2.8.8 Separating Ownership, Possession And Holding
Last updated
Last updated
The OAE policy regarding the separation of assets and rights allows introduction of a broader legal harmonization. This includes distinguishing between constructs of ownership, possession, and holding, which are now incorporated into blockchain technology.
Ownership, possession & OP bond
Ownership and possession rights are represented by two types of tokens:
Ownership Right Token: Can be bearer-based or identity-associated.
Possession Right Token: Similar to the ownership right token, it can be bearer-based or tied to an identity.
The connection between possession and ownership is established through a particular type of called ‘OP bond’, a feature built into the AssetChain's foundational layer. This setup ensures that:
Possession right token is inherently linked to the ownership right token
Creating a possession token necessitates adjustments to the corresponding ownership token.
It's impossible to duplicate possession rights (e.g., you cannot lease the same car to two different people simultaneously).
The transferability and operability of both possession and ownership tokens depends on specific parameters set at the Asset Smart Contract (SC) level.
For example, if you lend an apartment (i.e. issue possession token linked with apartment ownership token) you can’t issue more possession tokens for the already lent house. However, you might restrict a right that you can sell the property, even if it’s still leased to someone else (i.e. possession token linked with ownership token to that apartment is still active). Additionally, you can parametrize the possession token itself, e.g. make it time-limited (i.e. self-destruct after specific amount of time), or make it indefinite and transferable (until termination with 3-month notice to current holder)
Holding
Holding construct is derived from token rights sub-types.
Bearer Tokens: Holding a token with a bearer sub-type will always mean whoever holds that token is the owner of the right represented by it.
Identity-Associated Token: Holding of a token with identity-associated subtype, will mean that either:
Holder is owner of the right - in case of identify match
Holder is just holder - in case of identity mismatch
This distinction is vital for linking rights to assets with specific identities, ensuring the retention of ownership rights even if the tokens are moved. It is particularly crucial for tokens that represent individual rights, such as equity shares. In case of unauthorized transfers, the embedded identity ensures that the tokens remain associated with their rightful owner, rendering them valueless to potential loss.
