1.2.1 Principles overview

All Assets are Real

Within the Xend Finance environment, ‘RWA’ covers all legally transactable asset types - both tangible (physical) and intangible (digital, intellectual, legal). Within the OAE framework - all assets are classified as ‘real’, hence this adjective is no longer used. (Please refer to Appendix A: Understanding RWA for a more detailed explanation of our understanding of real world assets).

Real Assets Mean Real Identity

Every asset integrated into OAE must have its legal ownership confirmed, linked to a specific, verified Xend ID. Upon onboarding as smart contracts, these assets' ownership is represented through tokens tied to the verified Xend ID, ensuring clarity and security in ownership representation.

Onchain Ownership Homogeneity

OAE requires that all onboarded assets have full ownership coverage on Asset Chain. In cases of shared ownership over assets:

1. each share can be onboarded as an independent stand-alone asset ( if it’s legally possible for the given asset and ownership type) or

2. all co-owners must have Xend IDs and sign-off the onboarding of the co-owned asset plus accept their ownership tokens.

For example if someone owns 50% share in the real estate, that 50% share can be onboarded as independent intangible asset, or otherwise the owner of remaining 50% will also need to setup Xend ID and sign-off the onboarding of that real estate to Asset Chain, which will result in both parties receiving 50% ownership share tokens linked with their real estate smart contract.

Harmonizing Web3 Standards With Legal Standards

Our goal is to clean up the legal complexities and ambiguities related to ownership constructs that have accumulated in the blockchain industry over the years, as such we will promote full awareness of the following blockchain legal principles:

1. Promoting token standards that better reflect specific ownership rights

2. Using smart contracts for digitalization of assets existence

3. Using tokens for digitalization of asset ownership-related rights

4. Creating environments that recognizes and supports separation of existence, ownership, possession and holding constructs.

5. Gradual expansion compliance synchronization of smart contracts and token types based on legally recognizable assets definitions and ownership or possession rights.

6. Gradual synchronizing of adopted solutions with all existing regulatory frameworks.

Tokenizing Any Right to an Asset, Not Just Ownership

OAE token standards facilitate the digital representation of a wide array of rights associated with onboarded assets, extending beyond ownership right. This encompasses possession rights, collaterals, mortgages, usufructs, licensing, and more. Many of these rights can be independently onboarded as standalone assets, enabling their further tokenization and fractionalization.

Holding is Not Owning

In OAE, wallets hold tokens that represent specific rights to assets, each linked to standards that align with legally recognized frameworks for asset-oriented rights. Holding a token in OAE doesn't equate to owning the asset itself but rather owning a digital representation of a particular right associated with that asset.

Protecting Ownership Instead of Further Limiting

We will abstain from promoting any ‘entity wrapping’ solutions as the asset tokenization engine or any other method that forces users to convert their ownership right to legal claimability. Onboarding assets on a chain should always verify and materialize existing relations between the asset and its owners, without any intermediaries.

Unity Over Fragmentation

We will reduce fragmentation in digital finance and blockchain space by consolidating wide array of applications and features under following unified interfaces:

• OAE - On-chain assets environment, designed as a single unified framework and blockchain for tokenized real world assets issuance and management.

• Xend Browser - next evolution of OAE, consolidating entire Xend Framework and blockchain infrastructure under simple web browser software.

Quantified credibility assessment of tokenized assets

We will create a public platform for on-chain tokenized asset that provides full transparency on:

1. How their existence is authenticated

2. What is the asset’s insurance policy for tokenized ownership units holders covering potential damages

3. How legal status of the asset is confirmed and validated

Platform will quantify the above measures as an overlay asset credibility score, which will be displayed alongside the reputation score of 3rd parties who are working on its ongoing authentication, insurance and compliance validation.

Promoting assets legalization

Our framework will be designed in a way that promotes ‘intrinsic legalization’ of onboarded asset through linking them with specific legally recognized asset types and minting tokens based on standards that are ‘legally synced’ with universal ownership regulations.

Working with local partners to scale

We will set up a cooperation framework with local partners including legal offices, insurance providers and asset authenticators, to create ‘IAC hub’ - providers that are expected to enable fair, standardized credibility assessment of assets brought on-chain. continuously working on onboarding and developing the given country to the OAE framework.

Progressive regulatory adoption

Our long term goal is to convert OAE into a framework that is fully functional in every existing country through bi-directional 1:1 replication of events between blockchain and the regulatory / organization framework of a given country., and having dedicated country-based councils of insurance providers, asset authentication and compliance validators (IAC) governing the gradual adoption of the OAE framework by each country.