> which defeats the whole point of a decentralized, trust-less blockchain, and you could let that trusted party just run a centralized database
A centralized token (like USDC) being held in a trustless wallet is much much better and more useful than the traditional financial system.
For example, USDC in my wallet can be lent out in any onchain lending venue I pick and be sent to anybody in the world instantly.
> lose a private key with real-world assets
You're right, private key security is super important. The practical solution here is that there will be many different kinds of wallets with different trust assumptions and recovery models, and people/corporations will be directed to use the one that's net best for them. Many will be fully or semi custodial.
> When the tokens represent real-world assets the two are not in sync, and there's a risk they may not be reconcilable
Right. The idea here is to have very stringent evaluations of tokenization frameworks, to figure out which real-world asset tokens are actually quality bearer assets (from both a legal and technical standpoint) and which are not. An early example of the work here is BlueChip's stablecoin ratings https://bluechip.org/en
A centralized token (like USDC) being held in a trustless wallet is much much better and more useful than the traditional financial system.
For example, USDC in my wallet can be lent out in any onchain lending venue I pick and be sent to anybody in the world instantly.
> lose a private key with real-world assets
You're right, private key security is super important. The practical solution here is that there will be many different kinds of wallets with different trust assumptions and recovery models, and people/corporations will be directed to use the one that's net best for them. Many will be fully or semi custodial.
> When the tokens represent real-world assets the two are not in sync, and there's a risk they may not be reconcilable
Right. The idea here is to have very stringent evaluations of tokenization frameworks, to figure out which real-world asset tokens are actually quality bearer assets (from both a legal and technical standpoint) and which are not. An early example of the work here is BlueChip's stablecoin ratings https://bluechip.org/en