be required in regulated or institutional offerings.
Set an Ongoing Valuation Frequency
Define how often the asset’s value will be reassessed after the initial tokenization. Regular revaluation keeps secondary-market pricing current, supports accurate Net Asset Value (NAV) reporting, and helps meet investor-reporting obligations. Standard reassessment periods are:
- Monthly
- Quarterly
- Semi-annually
- Annually
Upload Asset Ownership Documentation
This step establishes that you have the legal right to tokenize the underlying asset. Ownership must be clearly documented and verifiable to legitimize the offering and avoid future disputes or regulatory issues. It may take the form of direct possession (title or deed), contractual rights (a shareholder agreement), or legally recognized control over the asset — critical for both compliance and investor confidence, especially in regulated markets. Where the asset is held through a special-purpose vehicle, see the SPV tokenization guide.
Do You Have a Legal Verification of Ownership?
Confirm whether the issuer has completed a legal review of ownership. Verification typically involves a qualified legal professional reviewing supporting documents to establish that the asset is legitimately and exclusively owned or controlled by the issuer. Where such verification exists, it must be formally recorded.
Indicate the Ownership Verification Legal Provider Name
Name the legal advisor, law firm, or notary that performed the verification. This party should be qualified to assess legal documentation and issue a written opinion or verification. An independent provider strengthens the credibility and legal standing of the offering, particularly with regulated investors or jurisdictions.
Select the Ownership Verification Provider Country
Record where your ownership-verification provider is based or licensed — select the provider’s country (200+ jurisdictions supported).
Select the Ownership Verification Date
The date on which legal ownership was reviewed and confirmed. It validates the currency and relevance of the documentation. If ownership conditions change, a fresh verification should be conducted.
Note: Ownership can change through a transaction or restructuring, which would call for renewed verification.
Upload the Ownership Documentation
Attach all relevant legal documents proving ownership or control of the asset. Multiple files may be uploaded. These form the legal foundation for issuing tokenized claims to the asset.
Note: Title deeds, registration certificates, shareholder agreements, purchase contracts, or court judgments can all serve to prove ownership or control.
Provide an External Link to Proof of Ownership
Where available, provide a direct link to publicly accessible or blockchain-based ownership records. Optional, but it adds transparency, streamlines due diligence, and improves investor trust.
Note: An external link might point to a registry entry, a tokenized property record, or a notarized digital document.
Insuring an Asset
This step records whether the asset to be tokenized is protected by insurance. Insurance reduces risk exposure for both issuer and investors, providing financial protection against damage, loss, theft, liability, or other events that could impair the asset’s value or operability. Documenting and disclosing coverage demonstrates responsible asset management and reinforces trust and transparency in the offering.
Is the Asset Insured?
Indicate whether the asset currently carries any form of insurance coverage. Confirming insurance shows the issuer has taken steps to mitigate risk — which may be required in certain regulated offerings or institutional investment scenarios.
Note: If the asset is not insured, the remaining fields on insurance do not apply and can be skipped.
Enter the Insurance Provider Name
Name the company or institution that issued the policy. This should be a recognized, licensed provider authorized to operate in the relevant jurisdiction; the insurer’s reputation and reliability can influence investor perception and due-diligence outcomes.
Select the Insurance Provider Country
Record where the insurance provider is based or licensed — select the provider’s country (200+ jurisdictions supported). This helps determine whether the policy is governed by local regulation and whether international coverage may apply, given the asset’s location and the jurisdiction of issuance.
Indicate the Insurance Date
Specify the effective date of the policy, confirming coverage is current or was active at the time of tokenization. Track any expiration date or renewal terms internally.
Upload an Insurance Report
Attach the official policy, certificate, or summary document setting out the terms, coverage details, insured amount, and relevant conditions. This is used to verify the existence and scope of coverage.
Provide External Insurance Verification
Where available, provide a link to a publicly accessible verification of the policy — a registration number in a national insurance database, a blockchain-based proof of insurance, or a certificate hosted by the provider. Optional, but it adds transparency and supports investor due diligence.
Completing this step demonstrates that appropriate risk mitigation is in place. Insurance coverage enhances legal and operational credibility and safeguards investor interests in the event of adverse events affecting the asset’s value or availability.
Connecting the Proof of Reserves
This step covers integrating Proof of Reserves (PoR) into the tokenization process. PoR is an optional but valuable mechanism that links a tokenized asset to real-world data, providing verifiable evidence that the asset exists and holds its stated value. It is especially relevant for asset-backed tokens where trust, compliance, and real-time validation matter to investors and regulators.
Proof of reserves enhances transparency and builds investor trust by linking the tokenized asset to reliable data sources — property registries, financial statements, or blockchain oracles. Each case is unique and may require additional investigation to determine the right approach. It is particularly relevant where regulatory or investor expectations demand clear validation of the asset’s backing, or where price-relevant information changes with high frequency. When implemented, this data can be recorded as metadata in the token’s smart contract, creating a transparent and immutable reference.
Why This Step Matters
- Transparency: Demonstrates the token’s backing by a verifiable asset.
- Investor trust: Provides reassurance that the token represents a real, valuable asset.
- Regulatory alignment: Helps meet expectations for asset-backed tokens.
Tip: Proof of reserves often depends on integrating the right external data sources or APIs. Stobox’s team can help connect verified data feeds to validate the existence and value of the underlying asset, so the tokenized asset stands up to transparency and regulatory scrutiny while reinforcing investor trust.
Is Proof of Reserves Connected?
Record whether a PoR mechanism has been implemented for the underlying asset. Confirming “yes” indicates a verifiable system is in place to prove the backing asset exists, is properly held, and is accurately valued. If not connected, the issuer may consider implementing PoR for future compliance and investor-trust benefits.
Note: Verifiable systems include blockchain oracles, audit feeds, registry connections, or digital certificates.
What you carry into the next phase
You leave Phase 2 with a complete, verifiable asset record — scope, valuation, ownership, insurance, and (where relevant) proof of reserves. That evidence base feeds directly into Phase 3, where you translate the structured asset into a concrete tokenization model: the rights the token conveys, its supply, and how it is issued and managed in Stobox Compass.