Knowledge · Glossary
A working reference for the legal, financial, evidential and technical terms used across Rwannie.
Reference, not shorthand
RWA token
A digital unit linked to rights in an underlying asset or cash flow.
The token is the digital representation, not the physical asset itself. Its value depends on the legal rights it carries, the entity that issues it, and whether those rights can be enforced against the underlying asset or its income.
RWA
A physical, financial or contractual asset represented or administered using digital rails.
Real-world assets can include property, credit, commodities, infrastructure, receivables and contractual income streams. The label does not make an asset safe, liquid or investable; each structure must be assessed on its own evidence and rights.
Representing defined rights in an asset through digitally recorded units.
Tokenisation can change how ownership, transfers, distributions and records are administered. It does not remove the need for lawful title, a valid issuer, custody, compliance, servicing or reliable information about the asset.
The property, contract, instrument or cash flow beneath a tokenised structure.
A credible structure identifies exactly what exists beneath the digital unit, who owns it, what produces value and what happens if an operator, issuer or technology provider fails.
Dividing economic or ownership interests into smaller units.
Fractionalisation can reduce ticket size, but it does not automatically create liquidity or direct title. Holders may own shares in an entity, contractual payment rights or beneficial interests rather than a slice of the asset itself.
SPV
A legal entity formed to hold an asset or isolate a specific transaction.
An SPV can separate the asset and its obligations from a sponsor's wider business. Its governing documents, ownership, bankruptcy treatment and permitted activities determine whether that separation works in practice.
The right to receive economic benefits even when legal title is held elsewhere.
A nominee, trustee or custodian may hold legal title while another person holds the beneficial interest. The distinction matters for voting, distributions, insolvency and enforcement.
A party responsible for safeguarding an asset, security or cryptographic key.
Custody can refer to physical property, financial instruments or digital keys. A review should identify what is held, for whom, under which standard, and what recovery process applies after loss or insolvency.
The party that administers collections, records, payments or asset operations.
For credit and income-producing assets, the servicer often turns contractual rights into actual cash collections. Continuity plans, replacement rights and reporting standards are therefore central to the structure.
The ordered rules that determine how available cash is distributed.
A waterfall normally pays fees, expenses, reserves and senior claims before junior or residual holders. Small changes to priority can materially change risk, so the sequence should be explicit and tested under stress.
A layer of financing with its own priority, return and loss position.
Senior tranches are generally paid before junior or residual tranches and therefore absorb losses later. The label alone is not enough: subordination, collateral, covenants and waterfall rules determine the actual protection.
Structural separation intended to reduce exposure to another party's insolvency.
It is a legal objective, not a guarantee. Reviewers examine ownership, governance, commingling, guarantees and the ability of creditors to consolidate or reach the asset-holding entity.
NAV
Assets minus liabilities, usually expressed for the whole vehicle or per unit.
NAV depends on valuation methods, timing and data quality. For illiquid assets it can be appraisal-based rather than a price available in an active market.
IRR
The discount rate that makes projected net cash flows equal the initial investment.
IRR is sensitive to timing, leverage, exit value and reinvestment assumptions. A modelled IRR is not a promised return and should be read alongside cash multiples, downside cases and the assumptions that drive it.
DSCR
Cash available for debt service divided by required debt payments.
A ratio above 1.0 indicates modelled cash coverage for the period; a ratio below 1.0 indicates a shortfall. Definitions vary, so the numerator, period and reserve treatment must be stated.
LTV
Debt divided by the value of the financed asset.
LTV indicates leverage at a point in time. It can rise when asset values fall even if debt is unchanged, so valuation method and update frequency matter.
The ability to buy or sell an interest without unacceptable delay or price impact.
Smaller digital units do not create buyers. Liquidity depends on transfer rules, market access, information, settlement, market-making and demand; it should never be inferred from tokenisation alone.
Testing outcomes under coherent downside, base and upside assumptions.
Scenarios are not probability-weighted forecasts unless explicitly designed that way. Their purpose is to reveal sensitivities, dependencies and conditions under which a thesis may fail.
Changing one or more inputs to see how strongly an output responds.
Sensitivity analysis helps identify the assumptions that deserve the most evidence. It does not account for every relationship unless the model explicitly links those variables.
Information taken from a named source with a stated date or context.
Observed information is checkable, but it may describe a market or sector rather than the specific asset. Source quality, scope and freshness still need to be assessed.
A visible input chosen for exploration or modelling rather than established as fact.
An assumption should state who chose it, why it is plausible and what evidence could replace it. Assumptions are legitimate working inputs when they are not disguised as observations.
An output calculated from observed information and assumptions.
Modelled figures describe what the chosen logic produces; they are not measurements or forecasts. Their usefulness depends on transparent inputs, sensible relationships and appropriate stress tests.
A structured investigation of an asset, its rights, parties, evidence and risks.
Good diligence tests title, contracts, permissions, operations, valuation, technology, compliance and conflicts. A checklist records coverage; it does not replace independent legal, tax, technical or investment review.
How much of a record's expected information is present and supported.
Coverage measures completeness of the record, not asset quality, safety or return. High coverage can still reveal an unattractive asset; low coverage means conclusions should carry less confidence.
The traceable origin and history of a fact, record, asset or digital representation.
Provenance answers where information came from, when it was captured, how it changed and who attested to it. It is central to both physical-asset verification and trustworthy data.
Code that executes defined actions on a blockchain or distributed ledger.
A smart contract can automate transfers, permissions and distributions, but it cannot independently verify every off-chain event. Audits, administration and lawful agreements remain necessary.
A service that supplies external information to on-chain software.
Oracles bridge off-chain events and digital execution. Their source quality, update method, fallback rules and manipulation resistance become part of the asset's operational risk.
Recorded or executed on a blockchain's shared ledger.
On-chain records can make transaction history easier to verify, but they do not prove that an off-chain asset exists or that legal rights are enforceable. The link between the two still needs evidence.
The completion of a transaction through transfer of value and ownership records.
Digital rails can reduce settlement time, but finality still depends on the payment asset, network, custody model and applicable legal rules.
A rule limiting who may receive, hold or move a tokenised interest.
Restrictions may arise from securities law, investor eligibility, geography, sanctions, lock-ups or governing documents. They can be encoded in technology, enforced contractually, or both.
Definitions explain how Rwannie uses these terms. They are educational, not legal, tax or investment advice; specific documents and jurisdictions may use them differently.
