What is the Tokenisation pattern, and what does the chain guarantee about a token versus what it cannot?

Represent a transferable, fungible asset as an on-chain token so ownership and transfer are tracked verifiably — the chain guarantees the token's own integrity, but not that the real-world asset behind it is authentic or legally follows the token.

• Problem. A token should be the authoritative source of the corresponding asset (money, shares, tickets), while reducing the risk of handling high-value instruments directly.
• Solution. A token represents value or title over an asset; transactions record verifiable title transfer between users. Native chain tokens (like Bitcoin's BTC) can do this but only for simple title transfer with limited condition-checking. A more flexible approach defines a data structure in a smart contract: the real asset is locked under custody (say, a bank), a token represents its ownership, and redeeming the token recovers the asset.
• Benefits. Risk reduction (equivalents replace the physical instrument) and authority (the chain provides a trustworthy source of the authorised token).
• Drawbacks. Integrity gap (the token's integrity is guaranteed, but the authenticity of the physical/digital asset is not automatic). Standardisation (interoperability pushed toward standards like ERC20/ERC777). Legal processes (a court order, bankruptcy, or off-chain sale can change real ownership with no matching on-chain transaction — so the token isn't always truly authoritative).

Go deeper:

• ERC-20 token standard (ethereum.org) — the canonical fungible-token interface (balanceOf, transfer, approve) that makes tokenised assets interoperable across wallets and exchanges.