# Key Terminologies

* **What is RWA (Real World Asset)?** 
  * An asset with economic value in the physical world or traditional financial system. Examples include: commercial real estate, residential properties, infrastructure projects, corporate debt, and private equity fund shares.
* **What is Tokenization?** 
  * The process of converting the ownership or income rights of an RWA into a digital token issued and circulated on a blockchain. Tokenization can greatly enhance an asset's liquidity, divisibility, and transparency.
* **What is an SPV (Special Purpose Vehicle)?** 
  * A legal entity created for a specific, dedicated purpose. In the RWA space, an independent SPV is typically established to hold each asset being tokenized. This acts as a "legal firewall," completely isolating the asset's risks from other assets and the issuing platform.
* **What is Staking?** 
  * In the context of RealFI, staking is not mining. It refers to the user locking their tokens (such as $sRUSD or RWA tokens) in the protocol's smart contract to prove their status as a long-term holder, thereby becoming eligible to receive profit distributions (dividends) generated by the protocol or a specific asset.
* **What is APY (Annual Percentage Yield)?** 
  * The real rate of return earned on an investment in one year, which includes the effect of **compounding**. For example, if a strategy generates a 1% return per month and the profits are reinvested each month, its APY will be higher than 12%.