Both tokenization and securitization involve converting illiquid assets into financial products that are liquid and tradable, thereby making them…

Since tokenization of illiquid assets attempts to convert illiquid assets into a product that is liquid and tradable and hence to some extent it resembles the process of Securitization. Hence, following are some similarities between Tokenization and Securitization: (i) Liquidity: - First and foremost both Securitization and Tokenization inject liquidity in the market for the assets which are otherwise illiquid assets. (ii) Diversification: - Both help investors to diversify their portfolio thus managing risk and optimizing returns. (iii) Trading: - Both are tradable hence helps to generate wealth. (iv) New Opportunities: - Both provide opportunities for financial institutions and related agencies to earn income through collection of fees. OR Pricing a weather derivative is quite challenging as it cannot be stored and following issues are involved: -Data: - The reliability of data is a big challenge as the availability of data quite differs from one country to another and even agency to agency within a country.Forecasting of weather: - Though various models can be used to make short term and long-term predictions about evolving weather conditions but it is difficult to predict the future weather behaviour as it is governed by dynamic factors. Generally, forecasts address seasonal levels but not the daily levels of temperature.Temperature Modelling: - Temperature is one of the important underlying for weather derivatives. The temperature normally remains quite constant across different months in a year. Hence, there is no such Model that can claim perfection and universality.