Automated Risk Assessment Framework for Real World Assets (RWA) Based on ISO 31000: A Smartcontract Governance Perspective

Abstract

Blockchain technology has advanced and facilitated the emergence of Real World Asset (RWA) tokenization, which includes the digital representation of physical assets via smart contracts. RWAs have been rapidly adopted in Indonesia, especially among the younger generation. They are starting to use digital assets such as gold-backed tokens as a long-term investment instrument and are trusted by the public. This has resulted in a more complex risk profile and a requirement for a more structured approach to assessment. This study proposes an ISO 31000 based automated risk assessment framework using n8n and supported by Large Language Model (LLM). The system processes smart contracts, whitepapers, and terms and conditions to extract risk across four domains—Regulation, Jurisdiction, Governance, and Disclosure—and normalizes scores using the Likert scale. Quant was the highest scorer in the Regulatory domain at 3.69. XAUt topped the Governance domain with a score of 3.83 and PAXG scored 3.77. Overall, XAUt (3.29), PAXG (3.12) and Quant (3.02) fall in the high-risk category, and Chainlink (2.80) is medium risk. The research of these findings suggests that RWA assets are more vulnerable to governance and regulatory risks due to their reliance on centralized entities. In the future, this study will be used for supporting long-term investment decision making and provides an objective and measurable automated risk assessment model.