> For the complete documentation index, see [llms.txt](https://jolders.gitbook.io/docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://jolders.gitbook.io/docs/background/digital-assets.md).

# Digital Assets

#### 🪙 What Are Cryptoassets?

**Cryptoassets** are digital assets secured through cryptography and distributed via decentralized networks. They rely on **blockchain technology** — a public, immutable ledger that allows for trustless verification of transactions, without centralized control.

* **Cryptocurrencies** like Bitcoin or Ethereum are native assets designed for exchange and value storage.
* **Tokens**, built on top of existing blockchains (such as ERC-20 tokens on Ethereum), can represent anything — access rights, shares, real-world assets, or utility within digital ecosystems.

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#### 🧾 What Are NFTs (Non-Fungible Tokens)?

**NFTs** are a special class of tokens that represent **unique, non-interchangeable assets**. Unlike fungible tokens (1 USDC = 1 USDC), **each NFT is distinct**, with metadata and ownership registered on-chain.

Initially made popular through art and collectibles, NFTs are now being explored in areas such as:

* Digital identity
* Gaming economies
* Membership and access control
* Real-world asset representation
* **Structured financial participation** (like on Jolders)

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#### ⚙️ Smart Contracts: The Trustless Engine

At the core of both tokens and NFTs are **smart contracts** — programs deployed on a blockchain that automatically execute predefined rules. These allow for:

* Rule-based token issuance
* Automated royalty distributions
* Transparent ownership tracking
* Conditional access and governance systems

Once deployed, smart contracts are immutable, secure, and function independently of any centralized party.

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### 🧱 Tokenization on Jolders

At Jolders, we use NFTs and blockchain tokens not as collectibles — but as **programmable ownership certificates** that represent fractional participation in curated opportunities (startups, funds, etc.).

Each NFT is:

* Tied to a specific opportunity
* Issued with controlled supply
* Embedded with metadata for access, governance, or royalties
* Optionally tradable on secondary markets

This enables:

* **Flexible, borderless participation**
* **Transparent rules and ownership**
* **Optional liquidity through decentralized trading**

The benefits of NFTs in this context extend beyond representation — they provide **efficiency, composability, and auditability** not available through traditional finance.

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### 📊 Market Momentum

The rise of NFTs over recent years has demonstrated the potential for tokenized ownership models:

* According to **DappRadar**, NFT transaction volume exceeded **$2B in Q1 2021**, a **2,627% increase YoY**.
* In March 2021, digital artist **Beeple’s NFT** sold for **$69 million** via Christie’s — marking the highest sale of a digital asset in history.
* Play-to-earn ecosystems like **Axie Infinity** helped demonstrate how NFTs can hold functional value. Its token price rose from under $0.01 in early 2021 to over $70 by September that year.

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#### 🧠 Key Distinctions

| Category           | Fungible | Unique | Transferable | Primary Use Case                     |
| ------------------ | -------- | ------ | ------------ | ------------------------------------ |
| **Cryptocurrency** | ✔️       | ❌      | ✔️           | Value transfer, payment, base layer  |
| **Token (ERC-20)** | ✔️       | ❌      | ✔️           | Utility, governance, access, staking |
| **NFT (ERC-721)**  | ❌        | ✔️     | ✔️           | Ownership of unique digital rights   |

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#### 🧩 Why Use NFTs for Co-Participation?

* **Limited supply, programmable structure**: NFTs can be issued in controlled batches, with specific rights and rules.
* **Transparency**: Every action (minting, transfer, burning) is verifiable on-chain.
* **Access + rewards**: NFTs can be designed to include access rights, governance votes, or royalty flows based on project success.
* **Tradability**: With optional secondary markets, NFTs offer participants more flexibility than traditional lock-up mechanisms.

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