Most RWA due diligence fails at the first step: investors evaluate the marketing before they evaluate the asset. This checklist reverses that. Work through it in order. Each dimension has a minimum bar. If a project cannot clear the minimum bar on any dimension, stop there — the remaining dimensions do not matter.

Dimension 1: Legal Structure

Minimum bar: The legal entity that issues the token is identifiable, registered, and subject to the jurisdiction it claims.

  • ☐ What legal entity issues the token? (Name, jurisdiction, registration number)
  • ☐ Is the issuer registered with a financial regulator? (SEC, FCA, MAS, etc.) Which one?
  • ☐ Is the token classified as a security? If not, why not, and who provided that opinion?
  • ☐ Is the offering exempt from registration? Under what exemption? (Reg D, Reg S, Reg A+, etc.)
  • ☐ Are you eligible to invest? (Accredited investor threshold, jurisdiction restrictions)
  • ☐ Is there a legal opinion from a named, verifiable law firm in the disclosure documents?

Dimension 2: Asset Custody

Minimum bar: The underlying asset is held by a named, regulated custodian with an auditable custody arrangement.

  • ☐ Who holds the underlying asset? (Custodian name and regulator)
  • ☐ Is custody segregated? (Your assets held separately from the issuer's assets)
  • ☐ Are custody arrangements audited? By whom? How often?
  • ☐ Is there a published audit report available to investors?
  • ☐ What happens to the underlying asset if the issuer becomes insolvent?
  • ☐ Are the tokens legally linked to the underlying asset, or is the link contractual only?

Dimension 3: Smart Contract Security

Minimum bar: The smart contracts have been audited by a named, verifiable security firm and the audit report is public.

  • ☐ Has the contract been audited? By which firm? When?
  • ☐ Is the audit report publicly available? (URL, not just "yes, it was audited")
  • ☐ Is the contract source code verified on a block explorer?
  • ☐ Does the contract include freeze or clawback functions? (Required for regulated securities)
  • ☐ Has the contract been modified since the last audit? Has the modified version been re-audited?
  • ☐ Is there a bug bounty program? What is the maximum payout?

Dimension 4: Redemption Mechanics

Minimum bar: You can exit your position under defined conditions with a defined process and timeline.

  • ☐ How do you redeem? (On-chain burn, platform request, secondary market sale)
  • ☐ What is the minimum notice period for redemption?
  • ☐ Under what conditions can redemptions be suspended or gated?
  • ☐ Is there a secondary market? What is average daily volume?
  • ☐ What is the redemption timeline? (T+0, T+2, T+30, locked until maturity)
  • ☐ Is the redemption price at NAV, or is there a bid-ask spread or redemption fee?

Dimension 5: Yield Source

Minimum bar: The yield has a specific, verifiable real-world source that is not dependent on new capital inflows.

  • ☐ What generates the yield? (Interest payments, rental income, lending fees, staking rewards)
  • ☐ Is the yield source independent of new investor capital? (Not a Ponzi structure)
  • ☐ Is the yield rate fixed, variable, or projected? How was the projection calculated?
  • ☐ Who pays the yield? (Government, corporate borrower, tenant, protocol)
  • ☐ What is the credit quality of the yield payer?
  • ☐ Are fees disclosed? (Management fee, performance fee, protocol fee, gas costs)

Dimension 6: Team and Track Record

Minimum bar: The key people behind the project are identifiable and have verifiable relevant experience.

  • ☐ Who are the founders and executives? (Full names, not pseudonyms)
  • ☐ Do their LinkedIn profiles confirm the backgrounds claimed in marketing materials?
  • ☐ Has this team built and operated a similar product before? What was the outcome?
  • ☐ Are there identifiable advisors with verifiable credentials in the relevant field?
  • ☐ Is the legal and compliance function staffed? Who is the compliance officer?
  • ☐ Have any team members had regulatory actions or enforcement against them? (Search FINRA BrokerCheck, SEC EDGAR)
Quick Disqualifiers

Stop evaluating if any of these are true: anonymous team, no named custodian, no audit report (or audit by an unknown firm), yield that requires new investor capital to sustain, no legal opinion on token classification, redemptions described as "at any time" with no disclosed gate conditions.

→ DYOR Part 2: Reading the Data — on-chain verification for every checklist item
→ How to Read a Block Explorer — verify contracts and holdings on-chain
→ LinkedIn vs Twitter — how to research the team behind the project