Tokenising property

Veronica Zerba (University of Trento)
Edoardo D. Martino (University of Amsterdam)

Abstract

The rise of NFTs have changed the blockchain landscape, allowing to tokenize and trade chain “real-world” off-chain assets and build claims on such assets. Such underlying assets can therefore be the object of transaction both on-chain and off-chain. Thanks to its technological design, the blockchain provide a solution for the double spending problems but only for on-chain transaction. Therefore, there is the possibility that incompatible contracts are concluded.
In an off-chain environment, incompatible contracts are analysed by Hansmann and Kraakmann who demonstrated that property rights numerus clausus is an evolutionary efficient way to address the problem of incompatible contracts.
This paper discusses how blockchain tokenisation disrupt this long-lasting state of things, showing how the technological design of the blockchain replicates many, but not all, the feature of property rights.
The analysis is based on a wide law & economics literature that has dealt with the topic that allows us to build an analytical framework to approach the issue. Thereafter, we provide real-life two examples that highlight how the blockchain commingles features of property rights and contract right, discussing the implications of this feature

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