Modeling the Effects of Real-World Asset Tokenization on Islamic Finance Using Layer 2 Blockchain, Smart Contracts, and Quantum Monte Carlo Simulation

Karimi, Hamidreza; Mousavi, Zahra Sadat

doi:10.25843/JIFM.2025.8563.21664

Modeling the Effects of Real-World Asset Tokenization on Islamic Finance Using Layer 2 Blockchain, Smart Contracts, and Quantum Monte Carlo Simulation

Document Type : Original Article

Authors

Hamidreza Karimi ¹

Zahra Sadat Mousavi ²

¹ PhD in Financial Management, Allameh Tabataba’i University, Tehran, Iran

² Master’s Degree in Financial Management, Allameh Tabataba’i University, Tehran, Iran

10.25843/JIFM.2025.8563.21664

Abstract

This study proposes a novel framework for analyzing and modeling financial systems based on tokenized real-world assets by investigating the combined effects of asset tokenization, Layer 2 blockchain infrastructure, smart contracts, and advanced simulation techniques on efficiency, risk, and liquidity in decentralized financial systems. In recent years, the rapid development of financial technologies and the expansion of digital assets have fundamentally transformed the structure of financial markets. Concepts such as real-world asset tokenization and decentralized finance (DeFi) have emerged as key components in redesigning modern financial infrastructures. However, challenges such as limited scalability, increased systemic risk, and the complexity of modeling digital market behavior remain significant obstacles.
In this study, a hybrid modeling framework based on classical and quantum Monte Carlo simulation is developed to evaluate the behavior of tokenized assets under different market scenarios. The impact of Layer 2 blockchain architecture on network efficiency is also analyzed using a performance metric defined as the ratio of processed transactions to network latency. Furthermore, smart contracts are incorporated as self-executing mechanisms aimed at reducing transaction costs and improving transparency within the financial system. The simulation results indicate that increasing the tokenization rate up to an optimal threshold enhances both liquidity and asset returns; however, beyond this level, volatility and systemic risk begin to rise significantly. Additionally, the use of Layer 2 blockchain solutions substantially improves network efficiency by increasing transaction throughput and reducing latency. A comparative analysis of computational methods further reveals that quantum Monte Carlo simulation outperforms its classical counterpart in terms of both accuracy and computational complexity reduction.
Overall, the findings suggest that the integration of emerging financial technologies can lead to a more efficient, transparent, and scalable financial architecture. Nevertheless, effective risk management strategies are essential to address the potential instability arising from increased financial digitization and market interconnectedness.

Keywords

Real-World Asset Tokenization

Layer-2 Blockchain

Smart Contracts

Quantum Monte Carlo

Decentralized Finance (DeFi)