NFT vs. RWA in the Art Market: How Tokenization Is Redefining Ownership, Aura, and Value

From NFT Cultural Economies to RWA Art Finance: Shared Aura, Fractional Ownership, and the Emerging Hybrid Art Market

NFTs and RWAs both use blockchain to tokenize art. From a technological distance, they can therefore appear closely related. Yet Eun Mi Lee’s Comparative Study of Real-World Asset Tokenization and NFT Tokenization in the Art Market focuses on a more fundamental question: What, exactly, is being tokenized in each case?

With NFTs, what is traded is closer to digital identification and scarcity associated with an artwork. With RWAs, what is tokenized is a legally defined ownership interest or economic claim attached to a physical artwork. Beneath the shared language of “tokenization,” two substantially different systems of rights are operating.

Once this distinction is made, NFT and RWA no longer appear simply as successive generations of blockchain technology. In Lee’s framework, NFTs construct a cultural economy centered on creation and community, while RWAs construct a financial economy centered on ownership, regulation, and institutional trust. Rather than treating them primarily as competing technologies, the paper understands them as two systems responsible for organizing different kinds of value.

This distinction leads to two of the paper’s most interesting concepts: “shared aura” and the “dual economy of art.”

The Same Tokenization Technology, but Very Different Forms of Ownership

It is easy to say that purchasing an NFT means owning an artwork. The paper, however, separates blockchain ownership from legal ownership.

In most NFT transactions, the buyer does not automatically acquire the copyright to the digital image or legal ownership of the underlying work. What the buyer holds is an on-chain token associated with a particular digital object. Lee describes this as “representational ownership,” distinguishing it from legal ownership.

This distinction is crucial for understanding NFTs.

A blockchain can record with considerable precision which wallet possesses a token, when it was transferred, and from whom it was acquired. But those records do not automatically create copyright, property rights, or other legally enforceable claims over the corresponding artwork.

The strength of NFTs therefore lies less in generating legal property rights than in enabling a network to recognize the identity, transactional history, and scarcity of a digital object.

RWA tokenization begins from a different premise.

An RWA token is linked to an underlying physical asset and is designed to carry a legally recognizable ownership interest or economic claim. Blockchain alone is therefore insufficient. The system must also determine who legally owns the artwork, who stores it, who insures it, how it is appraised, and how proceeds will be distributed when the work is eventually sold.

The role of blockchain consequently changes.

With NFTs, blockchain substantially constitutes the way the asset exists as a unique digital object. With RWAs, blockchain functions more as an infrastructure for recording and distributing pre-existing legal and physical relationships.

RWA Translates Art into the Language of Finance

Among the various RWA structures discussed in the paper, Lee gives particular attention to the Special Purpose Vehicle, or SPV.

Under this model, a separate legal entity is established for an individual artwork. The SPV purchases and legally owns the artwork, while shares in the entity—or economic interests associated with the work—can then be distributed among multiple investors.

The significance of this structure lies in its ability to establish a clearly identifiable actor outside the blockchain.

A painting is not merely data stored on a server. It can burn, deteriorate, or be stolen. Its authenticity may need to be verified. It may require controlled temperature and humidity, specialist storage, insurance, transportation, and conservation. Smart contracts alone cannot perform these functions.

An SPV, by contrast, can become the legal owner and contractual party responsible for appraisal, insurance, custody, and eventual sale.

The paper uses Masterworks as a representative example. Masterworks establishes a legal entity for individual paintings and places the physical artwork within that entity. Investment interests are then offered under regulatory mechanisms such as the US SEC’s Regulation A+ framework.

Investors do not take the painting home. Instead, they acquire an economic interest in the performance of the artwork.

A transformation therefore occurs in the meaning of the artwork.

The painting remains physically intact in a storage facility or exhibition space, yet economic rights derived from the work become divisible, standardized, and transferable.

Lee describes this movement as an “institutional translation” of cultural value. Rather than necessarily erasing the cultural meaning of an artwork, RWA converts part of that meaning into concepts that financial systems can process: appraisal values, insurance coverage, custody arrangements, contracts, securities, investor protection, and fractional interests.

NFT Prices and RWA Prices Are Produced in Different Places

Table 1 of the paper provides one of its clearest summaries of the distinction between NFTs and RWAs.

The important issue is not simply how the assets are traded. It is what makes their prices credible.

In NFT markets, scarcity, narrative, and community are major sources of value. Attention surrounding a work, the network connecting artists and collectors, the history of a project, cultural status, and collective belief can directly influence price formation.

Market access is correspondingly open. Anyone with the necessary cryptocurrency and wallet can potentially participate, and on-chain settlement enables rapid transactions.

RWA markets operate with a different set of signals.

Appraisal values, the physical condition of the artwork, insurance coverage, custody arrangements, and the value of the underlying object provide important foundations for pricing. Identity verification, investor qualifications, contractual review, and regulatory procedures also become part of the transaction.

Trading becomes slower, but the number of institutional mechanisms supporting a valuation increases.

Seen from this angle, the difference between NFT and RWA is not adequately described as a difference between the “digital” and the “physical.” It is also a difference in where trust is produced.

NFTs depend heavily on blockchain records and the consensus of participating networks. RWAs add appraisers, insurers, custodians, corporations, intermediaries, and financial regulators to that system of trust.

This also explains the different risk structures presented in Table 1. NFT risks are associated with price volatility and uncertainties surrounding authenticity and ownership, whereas RWA risks are associated with limited liquidity and regulatory complexity.

One model lowers barriers to participation and accepts greater uncertainty. The other reduces certain forms of uncertainty through institutional procedures but introduces additional costs and restrictions.

The Paradox of a “Shared Aura”

The most distinctive conceptual contribution of the paper is its idea of a “shared aura.”

Walter Benjamin associated aura with the unique presence of an original work situated in a particular time and place. Mechanical reproduction weakens that singular relationship to the original, even as it makes art accessible to a wider public.

NFTs approach this long-standing problem from an unexpected direction.

A digital file can be copied indefinitely, yet blockchain can designate a particular token as unique. The paper interprets this through the concepts of algorithmic scarcity and on-chain authenticity.

Material uniqueness cannot simply be restored to the digital image. Instead, the network creates another kind of uniqueness—one produced through identification, provenance, and consensus.

RWA tokenization generates a different situation.

The physical uniqueness of the original artwork remains intact. What becomes divisible is not the artwork itself but the legal and economic rights connected to it.

This is where Lee introduces the possibility that aura may not simply disappear under fractionalization but instead become shared.

“Shared aura” does not mean physically cutting an artwork into separate pieces. The original remains singular, while legally and economically recognized relationships to that original are distributed across a larger group of participants.

Historically, a wealthy collector who owned a high-value painting could effectively monopolize not only its property rights but also part of the cultural and symbolic capital attached to ownership. Under a fractional structure, numerous participants can enter into an economic—and symbolically cultural—relationship with the same work.

A curious paradox follows.

Ownership is divided, yet the uniqueness of the artwork remains undivided.

Indeed, the singular object may become the center of relationships involving a larger number of people.

The paper invokes Particle Collection’s fractionalization of Banksy’s Love Is in the Air to illustrate this possibility. A single physical artwork becomes the focus around which multiple participants can share economic rights and a sense of cultural participation.

The relationship between original and owner consequently moves from something resembling one-to-one ownership toward a many-to-one structure.

Two Economies Begin to Operate Inside the Art Market

This analysis leads to another central concept in the paper: the “dual economy of art.”

NFTs help develop a participatory cultural economy in which artists, collectors, and communities can interact more directly. Artists can issue works without relying exclusively on traditional galleries or auction houses, and communities can take an active role in constructing the cultural value of projects.

The distance between creation and circulation becomes shorter.

RWA moves in a different direction.

Appraisers, custodians, insurers, corporations, financial intermediaries, and regulators return to the system.

At first glance, this might appear to be a retreat from blockchain’s early promise of decentralization. The paper, however, is less interested in deciding whether decentralization or institutionalization is inherently superior. Instead, it asks what kind of infrastructure becomes necessary when different kinds of value are traded.

Trading the cultural scarcity of a digital artwork and trading fractional interests in a multimillion-dollar physical painting require different forms of trust.

NFTs therefore tend to reduce or bypass intermediaries, while RWAs tend to formalize which intermediaries are necessary and make their responsibilities legally identifiable.

Two economic circuits consequently emerge within the same broader art market.

In one, attention, community, creativity, narrative, and symbolic identification play a central role.

In the other, appraisal, insurance, contracts, ownership, custody, and investment returns dominate.

Cultural capital and financial capital begin to circulate through different mechanisms.

US, EU, and Korean Regulations Reveal That Rights Matter More Than Token Names

Table 2 compares regulatory frameworks in the United States, the European Union, and South Korea.

Although their regulatory systems differ, the comparison reveals a broader tendency: as tokenization becomes institutionalized, what rights a token provides becomes more important than what the token is called.

In the United States, securities status becomes a central question. A conventional NFT may generally fall outside securities regulation, but a structure in which numerous investors acquire fractional interests in an asset with an expectation of financial return can move much closer to securities law.

This is why RWA projects are often associated with regulatory frameworks such as Regulation D and Regulation A+.

The European regulatory approach similarly distinguishes between genuinely non-fungible digital items and tokens containing financial claims or investment characteristics.

In South Korea, the paper describes art tokenization as increasingly being considered through legal forms such as beneficiary certificates and investment contract securities.

What emerges from Table 2 is therefore a change in the question being asked.

During the early blockchain period, the central question often seemed to be:

“What kind of token is this?”

As institutionalization progresses, a different question becomes increasingly important:

“What can the holder of this token legally claim?”

Attention moves from technological format toward structures of rights.

Combining NFT and RWA Could Give One Artwork Multiple Kinds of Rights

The paper does not conclude that RWA will simply replace NFT.

Instead, it proposes the possibility of a hybrid art economy in which the strengths of both structures are combined.

The model suggested for future development makes the idea particularly clear.

A physical artwork could be held through an SPV or trust, while economic ownership or profit rights associated with the work are issued as an RWA. At the same time, NFTs could provide non-financial rights such as digital exhibition access, participation in a community, royalty distribution, special content, or other forms of cultural engagement.

Imagine, for example, that the economic value of a physical artwork is divided into 10,000 interests.

RWA holders might receive a share of the proceeds if the artwork is later sold.

NFT holders, meanwhile, might gain access to online exhibitions, artist communities, special digital material, voting privileges, or other experiences surrounding the work.

Financial and cultural relationships to the same artwork could therefore be managed through separate but interconnected token systems.

The respective roles of NFT and RWA become much clearer under such a structure.

NFTs are particularly effective at gathering people around artworks and organizing cultural participation. RWAs are better suited to distributing economic rights within legally recognized systems.

NFT becomes an interface for cultural participation; RWA becomes an infrastructure for financial rights.

After Tokenization, What Changes Most May Be the Relationships Around Art

One of the most significant insights of the paper is that tokenization should not be understood merely as the conversion of artworks into digital objects.

The physical artwork may remain exactly where it is.

What changes are the relationships surrounding it.

Who verifies authenticity?

Who owns the artwork?

Who receives the benefit when its value rises?

Who can participate in the community surrounding it?

Who assumes responsibility for insurance and custody?

Blockchain automates some of these relationships, but it does not resolve all of them. The difference between NFT and RWA emerges from the different ways in which each system answers these questions.

NFTs expanded artistic scarcity from material objects into data and networks.

RWA takes another step by bringing legally and economically defined rights over physical works into digital networks.

The central question surrounding blockchain art consequently changes over time.

During the NFT boom, the question was often:

How can a digital image become an original?

With the rise of RWA, another question moves to the foreground:

How many different kinds of rights can be connected to a single original artwork?

From this perspective, the convergence of NFT and RWA involves more than the financialization of art. It creates conditions in which cultural participation rights and economic ownership rights can be separated, recombined, and distributed among different groups.

The traditional roles of artist, collector, investor, and audience may therefore begin to overlap.

This is where Lee’s comparison becomes particularly useful. Rather than treating NFT and RWA merely as two blockchain technologies, the paper understands them as two different ways of organizing value and rights around art.

NFTs broaden access by moving scarcity and community into digital networks. RWAs broaden another form of access by fractionalizing economic relationships to physical artworks.

One opens participation in expression and cultural networks; the other opens participation in asset ownership.

Where these two systems converge, one of the oldest questions in the art market also begins to change.

It is no longer sufficient to ask:

“Who owns this artwork?”

The more consequential question may become:

“Who holds which rights in relation to this artwork, and how are those rights distributed among different people?”

The transformation brought by NFT and RWA becomes most visible in this shift of the question itself.