The physical objects are protected from this by being held by independent custodians (for vaulted assets like gold) or SPVs (for things like land) generally speaking.
If we can't figure out how to prevent this for a given asset, we don't touch that asset.
No, the land is being transferred, but it's a two-part transaction: an obligation, and then the later fulfilment of the obligation by updating the national land registry.
But part one can be done many times before part two has to be done.
So there is ownership in an SPV and the land? Sorry, I don't quite get the structure. Does the SPV "encumber" the land to make a direct transfer not possible then? If I directly own the land, what role has the SPV?
The NFT imposes an obligation on the SPV. This obligation can move around many times.
The NFT owner can then, at their option, pull the land out of the SPV (and the NFT is burned in the process!) to take ownership via the land register being updated.
The NFT purchase is still the transfer of the interest in the land, and the point where stamp duty is paid to the UK government. That's where the value transfer happens.
Thanks, I see. The NFT purchase gives ownership of SPV and directly putting the name in the land register burns the NFT, i.e., NFT does not give direct land ownership immediately? Unless, of course, direct ownership in the UK is possible without being named in the land register (interest/tax is different) - don't know the specifics there.
In other countries this could be similar to signing a contract to purchase land which creates interest and tax liability prior to entry in registry, but final source of who owns it in the end is a registry.
Yes I think that's pretty much exactly it. We operate in a way which works in 170 countries (or a few less, there are some exceptions for real estate because it's very very localised). Getting down to the legal fundamentals really helps: "who is paying who for what?" and as long as the underlying transaction is clean, clear and well-understood, there is pretty much always a way to make it work legally.
Like a warehouse receipt, or several other things - this pattern repeats in many different areas of trade, and what people call it and how precisely they do the legal paperwork varies.
But yes: you have the token, you have the right to the thing, and the supporting legals implement consequences in the real world or on chain via escrows if that right is not met.
