This paper presents, to the best of our knowledge, the first formal mechanism design treatment of Quran 2:282 as a low-cost verification mechanism. It proves that the Quranic debt documentation mechanism drives the creditor's expected verification cost to zero in the costly state verification framework. It achieves this by creating ex ante evidence through writing and witnessing, and by introducing a dual deterrence system: a fixed internal moral cost and a detection-contingent legal penalty. The paper also offers two interpretative contributions. First, it shows that the Quranic witness rule is an early redundancy mechanism for error correction, anticipating the logic later formalized by Hamming (1950). Second, it proposes an economic reading of the terms safih, da'if, and the inability to dictate, arguing that the guardian who dictates with justice may be a qualified third-party verifier, not merely a relative.
Decentralized finance (DeFi) applications have attracted a recent surge in popularity. Token contracts underpin DeFi applications by managing liquidity. To regulate the interactions between token contracts and DeFi applications, token standards have been proposed to ensure predictable execution semantics and out-comes, thereby enabling reliable interoperability. However, there is no mechanism to prevent developers from customizing token contracts in ways that violate these standards. Even without malicious intent, such customizations pose severe risks to DeFi applications. Therefore, a comprehensive understanding of financially risky behaviors in token contracts is essential to better safeguard DeFi applications. To this end, we conduct the first systematic study that uncovers these behaviors and their concrete threats to DeFi applications. Specifically, we begin by constructing a taxonomy of nine financially risky behaviors in ERC20 token contracts. We then recognize the financial risks these behaviors pose to DeFi applications, which can result in significant financial losses, through a rigorous open-coding process on the real-world incidents of DeFi applications. To enable a large-scale study, we develop FRBScan, a novel tool that automatically identifies financially risky behaviors in ERC20 token contracts by combining Datalog analysis with token behavior inference heuristics. Our evaluation on a manually labeled dataset shows that FRBScan achieves 98.7% accuracy in identifying financially risky behaviors, with an average analysis time of just 4.73 seconds per contract. In contrast, the baseline tool Pied-Piper achieves only 72.5% accuracy while taking approximately 27.2 times longer, highlighting FRBScan's superior efficiency and effectiveness. Leveraging FRBScan, we conduct a large-scale study of ERC20 token contracts in Ethereum, and find that each type of financially risky behavior is present in practice, with 65.8% of token contracts exhibiting at least one such behavior. These findings underscore the widespread prevalence of financially risky behaviors in practice, and highlight the substantial threats they pose to DeFi applications.
탈중앙화 금융(DeFi)·탈중앙화 자율조직(DAO)의 확산으로 책임 주체를 식별 가능한 조직이 전제인 전통적 규제체계에 발생하는 규제 공백에 대응하여 미국 연방지방법원은 DAO의 단체법적 지위와 책임 구조에 대한 법리를 제시하고 있다. 상품선물거래위원회(CFTC) v. Ooki DAO 사건에서 CFTC는 DAO를 캘리포니아 회사법의 비법인사단(unincorporated association)·상품거래법의 인격체(person)로 특정하여 소송 능력을 주장하였고, 캘리포니아 북부지방법원은 대체 송달·소송 능력을 인정하여 금지명령(injunctions) 등을 부과하였다. Sarcuni v. bZx DAO 사건에서 원고는 해킹으로 인한 이용자의 재산 손실 관련 DAO의 거버넌스·거래지원 추진·마케팅·수익 활동에 적극 관여한 설립자·개발자·벤처 캐피탈(VC)(‘핵심 이용자’) 등에 과실(negligence)을 원인으로 손해배상을 청구하였다. 캘리포니아 남부지방법원은 핵심 이용자 일부에 캘리포니아 회사법의 일반조합(general partnership) 성립과 조합원(partner) 지위의 개연성을 인정하여 조합원 공동·연대책임(joint and several liability)을 전제로 책임 구조를 검토하였다. Samuels v. Lido DAO 사건·Houghton v. Leshner 사건에서 캘리포니아 북부지방법원은 핵심 이용자 등에 증권법 §12(a)(1) 법정 판매자(statutory seller) 성립과 조합원 공동·연대책임의 개연성을 시사하였다. 이는 규제 공백을 해소하는 장점이 존재하지만, 조합원 범위의 모호성과 공동·연대책임이 생태계 위축을 초래할 위험성도 우려된다.<br/> 우리나라도 DAO의 단체법적 지위와 책임 구조를 시급하게 논의하여야 한다. ① 공동 목적·규칙·거버넌스·트레저리·지배 구조 기반 단체 DAO에 조합·비법인사단·회사 등 전통적 단체법을 적용하여 단체법적 지위와 책임 구조를 판단하여야 한다. ② DAO 토큰은 순수 유틸리티형 토큰·거버넌스 토큰·지분형 토큰 등 권리 구조와 실질적 지배·통제 권한에 근거하여 가상자산사업자 규율을 적용할 필요가 있다. ③ 중장기적으로 DAO 특례 입법을 통해 등록 DAO에 구성원 유한책임을 인정하고, 미등록 DAO에 불리한 추론을 적용하며, 법무법인·회계법인·VC·가상자산거래소 등 게이트키퍼 책임 모델을 설계하여 이용자 보호를 도모하여야 한다. ④ 발행인·판매자·서비스 제공자를 실질적 영향력과 이익 귀속을 기준으로 특정하고, 핵심 이용자 등을 책임 주체로 식별하며, 토큰 소량 보유자·수동적 이용자는 면책하는 등 책임 범위의 정교화가 요구된다.
The exponential rise of blockchain technology is changing the way organizations operate, including in enforcement. Standard means of conflict resolution whether through courts or arbitration/mediation bodies, regularly face questions of cost, delay, jurisdiction and transparency. One of the innovations in an online and global market can be the blockchain-based decentralized judicial systems, as a result of such limitations. Family law disputes as a case study for the indepth analysis of DDR Blockchain-based Decentralized Dispute Resolution (DDR) systems, and how they could disrupt justice delivery processes in future. Both such models allow people to work out their differences without or so much help from a central authority. They accomplish this using decentralized governance, distributed ledgers, cryptographic security, and smart contracts. Disputes are settled using transparent rules, automated policing and community-based judgment. Critical topics are touched upon simultaneously: the legality of the system, pitfalls of bad governance, challenges to its scalability, voting biases in token systems and ethical dilemmas raised by machine decision-making. Decentralized methods of justice, the study suggests, are unlikely to replace courts as we know them in the near future. Rather, they're promising as secondary solutions - especially in the Web3 world, for digital assets, online commerce, and cross-border transactions. Blockchain dispute resolution can revolutionize the industry of justice in a digital era. It takes away intermediaries on the way to good legal systems through technology. This will enhance the legitimacy, effectiveness and accessibility of dispute resolution for all stakeholders.
Abstract Decentralized autonomous organizations (DAOs) are a still-evolving organizational form. As such, they face unique challenges in dispute resolution. These challenges start with the definition of what constitutes a DAO dispute, compounded by the oftentimes pseudonymous identity of parties, the absence of traditional hierarchical structures, and opaque power dynamics. In addition, governance and operations are frequently—though not invariably—implemented using blockchain technology and smart contracts, adding further complexity. This chapter explores the intricacies of DAO disputes by attempting a definition and examining both internal conflicts and external challenges, outlining DAO-specific obstacles in dispute resolution and drawing from real world examples, including interviews with DAO practitioners. There is a clear need for DAOs to plan for disputes and establish clear rules and guidelines for dispute resolution (both on- and off-chain) from the outset.
Transparency and standing are two different things, and professional reliance was always built on the second. When an auditor, an independent expert, or a rating analyst signs a conclusion that others act on, what entitles the reliance is not that the reasoning could be inspected — it is that a disciplined producer, one with a licence to lose, reputational capital staked, liability that bites, formed under an oversight regime, stood behind it. When an AI produces the conclusion, that standing is vacated at the producing node while a signature keeps liability formally in place. The natural hope is that making the AI fully transparent and reconstructable repairs the loss. This formal companion shows it does not, and locates exactly why: transparency adds access, the missing thing is standing, and these lie on different axes. We model warranted reliance as a weakly increasing functional D(S, k; χ) of producer-stake S, owner-access k, and consequence-bearing conferral χ, against an entitlement-to-rely bar τ. The contribution is a diagnostic framework and one reusable tool — an antecedent, falsifiable closure-rule key that decides when a conclusion-class carries a transparency-proof standing residue, exhibited across four professional domains (fairness opinions, audit, ratings, due diligence). Within it the warrant deficit splits into a control component access-transparency strictly eases and a standing component it leaves invariant (Theorem 1). Against the sanction-based toolkit the paper supplies one general baseline result plus one conditional, domain-testable failure mode. Generally, every deterrence / gatekeeper-liability / observability lever enters as a product π·S, so at a stakeless producer (S = 0, χ = 0) each is zero for any detection probability (Theorem 2). Separately — and without the institutional reading of τ — a fault-taxonomy-dependent instrument, commonly implemented by pricing a validated fault-incidence rate, cannot be sized on faults outside its reference taxonomy; an aggregate-outcome-triggered instrument remains available and fails to discipline the residual only where the residual signal is non-contractible or no feasible producer action moves its distribution. Access cannot reach a residue that does not lie on the access axis; it closes only by restoring standing, as producer-stake or as a consequence-bearing conferral — the remedy, not transparency.
Decentralized autonomous organizations (DAOs) and AI-agent systems combine cryptographic execution with blockchain-based governance, yet observed organizations almost universally combine these mechanisms with a conventional legal entity—a foundation, statutory DAO form, or limited liability wrapper. I develop a stylized model in which token-holders jointly determine wrapper choice and governance concentration, generating multiple equilibria: an inefficient trap in which the wrapper coalition cannot form because no holder will absorb the front-loaded fixed cost alone, and an efficient wrapper equilibrium in which the coalition reaches scale and amortizesfixed costs effectively. The trap is an empirically grounded coordination problem rather than an analytical artifact, and a global-games selection argument identifies the threshold at which institutional design tips the system between equilibria. The framework reframes the CFTC v. Ooki DAO ruling, the Wyoming DAO LLC and DUNA statutes, and AI legal personhood debates as questions of equilibrium selection rather than of substantive cost allocation, and bounds the “Coasean singularity” claim that AI agents dramatically reduce transaction frictions.
Modern cloud-based AI training relies on extensive telemetry and logs to ensure accountability. While these audit trails enable retrospective inspection, they struggle to address the inherent non-determinism of deep learning. Stochastic operations, such as dropout, create an ambiguity surface where attackers can mask malicious manipulations as natural random variance, granting them plausible deniability. Consequently, existing logging mechanisms cannot verify whether stochastic values were generated and applied honestly without exposing sensitive training data. To close this integrity gap, we introduce Verifiable Dropout, a privacy-preserving mechanism based on zero-knowledge proofs. We treat stochasticity not as an excuse but as a verifiable claim. Our approach binds dropout masks to a deterministic, cryptographically verifiable seed and proves the correct execution of the dropout operation. This design enables users to audit the integrity of stochastic training steps post-hoc, ensuring that randomness was neither biased nor cherry-picked, while strictly preserving the confidentiality of the model and data.
H Kim, Gyu M. Lee, Junsik Sim, Jun-Seok Park · 5 authors
It has been a decade since decentralized finance emerged. With the advent of smart contracts, numerous financial products are being built on blockchains. Despite limitations such as gas fee restrictions and the need for oracles, smart contracts are bringing about financial innovation. Smart contracts are a crucial tool for implementing financial automation, ideally suited for eliminating intermediaries and implementing atomic transactions. For a transaction to occur, a price must be determined. Over the years, the Black-Scholes equation, which determines options pricing, the market scoring rules (e.g., LMSR) that enable prediction markets, and the constant product formula (e.g., CPMM), which is at the heart of automatic market makers (AMMs), have been developed. Prices are highly subjective, and in reality, multiple prices exist for a single product. However, in decentralized finance, a single price is mathematically determined in a specific situation and accepted without resistance by the market, a remarkable phenomenon. This paper examines why prices must be mathematically determined and why they remain consistent with real-world prices. It also ex-amines how these prices are determined mathematically. Further-more, it examines the price determination mechanism from a cybernetic perspective. In particular, we analyze the phenomenon in which prediction market prices are also used as automatic market makers, and clearly distinguish the difference between the use of market scoring rules and constant product formulas. This paper demonstrates the existence of both path-independent and path-de-pendent prices. While path-independent prices have been extensively studied, research on path-independent pricing has been sparse.
Smart contracts, a revolutionary technology that offers a digital alternative to conventional contracts, are popular. Smart contracts also known as automated digital contracts are becoming common in various countries due to their efficiency and openness. Various national and global forums have agreed that smart contracts might alter contract enforcement and boost economic development in India. Given this, it’s crucial to understand the Indian Contract Act, (ICA) 1872 stance on smart contracts. ICA requires testing smart contracts for contractual validity before entering the uncharted seas of autonomous and anonymous digital contracting. This experiment raises many issues, especially given the law’s strict procedural structure. This article refutes the claim that smart contracts should be regulated by self-regulation. Rather author prefers a broad interpretation of substantive contractual law to harmonize smart contracts under the ICA, following common law’s flexibility. It is shown that smart contracts are built on the same principles as common law contracts and deepen our research in the framework of Indian law and precedent. Similar approaches from other countries support this perspective. Although many legislations require change, it is believed that a smart contract law is not needed. The paper concludes by proposing solutions to the potential obstacles that may arise due to present approach.
Do Tran Anh Duc, Lê Thái Hùng, Hoang-Phuong Chu-Nguyen, Van-Hau Pham · 5 authors
The increasing deployment of smart contracts has drawn significant attention to the urgent need for robust and scalable vulnerability detection techniques to mitigate substantial financial risks associated with their immutable nature on blockchain platforms. This paper introduces structured reasoning prompts using agent-role chaining for vulnerability detection that utilizes model capacity to enhance smart contract security through zero-shot and structured prompt engineering without fine-tuning. By carefully defining agent roles and embedding explicit reasoning steps within structured prompts for large language models (LLMs), the proposed method exploits the inherent reasoning capabilities of LLMs to identify security flaws in smart contracts without extensive model retraining. Experimental results demonstrate the effectiveness of the system in achieving competitive performance compared to existing vulnerability detection techniques, highlighting the potential of prompt engineering as an efficient and adaptable strategy for enhancing smart contract security.
Francisco das Chagas Bezerra Neto, Jonathan Barros Vita
Contextualização: Este estudo investiga o uso de Non-Fungible Tokens (NFTs) como mecanismo de autenticidade de produtos, sob a perspectiva da Análise Econômica do Direito. A pesquisa está inserida no contexto do avanço tecnológico e suas implicações para a autenticidade e rastreabilidade de produtos, especialmente no mercado de luxo. A problemática abordada é a crescente necessidade de mecanismos eficazes para combater fraudes e falsificações, justificando a relevância do trabalho ao conectar essas questões com os objetivos de garantir maior transparência e proteção legal aos consumidores. Objetivo: O objetivo geral do estudo é analisar os efeitos da implementação de NFTs como método de autenticação de produtos no mercado criativo, enquanto os objetivos específicos incluem a avaliação dos impactos econômicos e legais dessa tecnologia, bem como a identificação dos desafios regulatórios e tecnológicos para sua adoção em larga escala. Metodologia: A metodologia adotada é de natureza qualitativa, com um estudo descritivo e hipotético-dedutivo. Os dados foram coletados a partir de fontes primárias, como documentos técnicos do Projeto Aura Blockchain, e secundárias, como trabalhos acadêmicos e relatórios do setor. A análise dos dados foi realizada com base nos princípios da Análise Econômica do Direito, associando os custos e benefícios do uso dos NFTs às estruturas jurídicas e econômicas. Resultados: Os principais resultados indicam que os NFTs têm o potencial de reduzir significativamente os danos econômicos causados pela falsificação, além de proporcionar maior proteção legal aos consumidores. No entanto, desafios como o custo de execução, obstáculos regulatórios e a aceitação social da tecnologia podem impactar sua adoção em larga escala. A pesquisa conclui que, apesar dos desafios, os NFTs representam uma inovação promissora para a autenticidade de produtos, com implicações significativas para a economia digital e a proteção da propriedade intelectual.
We analyze the vulnerability of decentralized autonomous organizations (DAOs) to speculative exploitation via their redemption mechanisms. Studying a game-theoretic model of repeated auctions for governance shares with speculators, we characterize the conditions under which -- in equilibrium -- an exploitative exit is guaranteed to occur, occurs in expectation, or never occurs. We evaluate four redemption mechanisms and extend our model to include atomic exits, time delays, and DAO spending strategies. Our results highlight an inherent tension in DAO design: mechanisms intended to protect members from majority attacks can inadvertently create opportunities for costly speculative exploitation. We highlight governance mechanisms that can be used to prevent speculation.
In this article, we propose a new form of decentralized autonomous organization (DAO) governance that uses a sequential auction mechanism to overcome the entrenched control issues that have emerged for DAOs by creating a regime of temporary contestable control. The mechanism avoids potential public choice problems inherent in voting approaches but at the same time provides a vehicle that can enhance and secure value that inheres to DAO voting and other DAO non-market governance procedures. It is robust to empty voting and is code feasible. The mechanism not only facilitates the ability of DAOs to meet their normative and operational goals in the face of diverse regulatory approaches, but also strengthens the case for creating a less burdensome but at least equally effective regulatory regime for DAOs that employ the mechanism. Designed to shift control to the party with the most promising business plan, at the same time, it deters value destruction by control parties, maximizes social surplus, and distributes that surplus in a way that tends to promote investment by other parties both at start up and on an ongoing basis.
As the development of Solidity contracts on Ethereum , more developers are reusing them on other compatible blockchains. However, developers may overlook the differences between the designs of the blockchain system, such as the Gas Mechanism and Consensus Protocol , leading to the same contracts on different blockchains not being able to achieve consistent execution as on Ethereum . This inconsistency reveals design flaws in reused contracts, exposing code smells that hinder code reusability, and we define this inconsistency as EVM-Inequivalent Code Smells . In this paper, we conducted the first empirical study to reveal the causes and characteristics of EVM-Inequivalent Code Smells . To ensure the identified smells reflect real developer concerns, we collected and analyzed 1,379 security audit reports and 326 Stack Overflow posts related to reused contracts on EVM-compatible blockchains, such as Binance Smart Chain (BSC) and Polygon . Using the open card sorting method, we defined six types of EVM-Inequivalent Code Smells . For automated detection, we developed a tool named EquivGuard . It employs static taint analysis to identify key paths from different patterns and uses symbolic execution to verify path reachability. Our analysis of 905,948 contracts across six major blockchains shows that EVM-Inequivalent Code Smells are widespread, with an average prevalence of 17.70%. While contracts with code smells do not necessarily lead to financial loss and attacks, their high prevalence and significant asset management underscore the potential threats of reusing these smelly Ethereum contracts. Thus, developers are advised to abandon Copy-and-Paste programming practices and detect EVM-Inequivalent Code Smells before reusing Ethereum contracts.
Os chamados smart contracts ou “contratos inteligentes” são uma inovação tecnológica difundida a partir do lançamento da plataforma Bitcoin em 2009 e, principalmente, da plataforma Ethereum em 2014. Em princípio, eles têm como propósito automatizar a execução das obrigações das partes em um negócio jurídico, de modo a diminuir o risco de seu inadimplemento e evitar a dependência de um terceiro de confiança (seja ele um árbitro, um juiz ou mero registrador dos dados referentes à transação celebrada). O potencial uso de smart contracts em vários setores econômicos desperta questionamentos sobre a adequação das normas do direito contratual tradicional para sua regulação. No presente trabalho, busca-se analisar dois pontos específicos sobre o tema, a saber: o momento de formação do negócio jurídico segundo a disciplina trazida pelo Código Civil brasileiro e as consequências de um contrato inteligente com objeto ilegal. O trabalho revisa amostra da literatura dedicada ao tema, tanto nacional quanto estrangeira, esta última sobretudo quando provinda de autores dos Estados Unidos da América e de Estados membros da União Europeia. O texto também questiona a adequação dos novos negócios ao marco normativo brasileiro sobre negócios.
In recent years, the Ethereum platform has witnessed a proliferation of smart contracts, accompanied by exponential growth in total value locked (TVL). High-TVL smart contracts often require complex numerical computations, particularly in mathematical financial models used by many decentralized applications (DApps). Improper calculations can introduce numerical defects, posing potential security risks. Existing research primarily focuses on traditional numerical defects like integer overflow, and there is currently a lack of systematic research and effective detection methods targeting new types of numerical defects. In this paper, we identify five new types of numerical defects through the analysis of 1,199 audit reports by utilizing the open card method. Each defect is defined and illustrated with a code example to highlight its features and potential consequences. We also propose NumScout, a symbolic execution-based tool designed to detect these five defects. Specifically, the tool combines information from source code and bytecode, analyzing key operations such as comparisons and transfers, to effectively locate defects and report them based on predefined detection patterns. Furthermore, NumScout uses a large language model (LLM) to prune functions which are unrelated to numerical operations. This step allows symbolic execution to quickly enter the target function and improve runtime speed by 28.4%. We run NumScout on 6,617 real-world contracts and evaluated its performance based on manually labeled results. We find that 1,774 contracts contained at least one of the five defects, and the tool achieved an overall precision of 89.7%.
Propósito. Las compraventas requieren el cumplimiento de una solemnidad para su perfeccionamiento, como lo contempla el literal segundo del artículo 1857 del Código Civil. En contraste, la promesa de compraventa, si exige una solemnidad, aunque más flexible, según lo establece el numeral primero del artículo 1611 del mismo código, ya que solo se exige literalidad. Esta última será objeto de la investigación, pues puede reproducirse en un smart contract. No se trata únicamente de transcribir una promesa en un ordenador, si no que va más allá, aplicando el sistema descentralizado del Blockchain; que permite igualmente la descentralización de la información, creando así un “BackUp” automático de los metadatos que ingresemos. Metodología: Inductiva – Cualitativa de Derecho Comparado. Resultados: Colombia posee un gran potencial jurídico en tecnología e innovación, como lo demuestra su historial normativo. Desde hace décadas, leyes como la 270 de 1996 y la 527 de 1999 han sido pilares fundamentales en la construcción de una Colombia digital. Sin embargo, no fue sino hasta la llegada de una pandemia mundial que se permitió la realización de negocios, contratos y trámites judiciales a través de las nuevas tecnologías. Aún más relevante, este contexto impulsó la creación de nuevos despachos y oficinas orientados a la innovación y la integración tecnológica en la vida cotidiana del país. Conclusiones: Al automatizar las obligaciones contenidas en una promesa de compraventa, disminuiremos los riesgos de posibles errores o delitos en los contratos. Asimismo, se evitan equivocaciones involuntarias que podrían surgir en estos acuerdos.
Contract management in construction law plays a critical role in mitigating risks, ensuring performance enforcement, and facilitating dispute resolution.The increasing complexity of construction projects, coupled with evolving regulatory frameworks, necessitates robust contract management strategies to address financial, operational, and legal risks.Poorly managed contracts often lead to cost overruns, project delays, and disputes, making it essential for stakeholders to adopt proactive measures in drafting, executing, and enforcing contractual obligations.This study examines key aspects of contract management in construction law, focusing on risk allocation, dispute resolution mechanisms, and performance enforcement strategies.Risk mitigation strategies, including well-defined contract terms, contingency planning, and insurance provisions, are explored to illustrate how parties can safeguard their interests.The research also highlights the effectiveness of alternative dispute resolution (ADR) methods, such as mediation, arbitration, and adjudication, in reducing litigation costs and project disruptions.Furthermore, contract enforcement mechanisms, including penalty clauses, performance bonds, and liquidated damages, are analyzed for their role in ensuring compliance and timely project completion.The study also evaluates the impact of digital transformation on contract management, particularly the use of smart contracts and blockchain technology to enhance transparency, efficiency, and dispute prevention.Through case studies and legal precedents, this research provides practical insights into how construction professionals, legal practitioners, and policymakers can optimize contract management practices.A comprehensive approach to risk management, dispute resolution, and performance enforcement is essential to maintaining legal compliance, ensuring financial stability, and improving project delivery in the dynamic construction sector.
Abstract We develop an economic model to compare equilibrium security of Proof-of-Work (PoW) versus Proof-of-Stake (PoS) blockchains. We derive general conditions to determine when PoW blockchains are more secure than otherwise equivalent PoS blockchains and vice versa. Applying real-world parameter values to these conditions, we demonstrate that PoS blockchains are more secure than otherwise equivalent PoW blockchains. Furthermore, we demonstrate that PoS’s security advantage over PoW is particularly salient for high-scale blockchains.
The auction of Bored Ape #8817 for $3.4 million in October 2021 marked a watershed moment in the escalating trend of non-fungible tokens (NFTs). This chapter ventures into the core of the tokenization phenomenon, scrutinizing the legal implications of creating digital representations (tokens) of diverse assets. Amid the burgeoning NFT market, a pivotal question emerges: What precisely are the property rights conferred upon those acquiring these tokens? Beyond the staggering sales figures, the chapter dissects the tokenization process, emphasizing the NFT minting process and blockchain technology. It explores claims that NFTs herald the future of digital property, challenging traditional governmental powers. Anticipating legal challenges, the chapter navigates critical inquiries about token holders’ rights, the tethering (or not) of tokens to underlying assets, and the impact of the 2022 Uniform Commercial Code revisions. This chapter seeks to provide a nuanced perspective, unraveling legal realities from the fervor surrounding tokenization’s transformative potential in the digital era.