# 1.0 Introduction

<mark style="color:orange;">**Xend Finance so far**</mark>

Xend Finance has established itself as a notable presence in the DeFi space, evolving from a blockchain-based initiative, inspired by traditional credit unions, into a platform committed to merging traditional finance (TradFi) with decentralized finance (DeFi). This evolution signifies Xend Finance's dedication to using blockchain technology to make investment opportunities more accessible.

Since its inception, Xend Finance has developed a foundation of financial tools aimed at optimizing returns for its users. These tools included: yield aggregation, a fiat-to-crypto on/off ramp and multi-chain wallet functionality.&#x20;

This suite of services has laid the groundwork for a comprehensive ecosystem dedicated to financial inclusion and innovation.

The platform has distinguished itself with a user-friendly interface, a commitment to transparency, and a community-driven governance model.&#x20;

Th native token, XEND (currently RWA), with a maximum supply of 200 million tokens, is essential for the ecosystem's functionality and governance.

Despite years 2022 - 2023 have been difficult years for the broader blockchain/crypto space , Xend Finance experienced a year characterized by adoption. Transitioning from a "project" to a company, it has garnered real-world adoption of its banking platform, with over 150,000 savers using it to hedge against inflation and currency devaluation. This growth reflects the platform's success in creating a product that serves real-world needs.

So far the platform has been seeing continuous significant team growth and made rebranding efforts to better connect with its expanding user base under the vision of "Global Crypto Banking For Everyone."

Xend has expanded its reach into new markets, notably Ghana and Kenya, surpassing 150,000 users.

The introduction of XendBridge and SwitchWallet, among other tools, was aimed at integrating businesses into the blockchain economy, while launching a POS agent initiative facilitated broader adoption and ease of transactions.


# 1.1 Migration from XEND to RWA

Xend Finance has made a decision to rebrand its token from XEND to RWA, a marker of a significant pivot in its strategic vision, aligning with the evolving landscape of cryptocurrency projects and the tokenization of real-world assets.

This rebranding reflects a forward-looking approach to integrate the digital finance realm with tangible assets, embodying the vision for Xend V2's business model.&#x20;

The transition to RWA (Real World Asset) token underscores a commitment to bridging the cryptocurrencies and tokens with the broader world of assets.

As part of this strategic evolution, the RWA token will now natively be available on the Arbitrum One chain, in addition to its presence on major blockchain including

* Ethereum
* Binance Smart Chain
* Polygon

The detailed examination of the RWA token's data metrics and the structure of its on-chain ownership will be released in a separate report once the migration event concludes, which is after March 15, 2024.

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# 1.2 New Vision - Xend V2 and Xend V3

Xend Finance has formulated a new vision that is oriented towards building a comprehensive, functional, and fully compliant environment for documenting Assets on-chain existence, ownership and related transactions. This vision has been materialized as Xend V2 and Xend V3 - next 2 iterations of our products, architecture and organization development, driven by below principles and opportunities.

<figure><img src="/files/KrQlBxUdcSULkx3zOMja" alt=""><figcaption><p><em>- Xend Finance - new principles</em> </p></figcaption></figure>

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# 1.2.1 Principles overview

<mark style="color:orange;">**All Assets are Real**</mark>&#x20;

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**](/appendices/appendix-a-understanding-rwa) for a more detailed explanation of our understanding of real world assets).&#x20;

<mark style="color:orange;">**Real Assets Mean Real Identity**</mark>&#x20;

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.

<mark style="color:orange;">**Onchain Ownership Homogeneity**</mark>

OAE requires that all onboarded assets have full ownership coverage on Asset Chain. In cases of shared ownership over assets:&#x20;

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.&#x20;

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.

<mark style="color:orange;">**Harmonizing Web3 Standards With Legal Standards**</mark>

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&#x20;
3. Using tokens for digitalization of asset ownership-related rights&#x20;
4. Creating environments that recognizes and supports separation of existence, ownership, possession and holding constructs.&#x20;
5. Gradual expansion compliance synchronization of smart contracts and token types based on legally recognizable assets definitions and ownership or possession rights.&#x20;
6. Gradual synchronizing of adopted solutions with all existing regulatory frameworks.

<mark style="color:orange;">**Tokenizing Any Right to an Asset, Not Just Ownership**</mark>

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.

<mark style="color:orange;">**Holding is Not Owning**</mark>

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.

<mark style="color:orange;">**Protecting Ownership Instead of Further Limiting**</mark>&#x20;

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.&#x20;

<mark style="color:orange;">**Unity Over Fragmentation**</mark>

We will reduce fragmentation in digital finance and blockchain space by consolidating wide array of applications and features under following unified interfaces:&#x20;

* OAE  - On-chain assets environment, designed as a single unified framework and blockchain for tokenized real world assets issuance and management.&#x20;
* Xend Browser  - next evolution of OAE, consolidating entire Xend Framework and blockchain infrastructure under simple web browser software. &#x20;

<mark style="color:orange;">**Quantified credibility assessment of tokenized assets**</mark>

We will create a public platform for on-chain tokenized asset that provides full transparency on:&#x20;

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.&#x20;

<mark style="color:orange;">**Promoting assets legalization**</mark>&#x20;

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.&#x20;

<mark style="color:orange;">**Working with local partners to scale**</mark>&#x20;

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. &#x20;

<mark style="color:orange;">**Progressive regulatory adoption**</mark>

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.


# 1.2.2 Xend V2 & V3  - Roadmaps

Below table summarizes products and endeavors that Xend Finance will prioritize as part of its V2 and V3 development roadmaps.

| **Xend V2**                                                                                                                                                                      | **Xend V3**                                                                                                                                                                                                                                                                                                                                             |
| -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| <p>On-chain asset environment  (OAE)</p><ul><li>Xend Solutions</li><li>Xend Connect</li><li>AssetChain</li><li>GOR</li><li>Origin Studio</li><li>Social Hub</li></ul><p><br></p> | <p>Xend Browser</p><ul><li>One-4-all </li><li>NodeOs </li><li>SubNet</li><li>Explorer</li><li>Node enterprise</li><li>e-Admin</li><li>NodeBox </li></ul><p><br></p><p>Progressive Synchronization Campaign</p><ul><li>Formation of IAC councils</li><li>Public Asset Chains adoption</li><li>Public Subnets adoption </li><li>OAE marketplace</li></ul> |


# 1.2.3 Xend V2 Roadmap

#### Xend V2 Roadmap

<br>

<table data-header-hidden><thead><tr><th width="151"></th><th width="75"></th><th width="66"></th><th width="73"></th><th width="66"></th><th width="61"></th><th width="79"></th><th width="76"></th><th></th></tr></thead><tbody><tr><td><strong>Task</strong></td><td><strong>P1</strong></td><td><strong>P2</strong></td><td><strong>P3</strong></td><td><strong>P4</strong></td><td><strong>P5</strong></td><td><strong>P6</strong></td><td><strong>P7</strong></td><td><strong>P8</strong></td></tr><tr><td>Conceptual Design &#x26; Scope</td><td>x</td><td><br></td><td><br></td><td><br></td><td><br></td><td><br></td><td><br></td><td><br></td></tr><tr><td>Website redesign</td><td><br></td><td>x</td><td>x</td><td><br></td><td><br></td><td><br></td><td><br></td><td><br></td></tr><tr><td>Web-app design and ongoing development</td><td><br></td><td>x</td><td>x</td><td>x</td><td>x</td><td>x</td><td>x</td><td><br></td></tr><tr><td>Compliance &#x26; Partnership Framework</td><td><br></td><td>x</td><td>x</td><td>x</td><td>x</td><td>x</td><td>x</td><td>x</td></tr><tr><td>Technical Architecture &#x26; Prototyping</td><td><br></td><td><br></td><td>x</td><td>x</td><td><br></td><td><br></td><td><br></td><td><br></td></tr><tr><td>Development of AssetChain  &#x26; Testnet</td><td><br></td><td><br></td><td><br></td><td>x</td><td>x</td><td><br></td><td><br></td><td><br></td></tr><tr><td>Origin Studio &#x26; GOR Website Development</td><td><br></td><td><br></td><td><br></td><td><br></td><td>x</td><td>x</td><td><br></td><td><br></td></tr><tr><td>Wallet Integration &#x26; Beta Testing</td><td><br></td><td><br></td><td><br></td><td>x</td><td>x</td><td>x</td><td>x</td><td><br></td></tr><tr><td>Public Testnet Launch &#x26; Feedback</td><td><br></td><td><br></td><td><br></td><td><br></td><td><br></td><td><br></td><td>x</td><td>x</td></tr><tr><td>Mainnet Launch &#x26; Assets Onboarding</td><td><br></td><td><br></td><td><br></td><td><br></td><td><br></td><td><br></td><td><br></td><td>x</td></tr></tbody></table>


# 1.2.4 Xend V3 Roadmap

#### Xend V3 Roadmap

<table data-header-hidden><thead><tr><th width="169"></th><th width="79"></th><th width="78"></th><th width="74"></th><th width="67"></th><th width="63"></th><th width="74"></th><th width="67"></th><th></th></tr></thead><tbody><tr><td><strong>Task</strong></td><td><strong>P1</strong></td><td><strong>P2</strong></td><td><strong>P3</strong></td><td><strong>P4</strong></td><td><strong>P5</strong></td><td><strong>P6</strong></td><td><strong>P7</strong></td><td><strong>P8</strong></td></tr><tr><td>IAC Councils Formation</td><td>x</td><td>x</td><td>x</td><td>x</td><td>x</td><td>x</td><td>x</td><td>x</td></tr><tr><td>Beginning of Public Asset Chains Adoption </td><td><br></td><td>x</td><td>x</td><td>x</td><td>x</td><td>x</td><td>x</td><td>x</td></tr><tr><td>Xend Browser &#x26; NodeOS Integration</td><td><br></td><td>x</td><td>x</td><td>x</td><td>x</td><td><br></td><td><br></td><td><br></td></tr><tr><td>HybridWallet Deployment &#x26; Integration</td><td><br></td><td><br></td><td><br></td><td>x</td><td>x</td><td><br></td><td><br></td><td><br></td></tr><tr><td>OAE dApp Marketplace Launch</td><td><br></td><td><br></td><td><br></td><td><br></td><td>x</td><td>x</td><td><br></td><td><br></td></tr><tr><td>Global Expansion &#x26; Partnership Enhancements</td><td><br></td><td>x</td><td>x</td><td>x</td><td>x</td><td>x</td><td>x</td><td>x</td></tr><tr><td>Advanced Legalization Campaigns</td><td><br></td><td><br></td><td><br></td><td><br></td><td>x</td><td>x</td><td>x</td><td>x</td></tr><tr><td>Platform Ecosystem &#x26; Community Building</td><td>x</td><td>x</td><td>x</td><td>x</td><td>x</td><td>x</td><td>x</td><td>x</td></tr></tbody></table>


# 2.0 OAE - Onchain Assets Environment

The OAE framework is integral to the 'Xend V2' Roadmap and is designed to facilitate the onchain onboarding of any legally transactable asset types.


# 2.1 OAE Core Idea

The OAE framework is integral to the 'Xend V2' Roadmap and is designed to facilitate the onchain onboarding of any legally transactable asset types. It rests on several strategic pillars:

* <mark style="color:orange;">**7-in-1 Integration:**</mark> OAE merges seven platforms to manage the full lifecycle of assets, which includes:

1. <mark style="color:orange;">**Asset Chain:**</mark> A dedicated chain for tokenizing real-world assets, with an integrated layer for legal and factual event recording.
2. <mark style="color:orange;">**Origin Studio:**</mark> A platform for issuing and managing tokens, enabling the onboarding and tokenization of assets and associated rights.
3. <mark style="color:orange;">**Social Hub:**</mark> Connects token and asset owners with service providers like market makers, investors, authenticators, insurance, and compliance validators.
4. <mark style="color:orange;">**Xend Connect:**</mark> Links the AssetChain with OAE's components and external systems via data exchange oracles.
5. <mark style="color:orange;">**GOR (Global Ownership Register):**</mark> Allows for the creation of asset profiles on the RWA blockchain and tracks related transactions and events.
6. <mark style="color:orange;">**Xend Solutions:**</mark> A curated suite of Xend Finance offerings, including banking, exchanges (centralized and decentralized), fundraising platforms, wallets, and bridges for off/on-ramping and cross-chain transactions.
7. <mark style="color:orange;">**IAC:**</mark> Asset Authentication, Insurance, and Compliance Validation, being a structured cooperation framework for assets verifiable, quantified credibility, combined with proper mirroring of asset factual and legal state and events on blockchain.&#x20;

* <mark style="color:orange;">**Developing a Global Ownership Register (GOR):**</mark> Creating a unified social platform for asset profiles that includes an integrated transaction explorer.

* <mark style="color:orange;">**Event Mirroring in OAE:**</mark> The OAE and its AssetChain offer a system for capturing and reflecting legal and factual events concerning onboarded assets directly onto the AssetChain. This capability primarily leverages the structured IAC framework, encompassing Insurance, Authentication, and Compliance Validation. Key event types that can be recognized and mirrored on the AssetChain include:&#x20;

  * ownership transfer & limitations
  * physical losses or damages
  * insurance payouts
  * use of assets for collateral or mortgages
  * inheritance event
  * changes in physical location.

* **Assets as Smart Contracts:** Every asset added to the AssetChain is represented by its own smart contract, not a token. These contracts comply with the legal frameworks relevant to the asset's onboarding process, which can vary based on the asset type and the territory involved.

* **Rights as Tokens:** token standards serve as the on-chain embodiment of specific rights associated with an asset, not the asset itself.&#x20;

* **Universal Asset Environment:** OAE is designed to accommodate all legally transactable assets, covering both tangible and intangible categories.

* **IAC cooperation triangle:** - engagement of 3 core partners types, enabling Events Mirroring protocol and credibility assessment - Insurance Providers, Asset Authnethicators and Compliance Validators.&#x20;

* **Legal Binding and credibility score:** The OAE framework guarantees true asset ownership by employing verifiable legal binding, bypassing traditional legal wrapping. This involves smart contract administrators legally confirming that the asset's documentation in OAE accurately reflects its real-world status. Both administrators and owners must possess valid Xend IDs for verifiable identity at the time of onboarding. Legal binding is closely linked with asset insurance, authentication, and compliance - despite being optional, failing to establish a proper IAC event mirror policy drastically reduces the asset's credibility, as reflected on its public profile.

See the chart below for a summary of a high-level OAE organizational structure:

<figure><img src="/files/wFGFrFjVe5u6evcSRZsv" alt=""><figcaption><p>Pic. 2 - OAE pillars</p></figcaption></figure>

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# 2.2 OAE Framework

Below is a visual map of OAE framework:

<figure><img src="/files/Ygc1A00I77d2w4GwhfzO" alt=""><figcaption><p> - OAE framework overview</p></figcaption></figure>

<figure><img src="/files/ktu8zWKWATH6t9e2KVy8" alt=""><figcaption><p>OAE visual overview</p></figcaption></figure>


# 2.3 OAE  - Products Overview

The OAE consists of the following product stack:

* Asset Chain
* Origin Studio
* Social Hub
* Xend Connect
* GOR - Global Ownership Register
* Xend Solutions

We will describe them in the following sections.&#x20;


# 2.3.1 Asset Chain

The Asset Chain is an independent blockchain, utilizing a Proof of Stake (PoS) mechanism based RWA token.

In the first version  (Xend V2), nodes can participate and validate Asset Chain transactions through a dedicated PoS console. Moving to version 3 (Xend V3), the node operating system is integrated directly within the [Xend Browser](/3.0-xend-browser).

Assets are onboarded to the Asset Chain via Origin Studio as smart contracts with KYC-verified administrator assigned to that smart contract, linked with Xend ID.  Administration over the smart contract is functionally separated from asset ownership - please refer to the[ Asset Smart Contract Administration](/2.0-oae-onchain-assets-environment/2.8-assets-policy-in-oae/2.8.9-structured-asset-administration-policy) section of this paper for more details.&#x20;

Asset Chain introduces a variety of token standards, each tailored to the specific type of legal rights to the assets. For more details, please refer to [Assets as smart contracts, rights as tokens](/2.0-oae-onchain-assets-environment/2.8-assets-policy-in-oae/2.8.3-assets-as-smart-contracts-tokens-as-rights) section.&#x20;

Assets on the Asset Chain are bound by a verifiable legal binding policy. For further details, refer to the section on [Verifiable Legal Binding](/2.0-oae-onchain-assets-environment/2.8-assets-policy-in-oae/2.8.4-verifiable-legal-binding).

The primary wallet for the Asset Chain is the Xend OAE wallet, which supports native multi-signature setups. These&#x20;

multi-signature policies can be managed through the Origin Studio. For more details, please see [Xend Solutions](/2.0-oae-onchain-assets-environment/2.3-oae-products-overview/2.3.6-xend-solutions).

<figure><img src="/files/bOCico9XKwNmc7AQBMEL" alt=""><figcaption><p>- AssetChain - Assets and Tokens Onboarding</p></figcaption></figure>


# 2.3.2 Origin Studio

Origin studio allows users to quickly create smart contacts for any known assets types, and issue ownership tokens linked to these assets.  Studio contain several groups of features, which are as follows:&#x20;

* RWA tokenizer - allows users to register any type of asset as smart contract, via simple step-by-step procedure.  RWA tokenizers support migration of existing tokens from other blockchains to AssetChain.
* Playground - contains Sandbox for ‘fictional’ asset registration and token issuance, as well as ‘Simulator’ - allowing to parametrize and stress test hypothetical token launch scenarios within a simulated, AI environment, with simulated partners, community and interactions.&#x20;
* Token economy manager - contains a variety of features allowing to create and manage asset economy in real time, including vesting schedules, token holders,  liquidity management, tokens listings, rewards and airdrops campaigns, incentivisation campaigns and more.&#x20;
* Watchdog - Series of automated solutions related to smart contracts security, AML, fraud detection, abnormalities detection and more.&#x20;
* Compliance - series of solutions related to the management of compliance and contractual obligations, KYC, agreements, digital signatures and more.&#x20;
* Admin panels - panels dedicated for smart contact administrations, as well as dedicated corporations panels for involved partners - IAC, auditors, market makers, investors and more.

<figure><img src="/files/p8Q7IqI9THYMmVp76Gwg" alt=""><figcaption><p> - Origins Studio - Features</p></figcaption></figure>


# 2.3.3 Social Hub

The Social Hub is a specialized platform enabling service providers to showcase their profiles and services to those registering assets. It's designed to encourage real-time interaction and cooperation among various participants, including:

* Asset Authenticators, Compliance Validators, and Insurance Providers

* Market Makers and Investors

* Auditors

* Token Economy Designers

* Asset Owners aiming to list their assets on the AssetChain, including:&#x20;

  * Owners of legally recognized assets
  * Digital token owners seeking to convert their holdings into legally recognized assets

* Parties engaged in [OAE P2P lending engine](/2.0-oae-onchain-assets-environment/2.10-p2p-lending-in-oae):
  * Lenders and Borrowers
  * Appraisers and Custodians

<figure><img src="/files/KlRjTiCTySQIctxDfMhV" alt=""><figcaption><p> - OAE Social Hub</p></figcaption></figure>


# 2.3.4 Xend Connect

Xend Connect offers a dedicated environment within the OAE for cross-chain connectivity and data oracles. Key features include:

* Omni-Native Smart Contracts: Beyond creating smart contracts on the AssetChain, Xend Connect enables the native deployment of these contracts replicas across all relevant blockchains like Ethereum, Arbitrum, Polygon, and Solana, facilitating broader native interoperability
* Omni-Native Bridging: This feature allows asset owners to directly manage cross-chain transfers without third-party bridges. Assets can be burned on one chain and re-minted on another, with Xend Connect overseeing the accurate data exchange between blockchain pairs. Note: Certain asset types or token standards may be exclusive to the AssetChain.
* Event Mirror Designer: As part of the asset smart contract onboarding process, administrators are tasked with designing and implementing an event mirror oracle to cover asset authentication, insurance, and compliance validation. This tool is crucial for:
  * Calculating and disclosing an asset's credibility score based on the event mirroring policy.
  * Continually updating data on the asset's current physical status and legal standing.
  * Offering insights into any insurance-related asset events.

Xend Connect thus plays a vital role in enhancing asset mobility across blockchains while ensuring the integrity and credibility of asset data.

<figure><img src="/files/kuyj3WctoZ2bDq8bAbF5" alt=""><figcaption><p> - Xend Connect</p></figcaption></figure>


# 2.3.5 GOR

The Global Ownership Register (GOR) is a comprehensive web portal that functions as a hub for showcasing asset profiles. It’s a blend of CoinMarketCap and Etherscan approaches but with a unique twist. Key features include:

* Asset profile pages.
* Lists of all top token holders associated with an asset's smart contract.
* Records of transactions conducted by these token holders.
* Documentation of all events linked to the asset through the event mirror oracle.
* An asset's credibility score, reflecting its reliability and trustworthiness.
* Detailed views on the event mirroring policies adopted for authentication, insurance, and compliance validation.
* Reputation scores of IAC (Insurance, Authentication, Compliance) partners and records of insurance payout events.

From the user's perspective, GOR revolutionizes asset profile management by linking control over the asset smart contract with control over its public social profile.&#x20;

Asset profile is being set up and managed through Origin Studio, adhering to a standardized UX template to ensure consistency. This reverse approach to social profile custody provides a 180 degrees turn from how web3 tokens profiles have been managed so far.

<figure><img src="/files/lIXdYojWQz7d2kPOWxh7" alt=""><figcaption><p>  - GOR</p></figcaption></figure>

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# 2.3.6 Xend Solutions

The OAE framework is organizationally distinct from other solutions that need centralized management and ongoing development by the Xend Finance team. For a detailed list of functionally independent Xend Finance Solutions and their connection to OAE, please see the table below:

<table data-header-hidden><thead><tr><th width="285"></th><th></th><th></th></tr></thead><tbody><tr><td><strong>Solution</strong> </td><td><strong>Details</strong></td><td><strong>How and why solution is linked with OAE</strong></td></tr><tr><td>Banking layer</td><td>Xend Finance is in a process of active application for a banking license to offer banking services.</td><td><p>Securing a banking license will enable Xend Finance to</p><ul><li>set up independent on/off-ramp gates directly linked to AssetChain blockchain via Xend Connect, </li><li>support digital fiat currencies, </li><li>offer fiat accounts to Xend users. </li></ul><p>This in turn enables users to convert their stablecoins directly to digital fiat and make withdrawals to their bank accounts.</p></td></tr><tr><td>CeDeFI Exchange (Xend Exchange)</td><td>The CeDeFi Exchange blends centralized and decentralized trading elements, offering users the choice to utilize a traditional order book or tap into more liquid, decentralized pools. </td><td><p>OAE provides an end-to-end framework for asset onboarding, while the Xend CeDeFi Exchange facilitates their subsequent trading and monetization. </p><p><br>Users can seamlessly transfer funds between their non-custodial Xend Wallets and the custody-based Xend Exchange wallets via Xend Connect.</p></td></tr><tr><td>Xend Marketplace</td><td>A distinct platform similar to OpenSea, focusing on transactions involving non-liquid tokens like NFTs.</td><td>Given that OAE and AssetChain accommodate both liquid (divisible, fungible) and non-liquid (non-divisible, non-fungible) token standards, a specialized trading environment for NFTs is essential. Xend Marketplace integrates with OAE via Xend Connect.</td></tr><tr><td>RWA staking pool</td><td>A platform exclusively for RWA token holders, offering the opportunity to stake or lock their RWA tokens in return for a staking score.</td><td><p>Staking RWA tokens is necessary for operating an AssetChain node and participating in the validation of AssetChain transactions, rewarding validators with RWA. </p><p><br>Moreover, staking is a critical component in enhancing the reputations of IAC partners, Market Makers, Service Providers, and Investors, thereby influencing their rankings on the Social Hub. </p><p><br>The calculation of  user staking scores is facilitated by Xend Connect, which aggregates RWA tokens staked by all wallets assigned to a single Xend ID)</p></td></tr><tr><td>P2P credit platform</td><td><p>A dedicated platform developed on the OAE framework to enable direct peer-to-peer (P2P) lending, featuring auto-executable asset-based collateral. </p><p><br>OAE users can offer or request loans, with the terms secured by smart contracts that automatically execute collateral and loan repayments.</p></td><td><p>The AssetChain incorporates a specific token standard for collateral, which is generated by the asset's smart contract. </p><p><br>Establishing a P2P loan on OAE involves using Origin Studio to craft a self-executing loan agreement, detailing repayment conditions (such as amount, duration, and recipient wallet) and triggers for collateral liquidation</p><p></p></td></tr><tr><td>Fundraising &#x26; incubation hub</td><td><p>Leveraging the P2P platform, this hub facilitates co-crediting and fundraising with enhanced flexibility and security. Features include </p><ul><li>milestone-based payouts,</li><li>asset-based collateral for investors,</li><li>self-executable revenue participation agreements linked to a company's wallet and bank account.</li></ul><p><br></p></td><td><p>The hub often acts as a precursor to the issuance of specific assets on the AssetChain, typically leading to the onboarding of entities such as on-chain companies or equities/shares as smart contracts. </p><p><br>This process involves issuing various tokens through these contracts, including tokenized equity/shares, loans, revenue-share entitlements, and access tokens, thereby integrating closely with OAE's infrastructure and capabilities.</p><p></p></td></tr><tr><td>GOR platform</td><td><p>Although Xend Connect facilitates open access to AssetChain data, including smart contracts, tokens, and their transfers, an 'official' platform is necessary for structured data presentation. </p><p><br>The GOR (Global Onwership Register) platform, curated by the Xend Finance team, will offer free access to assets, tokens and transactions, akin to the models used by Coinmarketcap and Etherscan.</p><p><br></p></td><td>The GOR portal is directly integrated with the AssetChain through Xend Connect, serving as the formalized display layer for asset information within the OAE ecosystem.</td></tr><tr><td>PoS Node Console</td><td>A dedicated, downloadable operating system solution designed for setting up and configuring an AssetChain node.</td><td><p>This solution is integrated with the OAE ecosystem through Xend Connect, ensuring a secure link to verifiable KYC-verified identities and specific Xend Wallets, enabling seamless and secure node operation within the AssetChain.</p><p></p></td></tr><tr><td>Xend wallets</td><td><p>Xend OAE Wallet is an integral part of the AssetChain's architecture, enabling users to interact directly with the node-based environment rather than smart contracts layered above. This direct interaction ensures a closer connection with the blockchain's fundamental operations.</p><p><br>Xend Exchange Wallet operates as a custody wallet, allowing users to transfer funds from any external source. These funds are then converted into off-chain database records while under the exchange's custody, differentiating it from the blockchain-based OAE Wallet.</p><p><br>Xend ID serves as a 'meta' identifier managed by Xend Finance, compliant with data protection regulations. It enables the linkage of multiple wallets to a single user identity, simplifying user interaction across the ecosystem.</p><p></p></td><td><p>OAE Wallets are built into the AssetChain's foundational structure. Users can transfer funds from Xend OAE wallet to Xend Exchange Wallet, other external exchanges or wallets or different blockchains via OmniBridge.</p><p><br><br></p></td></tr><tr><td>Multisig wallets</td><td><p>Xend OAE wallets come with an integrated multisignature policy, enabling the creation of a 'layer2' wallet atop of multiple independent Xend OAE wallets, regardless of their association with the same or different Xend IDs. </p><p><br>Outbound transactions from multisig wallets need to receive approval from all co-creating wallets.</p><p></p></td><td><p>This feature is embedded directly within the base AssetChain blockchain infrastructure, offering an optional yet robust layer of security for the storage of tokens and the administration of smart contracts. </p><p><br>Multisignature wallets are especially recommended for managing assets and tokens of significant value, enhancing security and governance within the OAE ecosystem.</p></td></tr><tr><td>AI assistant</td><td><p>The AI Assistant layer is a GPT-like environment tailored for users across the OAE ecosystem, facilitating interaction with the Xend Ecosystem through conversational AI. </p><p><br>This tool enables users to execute commands and utilize features by simply conversing with an AI chatbot. Additionally, it allows for the design of complex, cross-environment workflows that can autonomously perform a series of actions across various platforms like Origin Studio, CeDeFi Exchange, P2P Lending Platform, and the AssetChain, based on specific sequences, timelines, or conditions. </p></td><td><p>The AI Assistant, once authorized, is capable of interacting with the OAE and the entire Xend Ecosystem. </p><p><br>This integration enhances user experience by simplifying navigation and action execution within the ecosystem, streamlining operations through advanced, AI-driven commands and workflows.</p></td></tr><tr><td>Off/on-ramp</td><td>Please refer to ‘Banking layer’ solution</td><td>Please refer to ‘Banking layer’ solution</td></tr><tr><td>Xend bridge</td><td><p>Built on the Xend Connect framework, Xend Bridge offers a trustless mechanism for transferring cryptocurrencies across different blockchains, employing a binary system where migrations are either completely processed or entirely rejected, eliminating partial transfers or custody-based intermediate holdings.</p><p></p><p>Xend Bridge supports two primary methods:</p><ul><li>Pegging/De-pegging: Ideal for existing tokens, stablecoins, and cryptocurrencies like BTC, ETH, USDC, etc.</li><li>Burning and Re-minting: Utilizes native smart contracts to burn tokens on the source chain and re-mint them on the target chain, a method exclusively available for omni-native tokens created via Origin Studio within the OAE framework.</li></ul></td><td>Xend Bridge is intricately linked to the Xend Connect ecosystem, leveraging a specialized data-exchange oracle for operations. With authorization from asset smart contract administrators, it can also engage its omni-native capability to facilitate direct cross-chain transfers by enabling the specific burning and re-minting functions, enhancing the fluidity and versatility of asset movement within the OAE framework.</td></tr></tbody></table>

<figure><img src="/files/29np0C0j1kEAfTDNQnFS" alt=""><figcaption><p>  - Xend Solutions</p></figcaption></figure>


# 2.4 Asset Smart Contract

Deploying asset smart contract on AssetChain&#x20;

The following workflow illustrates the user journey for onboarding any Tangible (physical) or Intangible (non-physical) asset as smart contract into the AssetChain.

<br>

<figure><img src="/files/mnIE99QIMWU5lEYjj7z6" alt=""><figcaption><p>- Asset onboarding on Xend </p></figcaption></figure>


# 2.5 IAC Framework

The IAC Triangle explains the connection of Insurance, Authenticators, and Compliance Validators to AssetChain.

<figure><img src="/files/ualA8OAsqWbFEtbyuCkm" alt=""><figcaption><p> - IAC triangle</p></figcaption></figure>


# 2.5.1 Importance Of IAC to OAE

#### <mark style="color:orange;">Importance of IAC to OAE</mark>

IAC stands for Insurance, Authenticators, and Compliance Validators, forming a crucial triad at the heart of the OAE framework. This collaboration underpins the digitalization and tokenization process, ensuring assets have a verifiable and quantifiable credibility score.

<mark style="color:orange;">**Key functions enabled by the IAC include:**</mark>

* Asset Authentication: Asset onboarders can appoint authentication service providers for one-off, on-demand, or ongoing verification of an asset's physical condition, existence, and status of digital or intellectual properties, and critical documents like financial reports or proof of reserves. Most often authentication will be provided by various auditors.&#x20;
* Self-Executable Insurance Policies: Implementation of automated insurance policies for token holders associated with an asset, enhancing security and trust.
* Legal Status Verification: Accurate, third-party verified information on an asset's legal standing, ensuring compliance and legality in the onboarding process and the issuance of specific ownership tokens.


# 2.5.2 (b) IAC in Practice

Users in Origin Studio can work with IAC partners through a specialized IAC admin panel by:

* Selecting and inviting preferred Authenticators, Insurance Providers, and Compliance Validators from the Social Hub to the IAC panel.
* Setting up desired event mirroring policies, data workflows, and actions for IAC partners.
* Finalizing the event mirroring policy for given assets&#x20;
* Securing budget for IAC partners fees on ESCROW account&#x20;

Outcomes of the event mirroring include:

* An asset credibility score.
* Authentication and compliance validation checkpoints.
* Detailed insurance policy information and related events.

<figure><img src="/files/0nEWwaabv9x2wSNOe4pt" alt=""><figcaption><p>  - IAC in practice</p></figcaption></figure>


# 2.6 Asset Credibility

The asset's credibility score is shaped by the event mirroring process and the reputation of the involved IAC partners.&#x20;

This score encompasses three independent assessments: **authenticity, compliance, and insurance rating.**

Each of these ratings undergoes a detailed comparison that includes:

* Theoretical Maximum: Measuring against the highest possible score achievable within the IAC system (with an exception to insurance rating)
* Global and Category Averages: Benchmarking against the average IAC rating of all assets registered on the OAE within the specific category.
* Ranking: Identifying the asset's specific standing within a global ranking of the IAC rating system.

IAC ratings are displayed on the asset's GOR profile page. Due to the distinct nature of each category, the ratings are presented **separately** and not combined into a singular final score.  This distinction acknowledges that an asset might exhibit high ratings in one category, while falling short in others.

| <p></p><p><mark style="color:orange;"><strong>Example 1:</strong></mark> </p><p>Let’s consider a real estate asset being onboarded to the OAE. An authenticator may visit the property, granting it a high authenticity score based on its physical presence. However, if it's discovered during compliance checks that the asset, including ownership rights, is being onboarded by a tenant without the owner's consent, the compliance score would be zero. This discrepancy highlights why averaging these scores would be misleading and potentially hazardous to OAE users, as it could obscure critical compliance issues.</p><p></p><p><mark style="color:orange;"><strong>Example 2:</strong></mark> </p><p>Imagine a vintage car being introduced to the Onchain Asset Environment. During the compliance validation process, it's found that all necessary legal and regulatory requirements are meticulously met. The car's paperwork is in perfect order, including its registration, insurance, and historical authenticity certificates. This thorough documentation leads to a high compliance validity score. </p><p></p><p>However, when an authenticator inspects the car for its authenticity, they discover discrepancies. Despite the car's paperwork indicating it as an original vintage model, detailed examination reveals several modern replacements and modifications not consistent with the vehicle's claimed era. These findings significantly undermine the car's authenticity score, as the physical evidence contradicts the historical claims made in the documentation.</p> |
| ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |


# 2.6.1 Authentication Rating

#### Authentication Checkpoint & Rating&#x20;

Authenticators report their findings through "authentication checkpoints" available on the asset's GOR profile. These reports include:

* **Downloadable Reports:** Comprehensive documents detailing the authentication process.
* **Overall Authenticity Rate:** A score between 0 and 100 assessing the asset's authenticity.
* **Rating Justification:** Explanations for any changes in the asset's rating, especially if the checkpoint has been conducted more than once.
* **Asset Location:** The current physical location of the asset, if relevant.
* **Existence Evidence:** Supporting material such as photos, videos, or LIDAR scans confirming the asset's existence, copies of authenticated obfuscated asset documentation etc.&#x20;

**Minus points:** In case of any restrictions, authenticators allocate ‘minus points' per each restriction, ranging from 1 to 100.  The total amount of minus points that can be granted is 100, if all are spent, it means the asset has received negative authentication (i.e. it has been deemed as not authentic).

The asset's final authenticity score is calculated based on the following methodology:&#x20;

1. Each authenticity rating provided by any authenticator that has ever provided such rating for a given asset is:&#x20;
   1. Multiplied by authenticator’s reputation score
   2. Multiplied by logarithmic function applying sequential \[n]% decrease of that rate for each day that have elapsed since that rating has been given
2. Authenticity ratings subjected to the above adjustment step, are then averaged to the final asset authenticity rate.&#x20;

The mathematical formulas for above process are as follows:

| <p>For each authenticity rating provided by an authenticator, we calculate a weighted score (<strong>Aws</strong>) as follows:</p><p></p><p><strong>Aws</strong>=Ar × (1−n)t</p><p></p><p>Where: </p><p></p><p><strong>Aws</strong> = Weighted authenticity rating from the single authenticator</p><p><strong>A</strong> = Rating (from 1 to 10) </p><p><strong>r</strong> = Authenticator's reputation </p><p><strong>n</strong> = time-elapse based logarithmic daily decrease rate (e.g. 0.25%) </p><p><strong>t</strong> = amount of days that have elapsed from rating submission </p><p></p><p>Then, to find the overall Asset Authenticity Rating (AAR), we average all the weighted ratings:</p><p></p><p><strong>AAR</strong> = ∑(Aws) / Total number of ratings</p><p></p> |
| ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |

\
Above method provides:&#x20;

1. Gradually decreasing reliability of ratings that have been made in the past, without sudden rating drop&#x20;
2. Providing higher strength of ratings from Authenticators with higher reputation, therefore promoting engagement of reliable Service Providers.&#x20;

The Xend team retains the flexibility to dynamically adjust the \[n]% decrease rate applied to the authenticity ratings over time. This adjustment capability allows for higher rates to be set for categories of assets deemed 'high risk,' where frequent and up-to-date authenticity checkpoints are crucial.


# 2.6.2 Compliance Rating

<mark style="color:orange;">**Compliance Checkpoint  & Rating**</mark>

Compliance validators publish compliance checkpoints to evaluate compliance validity of

* asset legal status&#x20;
* asset onchain onboarding

The actions executed within this checkpoint vary depending on the approach employed in asset [event mirroring policy](/2.0-oae-onchain-assets-environment/2.6-asset-credibility/2.6.4-events-mirroring).

As such:&#x20;

1. When legal status data is sourced either fully or in part from public or external private records, the established compliance checkpoints must encompass:

   1. Source Verification: Validation of the information source's reliability.
   2. Data Cross-Verification: A secondary review to confirm the data's accuracy.

2. If the compliance validator is responsible for manually inputting the legal status, the compliance checkpoint should include:

   1. Direct Data Entry: The manual input of legal status information.
   2. Automated Confirmation: Systematic verification of the data submitted.

3. If asset administrators updates the legal status on their own, manually, compliance checkpoint needs to include:&#x20;
   1. Data double check
   2. Data approval&#x20;

No matter the scenario, the compliance checkpoint consistently incorporates:

* **Compliance Status Indicator:** Determination of the asset's legal compliance and its on-chain onboarding through one of the options: Yes, No, or Yes - with restrictions.
* **Restrictions and Missing Data Overview:** A detailed account and justification of any noted compliance restrictions or constraints, along with an enumeration of data absent that is critical for complete compliance assessment.
* **Compliance Validity Rating:** An overall evaluation score reflecting the asset's compliance standing.

The compliance validity rating is assigned as follows:

* **0 Points:** Assigned to assets deemed non-compliant.
* **100 Points:** For assets fully compliant without any restrictions.
* **Between 0 to 100 Points:** Applies to assets where compliance is conditionally confirmed with certain restrictions.

**Minus points:** When identifying restrictions, compliance validators allocate ‘minus points' per each restriction, ranging from 1 to 100. The total amount of minus points that can be granted is 100, if all are spent, it means the asset and/or its on-chain onboarding has been deemed as fully non-compliant (e.g. ownership right tokens have been allocated to IDs that are not actual owners, or ownership homogeneity hasn’t been maintained).&#x20;

Compliance checkpoints and their ratings are accessible on the asset's GOR profile. Multiple compliance validators may participate, each contributing an independent rating. These ratings are adjusted by the validator's reputation score and decrease over time due to elapsed days, similar to the process for authenticity ratings.

For each compliance rating provided by an compliance validator, we calculate a weighted score (**Cws**) as follows:

| <p></p><p><strong>Cws</strong>=Cr × (1−n)t</p><p></p><p>Where: </p><p></p><p><strong>Cws</strong> = Weighted compliance rating from the single validator</p><p><strong>A</strong> = Rating (from 1 to 10) </p><p><strong>r</strong> = Validator’s reputation </p><p><strong>n</strong> = time-elapse based logarithmic daily decrease rate (e.g. 0.25%) </p><p><strong>t</strong> = amount of days that have elapsed from rating submission </p><p><br>Then, to find the overall Asset Compliance Validity Rating (<strong>ACR</strong>), we average all the weighted ratings:</p><p></p><p><strong>ACR</strong> = ∑(Cws) / Total number of ratings</p><p></p> |
| -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |

Similarly to authentication rating, compliance validity rate provides possibility for dynamic adjustment of n variables, and ensures that the value of such ratings decrease over time, naturally pushing for eventual re-validation.

\ <br>


# 2.6.3 Asset Insurance Rating

<mark style="color:orange;">**Asset Insurance Policy & Rating**</mark>&#x20;

Insurance providers collaborate with asset administrators to establish digital, self-executing contracts. These agreements automate coverage payouts to holders of digital, tokenized rights associated with the onboarded asset.

<mark style="color:orange;">**Agreement Specifications:**</mark>

* **Covered Rights:** Specifies the types of token standards eligible for coverage.
* **Payout Triggers:** Outlines the conditions under which insurance payouts are initiated, including both automated and manual triggers.
* **Insurance Sum:** Defines the total coverage amount.
* **Premium Sizes:** Details the cost of insurance premiums.

Insurance Rating Criteria:

The insurance rating evaluates the security and reliability of the asset's insurance coverage based on:

* **Coverage Ratio:** The proportion of the insurance sum to the asset's market value.
* **Event Frequency:** The regularity of insurance-triggering events.
* **Payout Sum:** The aggregate of insurance payouts made.
* **Claimant Count:** The number of token holders who have successfully claimed insurance.
* **Recent Claim Amounts:** The average weighted sum of successful claims over the past week, month, and year.
* **Risk Rating:** The insurance risk rating assigned by the provider.
* **Additional Metrics:** Various detailed metrics instrumental in determining the final insurance rating.

**Rating Scale:**

* A score of **0** indicates the absence of insurance coverage.
* A score of **100** represents full market value coverage, no occurrence of insurance events, and the lowest insurance risk rating. Hence if insurance providers state high insurance risk or insurance events occur frequently, having 1:1 coverage will not be sufficient to gain 100 points.&#x20;

<mark style="color:orange;">**Rating Calculation:**</mark>

The insurance rating is multiplied by the insurance provider's reputation score. When multiple providers are involved, their ratings are added together, not averaged. This approach permits the possibility of **'over-insurance'** of an asset on the OAE platform, enhancing its perceived reliability.&#x20;

However, it's important to note that the **cumulative payout from all insurance providers cannot surpass the asset's market value**. This safeguard prevents the potential exploitation of insurance mechanisms, where profit could be sought from deliberately triggering insurance events.

In the context of an Asset GOR profile, the insurance rating is not benchmarked against a theoretical maximum (which in this case would mean achieving coverage from all insurance providers within the IAC system for the asset's full market value). However, other evaluative methods, such as positioning within a ranking and comparisons against average values, remain relevant and are applied.&#x20;

It’s important to note that for comparison perspective, the size of insurance sum is irrelevant - what matters is what % of assets’ market value is covered by the insurance, combined with insurance risk rate and frequency of insurance events.


# 2.6.4 Events Mirroring

OAE is the first solution that properly defines and structures events mirroring policy (i.e. replication of facts and legal status updates related to assets on blockchain layer) in a transparent manner.&#x20;

OAE event mirroring is a policy is based on created so-called **‘event mirror’** - oracle that brings the factual, legal and insurance data related to the asset from outside word into AssetChain blockchain and OAE framework.&#x20;

Creating an event mirror is always optional, however if skipped, the credibility rating of such OAES assets would be equal to 0 and red-flagged.  For more details on why creating a proper event mirror is important please refer to the [IAC framework](/2.0-oae-onchain-assets-environment/2.5-iac-framework) and [Asset Credibility](/2.0-oae-onchain-assets-environment/2.6-asset-credibility) sections.&#x20;

Event mirrors can be created (or modified) as part of the asset onboarding or at any time after onboarding (under proper authorization to do so as per [Structured Asset Administration policy](/2.0-oae-onchain-assets-environment/2.8-assets-policy-in-oae/2.8.9-structured-asset-administration-policy)).&#x20;

Asset administrator works with the [IAC partners](/2.0-oae-onchain-assets-environment/2.7-iac-partners) when deploying event mirror, specifically&#x20;

* IAC partners need to sign off the procedure elements that will involve their actions, involvement and approval
* Administrator needs to sign-off payments and/or secure budget for future payments for IAC partners involvement

From technical standpoints all event mirrors are deployed to Xend Connect, which handles the communication between AssetChain and external data environments, users do not need to set up their own data oracles to create event mirrors.&#x20;

In Xend V2, the event mirroring process operates in a **unidirectional** manner, utilizing the IAC framework to facilitate the integration of off-chain data into the OAE, Asset Chain, and GOR systems. This setup primarily supports the importation and application of external data within the blockchain environment.

Indirectly, the system encourages administrators to keep replicating blockchain events reversibly within off-chain and factual realms. If changes on the AssetChain are not mirrored in the physical real-world (e.g. change of location) or in off-chain legal or factual status, subsequent event mirror updates will identify this mismatch, leading to a reduction in the asset's credibility score. Suspending the event mirror can't be used as an effective bypass of that mechanics due to progressive time-elapse based decrease of the credibility score, naturally pushing for periodical status updates.&#x20;

\
Xend V3 will implement a **bi-directional** event mirroring capability. This enhancement will allow for blockchain operations to be automatically updated in the real world, eliminating the need for manual intervention by asset administrators. This advancement promises a more seamless and efficient synchronization between blockchain activities and their real-world counterparts, streamlining the management and updating process of digital assets.

\ <br>


# 2.6.5 Visual Summary

#### <mark style="color:orange;">Visual Summary  - Asset Credibility Mechanics</mark>

Below is a visual summary of how asset credibility mechanic works :-&#x20;

<figure><img src="/files/tOhh0LdmkqH6NqH11Nhm" alt=""><figcaption><p> - IAC triangle</p></figcaption></figure>


# 2.7 IAC Partners

In Xend V2, a single open global environment exists for IAC partners, giving asset administrators the flexibility to choose their authenticators, insurance providers, and compliance validators from all over the globe.


# 2.7.1 IAC Provider

#### <mark style="color:orange;">IAC Provider Account & Reputation Engine</mark>&#x20;

In Xend V2, a single open global environment exists for IAC partners, giving asset administrators the flexibility to choose their authenticators, insurance providers, and compliance validators from all over the globe.&#x20;

All authenticators, insurance providers, and compliance validators are part of the [OAE Social Hub](/2.0-oae-onchain-assets-environment/2.3-oae-products-overview/2.3.3-social-hub), where they can set up their profiles, outline their services, highlight their operational territories, and actively connect with prospective clients.

| NOTE: While a single company may offer a combination of authentication, insurance, and validation services, it's important to note that selecting the same provider for different ratings to influence an asset's credibility is not permitted. This policy ensures the integrity and impartiality of the asset evaluation process in the OAE. |
| ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |

\
To create an IAC account, users must first achieve a minimum RWA staking score. For more details, please see the RWA token economy document.

Upon opening their account, IAC providers can enhance their reputation by:

* Completing account setup and verification tasks.
* Securing additional liability insurance for their operations (by signing off insurance smart contract with OAE insurance providers)
* Increasing their RWA staking score.
* Delivering IAC services.
* Boosting the total TVL (Total Value Locked) of authenticated, insured, or validated assets.

<figure><img src="/files/lL0R0X4LWY7xvdYcQv5H" alt=""><figcaption><p>-  IAC Reputation score</p></figcaption></figure>


# 2.7.2 Conflict Resolution Process

In the event of a disagreement concerning service delivery or quality between an asset administrator and an IAC partner, the asset admin is entitled to secure a predetermined amount of RWA collateral and seek intervention from the Xend Finance Team for resolving the dispute.

Should the claim be substantiated, the collateral is refunded to the onboarder along with a bonus ranging from 10-100%, derived from the RWA tokens staked by the IAC provider. If the claim is deemed unjustified, then 10-100% of the collateral is confiscated.

\
Additionally, if the services rendered by compliance validators or authenticators cause any financial damages to token holders or asset onboarders, they are permitted to submit an official complaint to the insurance provider that offered liability insurance coverage for these parties.&#x20;

The ensuing payouts and procedures are handled directly by the respective insurance providers and are recorded within the OAE system as significant insurance events that could influence the asset's credibility score.

<br>

<figure><img src="/files/Qff7FYjM1FU1EMtDskqI" alt=""><figcaption><p>-  Conflicts resolution between Asset Admins and IAC providers</p></figcaption></figure>


# 2.7.3 I - AC Interdependence

#### <mark style="color:orange;">I -AC Interdependence And Regress Claims</mark>

The term "I-AC interdependence" describes the crucial relationship between insurance providers, asset authenticators, and compliance validators. Here’s how it works:

1. The asset administrator must then issue a legally binding declaration of trust. This confirms that the asset's status, as recorded on the blockchain, accurately reflects its real-world factual and legal condition.
2. That declaration can be supported with proper  authentication and compliance verification processes, which boosts the asset credibility, otherwise such a declaration will still be valid, but without any credibility attached to it.&#x20;
3. Issued assets can be connected with insurance policy - before it’s finalized, insurers calculate an insurance risk score.
4. This score hinges on the outcomes from asset authentication and compliance verification processes, in case they are missing, insurance cost would be either extremely high (due to high risk) or wouldn’t be issued at all (further decreasing credibility of trust declaration issued for the asset)
5. In case insurance is issued, and this declaration is breached—whether through intentional wrongdoing, negligence, or uncontrollable circumstances - the insurance provider is obligated to compensate any affected parties in the asset chain for their losses caused by the breach of trust.
6. Subsequently, the insurance provider may seek compensation (a regress claim) from any party whose actions led to the insurance event. This includes the asset administrator, the owner (if the administrator acted in good faith based on inaccurate information from the owner), the authenticator, or the compliance validator. The process for pursuing these regress claims will take place outside the OAE framework.
7. Insurance companies offer liability insurance to both Authenticators and Compliance Providers. While arranging this insurance doesn't necessarily need to happen via OAE, leveraging it for formalizing and disclosing the insurance through smart contracts (termed A-I for Authenticators and C-I for Compliance Providers) enhances the reputability of these service providers. This increase in trustworthiness, in turn, makes them more competitive and attractive as providers in their respective fields.
8. If Authenticators or Compliance Validators decide to arrange their liability insurance through OAE, the reputation score of the Insurance Provider they’ve selected will impact their own reputation score.&#x20;

<figure><img src="/files/tyjyYo6JGXpSuphDz1QC" alt=""><figcaption><p>-  Conflicts resolution between Asset Admins and IAC providers</p></figcaption></figure>


# 2.8 Assets Policy in OAE

A fundamental objective of OAE is to align Web3 standards with legal norms, fostering an understanding of the legal nature of tokens. It's essential to recognize that both fungible tokens and non-fungible tokens (NFTs) function as **digital manifestations of 'rights'** rather than direct representations of tangible assets. This distinction is critical for their role in the digital economy.


# 2.8.1 Web3 Token Issues

A fundamental objective of OAE is to align Web3 standards with legal norms, fostering an understanding of the legal nature of tokens. It's essential to recognize that both fungible tokens and non-fungible tokens (NFTs) function as digital manifestations of 'rights' rather than direct representations of tangible assets. This distinction is critical for their role in the digital economy.

| NOTE:  When you hold the fungible or non-fungible token, it’s hard to tell what you actually hold, but in most cases, you’ve been led to believe that there will be some monetary value or profit attached to it - sadly most token issuers made this promises illegally, resulting in issuance of unauthorized securities or equities. |
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The rights associated with a particular token typically hinge on the intentions set forth by the issuer, whether a company, group, or individual, or the product linked to the token. Often, these intentions imply the potential for future profit through formation of a liquidity market, where tokens can be exchanged for stablecoins and, subsequently, fiat currency.

This model has propelled the DEFI economy for the last 4 years. However, we argue that it should be discontinued due to its misalignment with global standards and legal frameworks concerning ownership and financial industry. For a deeper analysis of our stance and forecasts on the evolution of this model, please see [Appendix C: Rise of AssetChains and its associated theses](/appendices/appendix-c-rise-of-assetchains).

Understanding tokens as 'rights to something' rather than tangible assets necessitates recognizing limitations and inherent risks related to web3 tokens.&#x20;

* Fungible Tokens: May represent a collective right to partake in the governance of a smart contract or a share in future profits. Possession of such a token equates to owning that specific right, which however is not subjected to any legal framework, and can be freely adjusted based on the will of individual, company or the group that controls smart contract based on which token have been issued.&#x20;
* Non-Fungible Tokens (NFTs): can carry unique metadata, including access credentials, embedded tokens, or links to digital content. It's crucial to underline that NFTs, unless explicitly recognized as symbols of ownership over specific assets, primarily signify ownership rights to the token itself.&#x20;

This distinction means that "owning" an NFT equates to holding a particular association with some digital data linked to that NFT, rather than possessing the digital content outright. For example, countless NFTs might feature the digital image of the Mona Lisa. The creation of an NFT with this image doesn't grant ownership rights to the artwork itself; it simply denotes control over the token that represents this digital image. In this context, NFTs function similarly to JPG files, which can be shared via email or messaging platforms.&#x20;

The key difference with NFTs is their transfer mechanism on the blockchain, which reassigns the current "holder" of the token. This process is akin to changing the owner of a file on a cloud storage service, but it doesn't confer exclusive ownership of the digital content or prevent the existence of numerous copies elsewhere.


# 2.8.2 AssetChain 10 Cardinal Rules

In line with the above, OAE and AssetChain are introducing a new, legally harmonized infrastructure of digital tokens, with a clear framework for digitization of assets, ownership and other assets related rights. This framework is based on ‘10 AssetChain cardinal rules’ as listed below: &#x20;

| <p><strong>RULE 1</strong></p><p>Smart contract  is digital representation of an asset</p><p></p><p><strong>RULE 2</strong> </p><p>Token standard is digital definition of specific legally recognized right </p><p></p><p><strong>RULE 3</strong></p><p>Token sub standard is digital definition of specific legally recognizable limitation of the right</p><p></p><p><strong>RULE 4</strong> </p><p>Token is digital representation of specific right, based on specific token standard and sub-standard</p><p></p><p><strong>RULE 5</strong> </p><p>Not every asset right is transferable</p><p></p><p><strong>RULE 6</strong> </p><p>Not every asset right is is bearer right</p><p></p><p><strong>RULE 7</strong> </p><p>Not every asset  right is ownership right</p><p></p><p><strong>RULE 8</strong></p><p>Asset right can held by more than one person</p><p></p><p><strong>RULE 9</strong></p><p>Asset right can held by more than one person</p><p></p><p><strong>RULE 10</strong></p><p>Fractionalization of asset rights does not mean equal divisions</p> |
| ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |

**RULE 1: Smart Contract as Digital Representation of an Asset**

This rule establishes that a smart contract on the blockchain serves as the digital counterpart of a physical or intangible asset. It codifies the characteristics, ownership, and other pertinent details of the asset into a programmable format that can be automatically enforced without intermediaries.

**RULE 2: Token Standard as Digital Definition of Specific Legally Recognized Right**

A token standard defines the structure and functionality of tokens to ensure they represent legally recognized rights consistently and interoperably across the digital ecosystem. This could include rights such as ownership, usage, or revenue sharing.

**RULE 3: Token Sub-standard as Digital Definition of Specific Legally Recognizable Limitation of the Right**

Token sub-standards introduce nuances to the rights defined by token standards, specifying limitations or conditions under which these rights apply. This allows for greater flexibility and precision in representing complex legal relationships in digital form.

**RULE 4: Token as Digital Representation of Specific Right**

This rule clarifies that tokens are not just digital objects but represent specific rights, such as ownership or access, as defined by their respective standards and sub-standards. This precise definition ensures clarity in what holding a token actually means.

**RULE 5: Not Every Right is Transferable**

Acknowledging that certain rights (e.g., personal privileges) cannot be transferred to others. This rule respects the legal nature of specific rights, ensuring that the digital representation adheres to these limitations.

\
**RULE 6: Not Every Asset Right is Bearer Right**

Bearer rights are those that belong to whoever holds the token at any given time. This rule states that not all digital rights function this way; some may be tied to specific individuals or entities regardless of token possession.

**RULE 7: Not Every Right is Ownership Right**

This distinction recognizes that tokens can represent a variety of rights beyond ownership, such as usage rights, licensing, or voting rights within a governance structure, expanding the utility and application of tokens.

**RULE 8: Asset Rights Can Be Owned, and Can Become Independent Assets**

Rights themselves can be considered assets, with intrinsic value and the potential to be owned, traded, or leveraged. This principle allows for the creation of a new class of digital assets based solely on rights.

**RULE 9: Asset Rights Can Be Held by More Than One Person**

Reflecting legal concepts like joint ownership or shared rights, this rule allows digital tokens to represent co-owned rights or assets, accommodating complex ownership structures.

**RULE 10: Fractionalization of Asset Rights Does Not Mean Equal Divisions**

The division of rights into smaller, fractional interests does not imply these fractions are equal or identical. This rule allows for the nuanced and proportional division of rights, reflecting the diversity of stakeholder interests and contributions.

Together, these rules provide a comprehensive legal framework for AssetChain digital tokens, addressing the nuances of asset representation, rights, and ownership in the digital domain.

\ <br>


# 2.8.3 Assets As Smart Contracts, Tokens As Rights

The table below illustrates how AssetChain utilizes smart contracts and tokens to differentiate between assets and the rights associated with them.

| **Assets as smart contracts**                                                                                                                                                                                                                                                                  | **Tokens as rights**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| <p></p><ul><li>Land</li><li>Real estate</li><li>Movable property</li><li>Digital property</li><li>Intellectual property</li><li>Money, Cash</li><li>Financial instruments</li><li>Receivables</li><li>Shares, equities</li><li>Entities</li><li>Other transactable assets</li></ul><p><br></p> | <p><br>Token standards</p><ul><li>Singular ownership</li><li>Partial unit-based ownership</li><li>Joint ownership </li><li>Usufruct</li><li>Easement</li><li>Pledge</li><li>Right to the Premises</li><li>Mortgage</li><li>Collateral </li><li>Possession Rights</li><li>Leasing Rights</li><li>Licensing Rights</li><li>Other Rights</li></ul><p>Token sub-standards</p><ul><li>Resolutive and Suspending Conditions </li><li>Bearer or Identity Association </li><li>Event Triggers</li><li>Conditions </li><li>Other Legally Recognized Variables and Parameters </li></ul><p><br></p> |

<figure><img src="/files/1Qvk6aES56YUhcbh91ex" alt=""><figcaption><p>- AC 10 cardinal rules, assets and rights</p></figcaption></figure>


# 2.8.4 Verifiable Legal Binding

In developing the OAE framework, we've opted against the traditional method of legal wrapping  - where asset ownership is transferred to a dedicated entity (like a trust), and tokenized shares are issued against it. Our approach maintains direct ownership with the asset owner, leveraging a structure of verifiable legal binding.

<mark style="color:orange;">Legal Binding Explained:</mark>

* KYC and pledge:   When an asset's smart contract is established, the administrator of the contract legally pledges to accurately represent the asset's factual and legal status, assuming responsibility under both contractual and criminal liabilities. This commitment is tied to the asset owner's KYC-verified identity and is encoded within the smart contract.
* Fraud Detection:  To reduce the potential for fraud, each asset that comes on board must establish an event mirror oracle policy. This outlines how authentication, compliance validation, and insurance procedures will be conducted for the asset. It plays a crucial role in determining the asset's credibility score.
* Insurance Coverage: Actions or events occurring outside the OAE ecosystem, which might lead to losses for asset token holders, are safeguarded by insurance providers. This ensures that investors are protected against unforeseen circumstances affecting their holdings.

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For more details please refer to[ I - AC interdependence and regress claims ](/2.0-oae-onchain-assets-environment/2.7-iac-partners/2.7.3-i-ac-interdependence)section


# 2.8.5 Intrinsic Legalization

The AssetChain infrastructure, supported by OAE and the involvement of IAC, ensures that onboarding assets (whether tangible, non-tangible, or standalone blockchain tokens recognized as digital assets) - results in their intrinsic legalization. This process includes:

* Associating each onboarded asset with a legally recognized asset definition.
* Linking tokens related to these smart contracts with specific token standards and substandards that reflect legal definitions of asset-related rights beyond mere ownership.
* Involving compliance validators who are required to confirm the legality of the asset onboarding and tokenization processes (if they are not involved, the compliance credibility of the asset is zero, which might differ people from buying any tokens related to it).&#x20;

This framework eliminates the issuance of tokens based on vague or indirect promises about their future value or profit. In OAE, token issuers must clearly define the rights represented by the tokens (using legal classifications) and the specific assets to which they are connected. This approach effectively closes the gray area previously exploited.

\ <br>


# 2.8.6 Multi-Level Asset & Token Structures

OAE facilitates multi-level asset and token structures. This framework allows tokens representing transferable rights to be re-digitized as assets (unless re-onboarding and further division has been disabled for specific tokens at a smart contract level). These re-digitized assets can then be linked to new tokens, and this process can be iterated indefinitely.

| <p><strong>Example 1:</strong> John registers his company, ABC LTD, on AssetChain, holding a 51% controlling equity share, with two associates, Andrew and Matthew, holding 24% and 25% equity shares, respectively. As the smart contract administrator, John creates three NFT ownership tokens corresponding to these shares, which can be transferred fully or partially without restrictions. Matthew chooses to further fractionalize his 25% share into 1 million co-ownership units. To achieve this, he re-registers his NFT on AssetChain as a new smart contract and issues either 1 million fungible tokens or a series of 1 million NFTs, depending on whether he wants each unit to be indivisible.</p><p><br></p><p><strong>Example 2:</strong> Andrew decides to secure a loan using his 24% equity share as collateral. To facilitate this through AssetChain, he follows the same process as Matthew by re-registering his NFT share as a new smart contract. Upon completion, the lender receives an NFT representing the collateral right on Andrew's equity share. This NFT is automatically removed from Andrew's wallet and nullified once he repays the specified amount of tokens to a designated wallet address.</p><p><br></p> |
| --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |

This structure supports intricate asset and ownership models, offering flexibility and scalability for digital asset management on the blockchain.

<figure><img src="/files/CNHt9cJD10XIQHES910z" alt=""><figcaption><p>- AC 10 cardinal rules, assets and rights</p></figcaption></figure>


# 2.8.7 Token Bonding

In OAE, a single token can represent a right that inherently restricts another right, such as in cases of mortgages or collaterals, which serve as specific limitations on ownership rights. To effectively manage this interplay between rights, OAE allows tokens to be 'bonded'. This involves defining—and where necessary, parameterizing—the relationship between these rights at the smart contract level before a token that influences another tokenized right can be minted.

This procedure is known as token bonding and is primarily applied to scenarios involving:

* Limited ownership rights,
* Mortgages and collaterals,
* The relationship between ownership and possession (further details provided in the subsequent section).

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The capability for token bonding is integrated into the foundational infrastructure of AssetChain (Please refer to [AssetChain - 4 execution levels ](/2.0-oae-onchain-assets-environment/2.8-assets-policy-in-oae/2.8.2-assetchain-10-cardinal-rules)for more details).


# 2.8.8 Separating Ownership, Possession And Holding

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.<br>

<mark style="color:orange;">**Ownership, possession & OP bond**</mark>

\
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 [token bond](/2.0-oae-onchain-assets-environment/2.8-assets-policy-in-oae/2.8.7-token-bonding) 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)

<mark style="color:orange;">**Holding**</mark>

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.&#x20;
* **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.

<br>

<figure><img src="/files/D7EPJIJtzMTPLaIxXonh" alt=""><figcaption><p>- AC 10 cardinal rules, assets and rights</p></figcaption></figure>


# 2.8.9 Structured Asset Administration Policy

In the OAE framework, administration over Asset SC can be assigned to any account with a valid Xend ID. While the administrator can also be the asset owner, it's not a mandatory requirement.

**Mandatory Ownership Coverage**

Upon deploying an asset smart contract to OAE, the administrator must

* Mint tokens representing 100% ownership to the asset
* Allocate all these tokens to specific owners&#x20;

Administrators can also mint and allocate other tokens, however this is not obligatory for assets to be onboarded.  Once ownership tokens are assigned to wallets, administrators can also parametrize any further redistribution rules of these tokens (e.g. vesting).&#x20;

<br>

| IMPORTANT NOTE:  In case of designing and parametrizing vesting of any tokens to the assets (i.e. gradual transfer from one wallet to another based on distribution rules). Asset needs to be onboarded to OAE first, meaning that ownership tokens to that asset are first allocated to the origin owner, and then re-distributed (vested) to subsequent owners. |
| ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |

**Reassignment Policy**

Majority owners can always reassign administrative rights to another Xend ID, which takes effect once the new administrator accepts the role. This process automatically suspends the current administrator's rights.

**Internal Policy**&#x20;

Each smart contract is equipped with an internal policy that specifies which operations&#x20;

* Operations that require majority ownership approval&#x20;
* Operations that may be independently managed by the administrator.

<figure><img src="/files/WKPDLz1oQPIDlU9FeOS8" alt=""><figcaption><p> - Asset ownership vs administration</p></figcaption></figure>


# 2.9 AssetChain - 4 Execution Levels

The AssetChain design enables scalable legal harmonization.  This means the capacity for expansion, and update of:&#x20;

1. Asset smart contacts types
2. Token standards for asset rights
3. Token substandards for asset rights limitations

In traditional blockchain, changing standards related to smart contracts or tokens would mean the necessity to upgrade the entire blockchain and ask nodes to move from one consensus protocol to another.

In OAE Asset Chain, this can be obtained without interfering with base infrastructure, thanks to introducing a 4-tiered **execution stack**  as per the table below.

| **Level** | **Layer**                                          | **Description**                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| --------- | -------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |
| 1         | Blockchain                                         | <p>This foundational level operates at the core of the AssetChain, managed by decentralized nodes. It governs the primary blockchain setup and includes the wallets as part of its infrastructure. </p><p><br></p><p>Level 1 dictates the master policy on </p><ul><li>tokens transfer </li><li>wallets interactions</li><li>Token bonds and OP bond </li><li>onboarding rules</li></ul><p><br></p><p>Events from level 1 can be triggered by any upper layer. </p><p><br></p> |
| 2         | Asset Smart Contract (SC)                          | <p>Situated above the blockchain layer, this level deals with the logic specific to digitalized asset existence and interactions / events it can initiate or be subjected to, as well as minting token rights related to it. </p><p><br></p>                                                                                                                                                                                                                                   |
| 3         | Tokenized Rights to the Asset (Token)              | This level concerns the typology of tokenizable rights, and their possible limitations, expresses as token sub-standards                                                                                                                                                                                                                                                                                                                                                       |
| 4         | <p>Data Exchange Oracles </p><p>(Xend Connect)</p> | <p>The topmost layer facilitates external data exchanges, acting as bridges between the AssetChain and real-world information or other blockchains, as well as communication bridge between specific AssetChain levels. </p><p><br></p>                                                                                                                                                                                                                                        |

<figure><img src="/files/IUV8iS4yWgL1K6RGaKqS" alt=""><figcaption><p> - AssetChain levels</p></figcaption></figure>


# 2.10 P2P Lending In OAE

Xend Finance's peer-to-peer (P2P) lending platform provides a specialized environment designed to streamline the process of Loan Request, Loan Proposals and Escrow Loan Agreements.


# 2.10.1 Basics of P2P lending

Xend Finance's peer-to-peer (P2P) lending platform provides a specialized environment designed to streamline the process of:

* **Loan Requests:** Users can articulate their borrowing needs, detailing the desired loan amounts and terms, or lookup current loan offers.&#x20;
* **Loan Proposals:** Potential lenders have the opportunity to present loan offers, specifying their terms and conditions, or lookup current loan requests.&#x20;
* **ESCROW Loan Agreements:** Utilizing the Origin code snippet, the platform ensures the secure signing of loan agreements. Key features of these agreements include:
  * Securing loans with digital assets as collateral.
  * Establishing explicit conditions for the repayment of loans.
  * Incorporating automated mechanisms for the liquidation of collateral under predetermined conditions.

The process for creating a Loan Agreement within the OAE and AssetChain Framework is structured as follows:

1. **Creation of the First Token Bond - The Loan**

A "Money Ownership Right Token" is bonded with a "Money Possession Right Token." The possession token is then transferred to the borrower, signifying the loan disbursement.

2. **Creation of the Second Token Bond - The Collateral**

An "Ownership Right Token"  pledged as collateral is bonded with a "Collateral Ownership Right Token." This collateral token is forwarded to the lender, securing the loan.

3. **Bond Specification**

The terms of the loan agreement, including the loan conditions, applicable legal framework for the assets involved, event triggers, repayment policies, and liquidation terms, are collaboratively determined by the involved parties. Following this, both smart contracts (money AS and the assets SC) are updated to reflect these detailed specifications accurately.

<br>

| <p><strong>Example:</strong> Alice uses Xend Finance's P2P lending platform to take out a $10,000 loan from Bob, offering her digital artwork as collateral. When Alice posts her loan request, she specifies the loan amount and terms. Bob, seeing the opportunity, agrees to lend Alice the money under her specified conditions. They proceed to formalize their agreement through an ESCROW loan agreement, utilizing the Origin snippet. This agreement catalogs the digital artwork as collateral, arranges a repayment schedule amounting to $10,500 over 12 months, and delineates an automatic process for collateral liquidation in case of default.</p><p></p><p>For the loan's execution:</p><ul><li><strong>Token Bond Creation - The Loan:</strong> </li></ul><p>A "Money Ownership Right Token" is bonded with a "Money Possession Right Token," which is then dispatched to Alice, marking the disbursement of the loan.</p><ul><li><strong>Token Bond Creation - The Collateral:</strong> </li></ul><p>An "Ownership Right Token" representing 100% ownership in Alice's digital artwork is bonded with a "Collateral Ownership Right Token." This collateral token is then sent to Bob's wallet, effectively securing the loan.</p><ul><li><strong>Bond Specification:</strong></li></ul><p>The loan agreement's specifics—including the repayment schedule, the conditions under which the collateral may be liquidated, and other critical terms—are jointly established by Alice and Bob. Following their agreement, both the money-associated smart contract (AS) and the asset smart contract (SC) are updated to accurately incorporate these specifications.</p><p><br></p><p>Should Alice fail to adhere to the repayment terms, the collateral process outlined in their agreement would be initiated. This would involve the automatic liquidation of the collateral—Alice's digital artwork—effectively transferring a token representing 100% ownership to that artwork to Bob as per the terms specified in the bond specification. This transfer is facilitated by the underlying smart contracts, which govern the conditions and execution of the ownership transfer based on the agreement's stipulations.</p> |
| -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |

<figure><img src="/files/hlSfMKGut5VaY6PJNTNn" alt=""><figcaption><p> - P2P loan mechanics on OAE</p></figcaption></figure>


# 2.10.2 Appraisers And Custodians

OAE P2P lending engine introduces the possibility for social hub services providers to take on two key additional roles.&#x20;

First, IAC providers can be utilized as experts in **evaluating the value of non-monetary assets** proposed as collateral by borrowers. Their tasks in this role include:

* Conducting an impartial assessment of the non-monetary assets' worth.
* Verifying the legitimacy of the valuation provided by the borrower or a third-party appraiser chosen by the borrower.
* Confirming the reliability of the source providing the asset valuation.

Second, authentication services may also be tasked with the **safekeeping of specific assets designated as collateral**. This custody role entails:

* The physical handover of the asset from the owner to the custodian.
* The re-authentication of the asset to ensure its description remains accurate, using event mirroring.
* The creation of a \[custody right] token that is bonded to the \[ownership right] token of the asset, with the relationship between these rights detailed in the asset's smart contract.

\
Therefore OAE P2P lending engine expands Social Hub spectrum by 2 specific roles to be taken in OAE ecosystem:   **Appraiser and Custodian.**

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# 2.10.3 Xend Fundraising Platform On OAE

The functionality of the Peer-to-Peer (P2P) platform sets the groundwork for an advanced co-crediting and fundraising framework. This extension aims to enhance the flexibility and security of fundraising campaigns through several key mechanisms:

* Milestone-Based Payouts: Ensures that funds are disbursed in alignment with the achievement of predefined project milestones, offering an added layer of accountability and progress tracking.
* Asset-Based Collaterals for Investors: Provides a mechanism for securing investments through tangible or digital assets, offering investors added security and assurance.
* Issuance of Self-Executable Revenue Participation Instruments: Facilitates the creation of instruments that automatically partake in revenue distribution, linked directly to the company's wallet and bank account. This approach simplifies the revenue-sharing process, making it transparent and efficient.

<mark style="color:orange;">**Integration with AssetChain**</mark>

Fundraising and incubation platforms are likely to form a  ‘precursor’ step before issuance of specific assets on the AssetChain. This strategy is particularly relevant for projects at their inception or expansion stages, where securing funding is crucial. The envisioned process involves:

* Tokenized relations via AssetChain: This includes the creation of on-chain representations for companies and equities/shares, transforming them into programmable entities capable of interacting within the blockchain ecosystem.
* Issuance of Tokens Through Smart Contracts: The platform supports the issuance of various token types, leveraging these smart contracts. These tokens include:
* Tokenized Equity/Shares: Offering a digital representation of ownership or equity in a company.
* Loans: Enabling the borrowing and lending of funds under predefined terms.
* Access Tokens: Granting token holders specific rights or access within the ecosystem, such as participation in decision-making processes or access to exclusive services.

<br>

<figure><img src="/files/2gNo5XX1mrIvzzKMBH5G" alt=""><figcaption><p> - Xend Fundraising platform</p></figcaption></figure>


# 2.11 AI Stack

<mark style="color:orange;">**Adding AI Integration At RWAs Base Infrastruture Level**</mark>

1. **Problem:** Traditional Layer-1 infrastructures and blockchains struggle with seamless **real-world asset (RWA) integration** due to inefficient valuation and compliance frameworks.\
   **Solution:** OAE provides **AI-driven RWA pipelines** for frictionless onboarding, auditing, and valuation.
2. **Problem:** **Static oracles** lack the sophistication to deliver accurate, real-time data and are prone to manipulation.\
   **Solution:**  OAE **AI-powered oracles** ensure dynamic, real-time data feeds with anomaly detection and predictive accuracy.
3. **Problem:** **Regulatory compliance** on traditional infrastructures and blockchains is manual, slow, and prone to errors, resulting in high costs.\
   **Solution:**  OAE embeds an **AI compliance engine** that continuously monitors and enforces KYC/AML requirements while adapting to evolving regulations.
4. **Problem:** **Credit scoring for tokenized assets** relies on simplistic metrics, exposing lenders and investors to unnecessary risks.\
   **Solution:**  OAE **AI-driven credit scoring** uses advanced predictive models to mitigate risks and enable smarter lending.
5. **Problem:** **Complex user experiences** and fragmented tools hinder adoption by non-technical users and businesses.\
   **Solution:** OAE offers **AI-guided smart wallets** to simplify asset management, compliance, and yield optimization.
6. **Problem:** Traditional **governance models** fail to leverage insights for optimal decision-making and efficient validator performance.\
   **Solution:**  OAE **AI-enhanced governance** uses data-driven insights to select reliable validators and improve decision-making.
7. **Problem:** Balancing **data privacy** with blockchain transparency is challenging, particularly for financial data.\
   **Solution:**  OAE ensures **privacy-preserving computations** through AI-powered encryption and selective disclosure frameworks.
8. **Problem:** Developers lack access to **AI-enabled tools** for building advanced RWA-focused applications.\
   **Solution:**  OAE provides **AI-native SDKs and compliance modules** to empower developers with faster, smarter dApp creation.
9. **Problem:** **Tokenized RWA markets** face low liquidity and poor risk assessment, reducing their attractiveness.\
   **Solution:**  OAE **AI-driven asset performance modeling** enables accurate risk forecasting and better market stability.
10. **Problem:** Traditional Layer-1 chains prioritize **speed and cost** over innovation in real-world utility.\
    **Solution:**  OAE is the **“Intelligence-First Infrastruture and Blockchain,”** merging AI and Layer-1 technology to redefine utility and scalability.

<mark style="color:orange;">**AI Stack**</mark>

The AI stack will merge cutting-edge AI tools with Layer-1 technology at the base layer to redefine utility, scalability, and innovation of real-world assets. By seamlessly integrating AI at its core, OAE will provide intelligent infrastructure to transform RWAs, ensuring dynamic compliance, accurate valuation, and real-time data pipelines. It aggregates raw data from the OAE ecosystem and external sources, including:

* Blockchain and off-chain input data
* Data generated by core OAE features and products
* Data from Xend Solutions
* User activity data across key infrastructure components

These data are then processed through a privacy and anonymization layer (*where required*), grouped into relevant streams, and fed into appropriate training models. These models enable the creation, refinement, and delivery of **tailored AI solutions**. <br>

There are 4 AIs categories introduced by the AI Stack:&#x20;

* **WatchDogs**
* **Assistants**
* **Improvers**
* **Concepts**<br>

<figure><img src="/files/SDZ1ghtDqYn3oCYvmpE9" alt=""><figcaption><p>AI Stack Categories</p></figcaption></figure>


# 2.11.1 Watchdogs

#### <mark style="color:orange;">**Watchdogs**</mark>

All Watch Dogs are interconnected – they can use one another when needed, share data, communicate, and contribute to each other's training models and databases.<br>

Watchdog *access points* are:

* Origin Studio (asset owners and IAC triangle members)&#x20;
* GOR (accessible for users)

Watchdogs are also seamlessly embedded into the core OAE infrastructure via Xend Connect. They play a critical role in **spot verification** of assets onboarded to the chain and **risk flagging** (e.g., AML checks, illegality monitoring)

All watchdogs can be used ad-hoc or for **ongoing monitoring** with custom frequency.

#### &#x20;<mark style="color:orange;">**AI Anomalies Detector**</mark>

**AI anomalies detector** utilizes external big data and advanced training models to monitor anomalies and risks related to specific assets. It detects issues like inconsistencies, illogical data, real-world conditions, and other factors that are not identifiable through direct data replication.

\
Smart ASR leverages natural language processing (NLP) and draws conclusions from sources such as:

* Comments and opinions
* Advanced thought processes (e.g., valuation logic for cars, real estate, etc.)
* Comparisons with localized data and price ranges<br>

Traditionally, such anomalies would be flagged by authentication or compliance providers as part of the IAC verification triangle. Anomalies detector however, enables **faster, cheaper, and real-time flagging**. These flags can then be further investigated by full-scope assessment done by the IAC triangle or verified through simple fact/data checks by users who run that feature.<br>

#### <mark style="color:orange;">AI Credibility Assessor</mark>&#x20;

This AI module is linked to a broader stream of data specific to the given asset. It first uses [Anomalies detector](#ai-anomalies-detector) and then incorporates pre-acquired data, including:

* Historical local data (news and relevant events in the region/country)
* Legislative stability
* Currency stability
* Legal compliance
* Publicly available data sources
* Asset insurance details
* Asset setup within the OAE ecosystem
* Input from asset authenticators (irreplaceable even with AI)

Credibility Assessor then runs its own automated authentication and compliance assessment using its 2 other ‘AI watchdog friends’ - [Compliance Validator ](#ai-compliance-validator)and [AI Event Mirror](#ai-event-mirror), to generate AI credibility rating.

***Note:** If an asset owner uses AI Credibility Scoring or replaces authentication and compliance validation components of the IAC with AI-based workflows and scores, this will be clearly disclosed on the asset's main page. A warning will indicate the absence of relevant human-based assessment.*

#### <mark style="color:orange;">AI Compliance Validator</mark>

The AI Compliance Validator collects and monitors regulations related to assets from all countries. It uses advanced algorithms to track changes or additions to these regulations, forming a continuously updated training model.

**Key Features:**

* **Real-time Updates:** Provides real-time updates on regulatory changes and their implications for tokenized assets.<br>
* **Legal Integration:** Enhances legal binding features by connecting assets to legal record sources, even without an available API endpoint (subject to limitations like CAPTCHA or anti-AI restrictions).<br>
* **Automated Compliance Assessment:** Offers automated compliance validation, though with a lower credibility score compared to human-based compliance assessments.&#x20;

#### <mark style="color:orange;">AI Event Mirror</mark>&#x20;

The AI Event Mirror  enhances asset authentication - its usage is optional by the asset owner or asset authenticator, however if used and incorporated as part of ongoing asset status replication workflow, it will increase authenticity scoring (co-building overall credibility scoring of the asset).&#x20;

**Key Features:**

* **Real-Time Data:** Receives live news and updates from multiple sources within a given region.<br>
* **NLP Interpretation:** Uses natural language processing (NLP) to interpret the data.<br>
* **Event Detection:** Identifies crucial physical events such as floods, fires, or destruction.<br>
* **Integration:** Seamlessly connects with Smart ASR for enhanced anomaly detection and validation

***Note:** Full replacement of asset authentication is not possible - physical existence of the asset must always be confirmed by the human).*


# 2.11.2 Assistants

#### <mark style="color:orange;">Asset Scout</mark>&#x20;

Asset Scout identifies and recommends marketplace opportunities by analyzing real-time data and user preferences. It helps uncover valuable opportunities such as **bankruptcy auctions, distressed assets, or undervalued tokenized rights.**

**Key Features:**

* **Opportunity Detection:** Gathers and assesses data about emerging marketplace opportunities, including auctions, distressed sales, and undervalued assets.<br>
* **Behaviour Analysis:** Examines user preferences and historical activity to deliver relevant, personalized recommendations.<br>
* **AI Chatbot Integration:** Allows users to explore and receive tailored suggestions interactively.<br>

#### <mark style="color:orange;">Asset onboarding</mark>&#x20;

Leverages AI to automate the classification and onboarding of assets:&#x20;

**Key Features:**

* **Automated Classification:** Utilizes AI algorithms to automatically categorize assets based on predefined criteria, reducing manual effort and errors.<br>
* **One-Click Onboarding:** Provides pre-structured templates and settings for quick approval or adjustment, enabling swift asset integration.<br>
* **Complex Workflow Management:** Capable of handling intricate onboarding processes, including compliance checks and multi-step approvals.<br>
* **Batch Onboarding:** Supports the simultaneous onboarding of multiple assets, enhancing operational efficiency

#### &#x20;<mark style="color:orange;">RWA market AI insights</mark>

A centralized hub offering AI-driven analytics and insights into Real-World Asset (RWA) markets. The subpage aggregates and processes real-time data to deliver actionable information, helping users make informed decisions.

**Key Features:**

* [ ] **Market Trends and Analytics:**
*

&#x20;  \* Tracks asset performance across categories (e.g., real estate, commodities, tokenized rights).

* Highlights emerging trends, price shifts, and market opportunities.
* Uses AI to detect patterns and anomalies in asset behavior.<br>
* [ ] **Real-Time Updates**
*

&#x20;  \* Pulls live data feeds from external sources such as news, economic reports, auction results, and price indices.

* Identifies key events impacting asset value (e.g., legislation changes, local disruptions).<br>
* [ ] **AI-Driven Insights**
*

&#x20;  \* Generates tailored insights based on asset type, user preferences, and historical activity.

* Offers predictive analysis for potential asset growth or risk.<br>
* [ ] **Interactive Visualizations**
*

&#x20;  \* Displays data using charts, heatmaps, and comparative tools for better interpretation.

* Allows users to filter insights by region, asset type, or timeframe.<br>
* [ ] **Integrated Accessibility**
*

&#x20;  \* Accessible from all OAE frontend components, ensuring seamless navigation.

* Linked with [AI Watchdogs ](/2.0-oae-onchain-assets-environment/2.11-ai-stack/2.11.1-watchdogs)and [Asset Scout](#asset-scout) for deeper analysis&#x20;

#### <mark style="color:orange;">Risk predictor</mark>&#x20;

An advanced AI algorithm capable of predicting potential future events related to assets before they occur. It leverages broad  data analysis combined with localized events and trends to anticipate risks and disruptions.

Predicts potential risks tied to assets, such as:

* Fraud or market manipulation
* Legal disputes or legislative instability
* Natural disasters (e.g., floods, fires)
* Economic shifts affecting asset value

***Example:** A user monitors a commercial real estate asset. The Risk Predictor identifies localized economic slowdowns and rising vacancy rates in nearby properties. It forecasts a potential decrease in asset value within the next 6 months, enabling the user to take preemptive action.*

Accessible via GOR for ad-hoc queries.  Does not impact credibility scoring.&#x20;

<br>


# 2.11.3 Improvers

### Improvers

#### <mark style="color:orange;">Direct validation pathfinder</mark>

A centralized AI tool that simulates entire regulatory environments to **discover pathways that can be used for direct compliance validation** (i.e. linking eset smart contract with data endpoints or workflows enabling automated reliable compliance validation). &#x20;

Used centrally as self-improvement protocol for OAE not available for end users.

#### <mark style="color:orange;">Co-creation manager</mark>

A collaborative tool enabling users to contribute to OAE data - whether that’s assets databases, API endpoints, regulatory data or specific workflows or pathways improving the infrastructure.&#x20;

**Process:**&#x20;

* Users upload their contributions to the AI&#x20;
* AI then:&#x20;
* * Assess the content.
  * Detects overlaps with existing sources.
  * Generates content tags for organization.
  * Rates the added value of the input.
  * Restructures existing infrastructure if necessary.
  * Submits reward payout proposals for central team approval.\ <br>


# 2.11.4 Concepts

### Concepts

#### <mark style="color:orange;">Country Creator</mark>

The Country Creator uses AI to establish a legally valid physical country by managing territorial claims, drafting legal frameworks, and facilitating diplomatic recognition.

* Analyzes unclaimed land (e.g., Bir Tawil) and international waters.
* Drafts the constitution and national laws based on global best practices.
* Ensures compliance with international legal standards.
* Initiates and manages communications with nations and international organizations (e.g., UN) for recognition.
* Builds partnerships and trade agreements.
* Manages citizen onboarding, including dual citizenship options.

Communicated with all other RWA AI models for consistency and efficiency.

Selected **applicants** willing to use this feature and pursue their own country creation will be able to use all OAE AI features for free for a predetermined amount of time.&#x20;

The first users to successfully register a **new country** with our Country Creator will be eligible to claim **high-value bounties** as rewards.<br>

#### <mark style="color:orange;">Religious Organization & Church Creator</mark>

The Religious Organization & Church Creator uses AI to establish legally recognized religious entities and structures while offering strategic legal shielding benefits.

* Creates religious doctrines, tenets, and ethical frameworks.
* Drafts all necessary legal documents for recognition and operation.
* Develops metaverse-based places of worship and virtual religious experiences.
* Negotiates with governments and interfaith councils for recognition and collaboration.
* Generates religious texts, sermons, and educational materials.
* Analyzes optimal locations for physical places of worship using population demographics and demand data.

**Added Value:** Transferring assets under church ownership often provides **superior legal shielding** against claims, lawsuits, or insolvency risks.

Similarly to Country Creator, first users to successfully register **a church or religious organization**  with our AI tool will be eligible to claim **high-value bounties** as rewards.

\
\ <mark style="color:orange;">**Human Asset Score (AI) and Job Applier**</mark>

Evaluates your personal worth, connects you to job opportunities, and guides you through the process of increasing wealth.

* Upload your data (skills, demographics, age, etc.) to assess your value in different countries.
* Select your preferred country and type of work (remote or physical).
* Receive guidance on job opportunities based on your profile.
* Let AI monitor, apply for jobs, and review responses continuously.
* Get AI assistance to prepare for interviews, including mock sessions and strategy tips.
* Upon success, receive relocation guidance or relevant next steps.
* Jointly assess your total value, including both personal worth and owned assets.
* Get actionable guidance on increasing your wealth and overall financial standing.

\ <br>


# 3.0 Xend Browser

The Xend Browser, a key component of the Xend V3 roadmap, is expected to become the central software platform developed and maintained by the Xend Finance team.


# 3.1 One-4-All

The Xend Browser, a key component of the Xend V3 roadmap, is expected to become the central software platform developed and maintained by the Xend Finance team. It integrates a blend of open-source and proprietary features and will be accessible for free download in several formats:

* A desktop application,
* A mobile application,
* And as a standalone web platform, though the web version may have certain functional restrictions.

Functionally, the Xend Browser offers seamless access to the comprehensive Xend Finance Ecosystem. This includes the OAE framework, GOR, Origin Studio, Social Hub, Xend Solutions, among others, providing users with a unified gateway to the extensive services and tools offered by Xend Finance.\ <br>

<figure><img src="/files/L9g8CeuSgGQ3zwhG2hua" alt=""><figcaption><p> - Xend  Browser</p></figcaption></figure>


# 3.2 NodeOs

Installing the Xend Browser on any device also entails the installation of NodeOs, which the device's owner can freely activate or deactivate. NodeOs offers several capabilities:

* The ability to set up and operate a **MicroNode**, which
  * Allows to use the device as one AssetChain validation device
  * Requires linking with a Xend ID.
* Setting up a **rotating uptime or backup procedures**&#x20;
  * Users with multiple devices linked to the same Xend ID, all running NodeOS, can implement a 'rotating uptime' strategy for validation. This approach involves programming the devices to alternate their active periods, such as switching every 8 hours. This ensures continuous validation activities without overburdening any single device, maintaining optimal network participation and device longevity.
  * For users with multiple devices, employing them as backup validators offers a resilient solution. Should one device become unavailable, a secondary device can automatically assume the role, stepping in to continue the validation process as a backup MicroNode. This seamless transition helps maintain the required uptime rate for the associated Xend ID, ensuring uninterrupted network participation.
* Transforming the device into a comprehensive hardware ledger that includes:
  * **A Xend ID**,
  * **NodePay**, a feature enabling the device to facilitate both physical and virtual transactions,
  * A Hybrid Wallet, which provides seamless access to the user's Xend Exchange and OAE wallets associated with their Xend ID.

<figure><img src="/files/qW2jaF2IBuTxZQbnuxcZ" alt=""><figcaption><p>- Example of NodeOs setup with single device and multiple devices</p></figcaption></figure>


# 3.3 Subnet

The Xend Browser introduces the capability to create subnets, empowering any node or collective of nodes to establish a 'Subnet' accessible to all Xend Browser users. Administrators of these subnets have the autonomy to set up their domain registration and hosting fees policies.

Xend Browser will support two levels of subnets:

* **Global:** This level is overseen by the Xend Finance team, adhering to the Xend domain registration policy. It is primarily designed for companies and asset profiles websites.
* **Local:** Users, either individually or in groups, can establish local subnets. These have the flexibility for creators to implement their domain registration policies.

Domain registration within the Xend Global Subnet, as well as the creation of local subnets, will be exclusively available to users who achieve a specified staking score level. Moreover, Xend Finance will impose commission or fixed fees for the following transactions:

* Domain registration within any local subnet,
* Sales or purchases of domain names.

This structure promotes a decentralized yet structured ecosystem for domain management and hosting within the Xend Finance platform, offering various levels of engagement and autonomy to its users.

<figure><img src="/files/esXxLKCBpY1jaPYsA7x6" alt=""><figcaption><p> - Global browser internet and subnet access</p></figcaption></figure>

\ <br>


# 3.4 Explorer

In terms of functionality, the Xend Browser will mirror the capabilities of conventional web browsers such as Google Chrome or Mozilla Firefox. Its search bar will facilitate direct access to a variety of resources, including:

1. The Global Web,
2. GOR Transaction Explorer,
3. GOR Asset Profiles,
4. Xend Global Subnet,
5. Local Subnets.

This setup ensures users can effortlessly navigate through both the broader internet and specialized segments of the Xend ecosystem, making it a versatile tool for web exploration and blockchain interactions.

\ <br>


# 3.5 Node Enterprise

Node Enterprise offers a solution for both individual entrepreneurs and business entities, providing the following suite of tools for on-chain business operations embedded directly into Xend Browser. &#x20;

* **On-chain Company Registration:** Facilitates the immediate registration of businesses on the blockchain by connecting e-Administration company registration API with entity  asset smart contract or onchain business ID.&#x20;
* **Tax:** Integrates features for managing tax obligations, including calculation and record-keeping functionalities to assist in compliance with relevant tax regulations.
* **Accounting:** Provides accounting tools designed for the blockchain environment, supporting the recording, tracking, and management of financial transactions.
* **Auditing:** Offers capabilities for conducting audits within the blockchain framework, enhancing the transparency and integrity of financial reporting.
* **Automation Layer:** Includes an automation layer for streamlining various business processes, reducing manual effort and increasing efficiency.
* **Digital Signature:** Supports the use of digital signatures for authenticating documents and transactions, ensuring security and non-repudiation.
* **e-Admin Connection:** Connects with electronic administration services (e-Admin) for seamless interaction with government and regulatory bodies.
* **OAE Integration:** Offers integration with the Onchain Asset Environment (OAE), enabling businesses to leverage blockchain assets and functionalities within their operations.


# 3.6 e-Admin

e-ADministration layer inclusion means Xend Browser allows to directly facilitate all affairs that an individual or entity might have with the public administration or a given country (e.g. entity or business activity registration panel, tax submission, social care and more).


# 3.7 NodeBox

The Xend Browser incorporates an integrated mailbox feature that seamlessly connects with AssetChain and Origin Studio. This integration ensures that every email sent or received through the Xend mailbox can be associated with a unique transaction ID, offering an immutable proof of email delivery.

To maintain privacy and security, the content of the emails will not be stored directly on the blockchain. Instead, the Xend mailbox employs an asynchronous hashing technique to create a secure and flexible system for controlling access to the email's content. This method allows users to:

* Specify who can access the content of an email, whether it's a specific individual or a group.
* Enable or disable the on-chain forwarding of the email.
* Track the email's forwarding history and identify the recipients.

The introduction of the Xend mailbox represents a significant innovation, providing users with a legally valid and immutable confirmation of email delivery. This feature allows the fact of sending an email, its recipient, and its content to be verified through a confirmation link that includes the email ID.

Furthermore, users have the flexibility to organize their emails into custom folders, mirroring the conventional functionalities offered by popular digital mailbox services such as Gmail or Thunderbird. This positions the Xend mailbox as a revolutionary tool in digital communication, combining traditional usability with the security and transparency of blockchain technology.

\ <br>


# 4.0 Progressive Synchronization (V3)

Without AssetChain there’s no Progressive Synchronization and without Progressive Synchronization there’s no point in building the AssetChain in the first place.&#x20;

This interdependence underscores our strategic vision for the OAE's long-term relevance and ambition: to establish a global architecture that can be used as a live, legally active environment for asset digitization and transactions.&#x20;

In pursuit of this overarching goal, we anticipate the global uptake of OAE and Xend Browser, facilitated through 4 distinct yet interconnected 'synchronization paths':

1. Progressive formation of IAC councils&#x20;
2. Progressive adoption of Public AssetChains&#x20;
3. Progressive adoption of Public Subnets
4. Development of OAE dApp marketplace

These synchronization paths converge into a comprehensive 'Progressive Synchronization’ campaign marking the third and culminating phase of our organization's evolution. This strategic initiative aims to harmonize digital asset management globally, leveraging the unique capabilities of the OAE and Xend Browser to foster an interconnected, secure, and efficient digital world.

<figure><img src="/files/beIJFnlKToo6IPZvUXPd" alt=""><figcaption><p>- Progressive synchronization</p></figcaption></figure>


# 4.1 Objectives Of The IAC Councils

Progressive formation of IAC councils means that over time, all authenticators, insurance providers and compliance validators registered on Social Hub and with their territorial activity range in a given country will - by default - form Local IAC council, with the voting rights and profit distribution based on their RWA staking scores.&#x20;

The IAC Council's establishment aims to collaborate closely with local regulators to achieve several key objectives:

1. **Integration with Digital Public Administration:** Facilitate the linkage of the OAE environment to the country's digital public administration layer, including all relevant registers of ownership, identity, and entities.
2. **National Blockchain Infrastructure:** Advocate for the development and use of local, national blockchains and the deployment of MicroNodes to enhance decentralized network resilience and capacity.
3. **Local National Subnet Development:** Support the creation of local national subnets to provide tailored blockchain solutions that meet specific national requirements.
4. **Implementation of National Node Solutions:** Encourage the adoption of national NodeID, NodeWallet, and NodePay solutions to eliminate the need for third-party providers in money custody and payment processing, thereby streamlining these essential financial operations.
5. **Central Bank Blockchain Integration:** Promote the integration of national central banks and currency minters with blockchain technology, including the issuance of an exclusive digital stablecoin. This stablecoin would have exclusive support, legal recognition, and the sole licensing right to digitize the national currency.
6. **Taxation and Accounting Automation:** Advocate for the use of AssetChains and the OAE to automate and self-execute taxation and accounting obligations, simplifying compliance and enhancing efficiency.
7. **Boosting OAE and Xend Browser Adoption:** Work towards increasing the adoption of OAE and Xend Browser within the country, aiming to leverage their capabilities to improve the efficiency and security of digital transactions and services.


# 4.2 Progressive Adoption Of Public AssetChains

From Public AssetChains Adoption perspective, The IAC Council's efforts to implement the discussed policy are anticipated to culminate in one of two favorable outcomes:

1. <mark style="color:orange;">**Integration of OAE with Public Asset Chains**</mark>

* Regulators may opt to license the OAE, integrating it as the Public AssetChain connected to their Digital Public Administration Layer. This scenario benefits Xend Finance by Positioning the local IAC council as the steward of OAE, making it the exclusive national framework, in return for licensing fees or a share in on-chain transfer fees.
* Enhancing the utility of the RWA token by enabling participation in the IAC and profit-sharing, thus creating a robust use case.
* Ensuring a steady revenue stream for Xend Finance through commission fees from IAC revenue.

2. <mark style="color:orange;">**Development of an Independent Solutions**</mark>

Alternatively, a regulator might develop an independent system analogous to the OAE. This outcome still presents advantages for Xend Finance by Allowing the adjustment of the four levels of OAE AssetChain infrastructure to mirror the specific country's setup, positioning it as a superior alternative connected to a global network of asset owners and on-chain capital.


# 4.3 Progressive Adoption Of Public Subnets

The IAC Council is actively advocating for the creation of independent national SubNets. This initiative aims to mitigate the risk of critical operational segments of a country's administration being under the influence of foreign private entities and subjected to restrictive domain registration policies, particularly those enforced by the US-centric ICANN.

Adopting this model will establish the OAE and NodeOS Subnet solution as a secure and equitable alternative to the current World Wide Web architecture, ensuring freedom from control by any foreign or private actors. The significance of this move lies in its potential to safeguard digital administration layers and reinforce the broader objective of achieving digital national independence.

For Xend Finance, the push towards national SubNets opens up potential revenue streams, including licensing or commission fees. This could involve local IAC councils being elected to oversee and manage domain registration policies within their respective countries. Alternatively, countries could adopt independent solutions that seamlessly integrate with the main OAE framework, further enhancing their digital sovereignty and operational security, while at the same time increasing OAE adoption by linking already existing infrastructure with more synchronized national data and web architectures.


# 4.4 OAE Marketplace

The OAE Marketplace will enhance the Xend Browser as Public AssetChains and Subnets become widely adopted. This marketplace will feature a range of downloadable plugins and solutions that can be customized by both Xend Finance users and the administrators of Public AssetChains and Subnets.

The OAE Marketplace aims to:

* Provide gateway to customize and increase the capabilities of the Xend Browser to support unique requirements, possibly influenced by specific regulatory needs or asset categories.
* Allow for the customization of Public AssetChains, including the integration of new asset types or tokens.
* Enhance the functionality of Subnets by extending their capabilities.

The marketplace will be open to developers, showcasing both official solutions from Xend Finance and third-party plugins.

\ <br>


# Practical Use Cases

OAE - Practical Use Cases

First universal framework and blockchain for worldwide assets tokenization and on-chain management\
\
Here are some of the practical use cases for Xend Finance Onchain Asset Environment


# Business & Banking

### <mark style="color:orange;">Tokenized Companies</mark>

Companies can fully integrate onto the blockchain by onboarding their entire operational structure and assets as smart contracts on the Asset Chain. This process involves the tokenization of rights associated with these assets, such as equity shares.

\
Origin Studio and OAE can be used to run your company, automate reporting obligations, and keep a digital portfolio of all your company assets, linked with bank accounts and company wallets. Smart Contract Automation for Compliance and Regulatory Needs: Since the OAE is designed to operate within legal standards, there's an opportunity to highlight the use of smart contracts for automating compliance-related processes. This could involve auto-enforcing compliance with local laws and regulations for asset transfers and transactions.

| ***Practical Example:**  Practical Example: A pharmaceutical company uses the Asset Chain to onboard its research facilities and patents as smart contracts. It then issues tokens representing shares of equity in the company, as well as tokens for specific rights like the use of its patented drug formulas. This blockchain integration facilitates direct and secure investor engagement, efficient asset management, and transparent operational processes, making it easier to attract global investments and partnerships. This approach exemplifies how companies can leverage Xend Finance and OAE to operate entirely within a blockchain ecosystem, streamlining every aspect of their business operations and asset management.* |
| ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |

### <mark style="color:orange;">Integrating Banking with Blockchain via Event Mirroring</mark>

\
OAE’s event mirror framework provides a robust solution for linking decentralized applications (dApps) with traditional banking services, facilitating a seamless connection between blockchain technology and the banking sector. This system supports the creation and management of stable coins that are pegged to fiat currencies, enhancing trust and stability in digital transactions.

| ***Practical Example:**  A financial institution wishes to offer a fiat-pegged stablecoin to its customers. Using the OAE event mirror framework, the institution can synchronize the total value locked (TVL) in fiat with the issuance (minting) and redemption (burning) of the stablecoin. This process is not based on trust alone but is secured by an autonomous and immutable system that maintains a real-time, verified link between fiat reserves and their digital counterparts on the blockchain. This ensures that every digital token is backed by an equivalent amount of fiat currency, providing transparency and security that enhances user confidence and regulatory compliance.* |
| ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |

###

### <mark style="color:orange;">P2P Loans with asset-based collateral</mark>&#x20;

\
In OAE, users can use assets as potential collateral for the loans. The better and more credible collateral they use, the higher their chances to attract lenders. On the other hand - Lenders might use OAE P2P lending platform to seek for valuable lending opportunities and earn ROI on lended money while benefit from secure, verifiable collateral.&#x20;

<br>

| ***Practical Example:** A user has onboarded a high-end laptop onto the OAE platform, completing a detailed validation, authentication, and insurance process to establish its value and condition. Due to its high credibility rating on the platform, the laptop is recognized as a valuable asset. The user leverages this laptop as collateral to secure a loan, attracting lenders who are assured of the asset's verified value and secure investment potential. This setup benefits both parties: the user gains access to needed funds, while lenders have a tangible, well-documented asset to secure the loan.* |
| ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |

<br>

### <mark style="color:orange;">Milestone-Based Payouts for Project Funding</mark>

\
OAE leverages smart contract technology to enable milestone-based payouts in project funding, ensuring that investments are released in stages as specific objectives are met. This mechanism enhances the security of investments and aligns incentives between project developers and investors.

<br>

| ***Practical Example:** A group of investors interested in funding a new tech startup decides to use the OAE platform to manage their investment. They establish an investment fund as a smart contract, stipulating that funds will only be released when the startup achieves predefined milestones, such as completing a prototype or reaching a user acquisition target. Each milestone release must be approved by a majority of the investors, who vote according to their share in the investment fund. This structure not only secures the investment against potential mismanagement but also motivates the startup team to meet their goals promptly to receive the next tranche of funding. This strategic funding approach promotes transparency and accountability, protecting investors while supporting project success.* |
| ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |

\ <br>

### <mark style="color:orange;">Revenue-Locked Loans</mark>

\
OAE facilitates a novel financing model known as revenue-locked loans, where investors lend money to a business and in return, gain rights to a portion of the company's revenue through a smart contract. This continues until a predetermined repayment threshold is met, often set above the original loan amount.

<br>

| ***Practical Example:** A startup looking to expand its operations but wary of diluting ownership opts for a revenue-locked loan from multiple lenders via OAE. Instead of traditional interest payments, the startup agrees to direct a percentage of its monthly revenues to repay the lenders. This arrangement is managed through a smart contract that automatically distributes revenue shares to the lenders until they have received an amount equal to 200% of the initial loan. This model allows the company to manage cash flow more effectively during critical growth phases without the immediate financial burden of fixed loan repayments, while lenders benefit from potentially higher returns linked directly to the company's financial performance.* |
| -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |

\
\ <br>


# Real Estates

### <mark style="color:orange;">Extended Real Estate Tokenization</mark>

\
OAE enables the digitization and tokenization of various property rights beyond simple ownership, such as leases and other non-ownership rights. These tokens can represent different legal relationships with property, like the right to use or lease the land.

<br>

| ***Practical Example:** Consider a commercial building with multiple lease agreements. Each agreement can be tokenized into a separate digital asset on OAE. These lease tokens can be bought, sold, or transferred independently of the property's ownership. For example, a business might sell its long-term lease rights to another entity, or an individual could acquire perpetual usufruct rights to use a piece of land without owning it. This approach opens up new investment opportunities and facilitates dynamic management of real estate rights.* |
| ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |

\ <br>

### <mark style="color:orange;">Co-owned Holiday Homes</mark>

\
OAE facilitates the tokenization of ownership for holiday homes in exotic locations, allowing multiple owners to share property rights and manage usage schedules through blockchain technology.

<br>

| ***Practical Example:** Imagine a picturesque villa by the sea in Greece. Through OAE, this property is tokenized into divisible ownership shares. Investors can purchase these shares, gaining partial ownership of the holiday home. The blockchain platform organizes and enforces a usage schedule, ensuring that each co-owner can access the property fairly according to the proportion of their ownership. This system not only simplifies the management of shared holiday properties but also enhances transparency and reduces potential conflicts among owners, making it an ideal solution for those looking to invest in vacation real estate without the hassle of sole ownership responsibilities.* |
| ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |


# Compliance - by - Design

### <mark style="color:orange;">Ownership Shares and Specific Rights as Stand-Alone Assets</mark>

\
OAE enables the tokenization of any rights, including partial or fractional ownerships, as stand-alone assets. This functionality is applicable to various assets such as real estate, property shares, or even a fraction of existing tokens, allowing for the creation of fractional ownership where partial rights can be managed independently.

<br>

| <p><em><strong>Practical Example:</strong> Consider owning 40% of an apartment building or a 25% interest in a patent. Through OAE, these partial ownerships can be tokenized into individual assets. These tokens represent your share and can be traded or leveraged independently from the main asset. This capability not only simplifies the management of fractional ownerships but also enhances their liquidity and marketability, facilitating easier access to investments and the potential to diversify investment portfolios significantly.</em></p><p><br></p> |
| ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |

\ <br>

### <mark style="color:orange;">Legalization of Tokens</mark>

\
OAE, along with Asset Chain and IAC triangle, facilitates the re-issuance of tokens within a legally compliant framework such as the DLT Foundations. This capability allows tokens to carry enhanced functionalities and rights, including equity shares or bonds.

<br>

| <p><em><strong>Practical Example:</strong> An enterprise can utilize OAE to transform its traditional shares into digital tokens. These tokens are not merely digital assets but are structured to include legal rights such as dividends, voting powers, and a share in the company’s revenues. By re-issuing their equity or debt instruments as tokens on the OAE platform, companies can ensure that all token transactions comply with regulatory standards while also enhancing the tokens’ utility. This makes the tokens more attractive to investors, as they now carry additional rights and benefits that are typically associated with conventional financial instruments.</em></p><p><br></p> |
| ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |


# Tokenization Beyond Ownership

<br>

### <mark style="color:orange;">Identity-Bonded Tokens</mark>&#x20;

\
OAE allows minting identity-bonded assets and tokens  - regardless of who holds them, the owner is recorded at a smart contact level.&#x20;

<br>

| ***Practical Example:** Consider a service that offers streaming TV access through a tokenized system. A user purchases a digital access token that allows them to watch exclusive content. This token is identity-bonded, meaning it is permanently linked to the user’s identity. Although the user can transfer this token to another person's digital wallet—perhaps to allow a friend to access the content temporarily - change of current holder doesn’t change the ownership status.* |
| --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |

\ <br>

### <mark style="color:orange;">Agricultural Land Use Tokens</mark>

\
OAE allows for the tokenization of usufruct rights to agricultural land, enabling investors to benefit from the land's yield for a specific season without holding ownership of the land itself.

<br>

| ***Practical Example:** A landowner has fertile agricultural land suitable for seasonal crops. Through OAE, they tokenize the usufruct rights of this land, offering tokens for sale to potential investors. Each token grants the holder the right to use the land and profit from its yield for one growing season. This model allows landowners to monetize their land effectively while giving investors the opportunity to engage in agricultural ventures with limited commitment. Token holders can participate in the agricultural profits without the complexities and responsibilities associated with land ownership, including long-term maintenance and property taxes. This arrangement provides a flexible and accessible way for individuals to invest in agriculture and receive returns based on the seasonal productivity of the land.* |
| ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |

\ <br>

### <mark style="color:orange;">Vehicle Leasing Tokens</mark>

\
OAE enables the tokenization of vehicle leasing rights, allowing for the trade or sale of tokens that represent the remaining lease period of a vehicle. This system facilitates a flexible approach to vehicle leasing, where lease terms can be adjusted and transferred between parties without traditional restrictions.

<br>

| ***Practical Example:** A car leasing company decides to implement a token-based system for its fleet of electric vehicles. Customers initially lease a car by purchasing tokens equivalent to the lease duration they desire. If a customer's circumstances change and they no longer need the vehicle for the full lease term, they can sell their tokens on the OAE platform. The buyer of these tokens gains the remaining lease period on the vehicle, effectively taking over the lease under the original terms. This process adds liquidity to the vehicle leasing market, allowing customers to manage their leases more dynamically and adapt to changing needs without being penalized for breaking traditional lease agreements.* |
| --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |


# Global Assets Accessibility

### <mark style="color:orange;">Global Unified Exchange for all Types of Transactable Assets</mark>&#x20;

\
OAE, integrated with Xend Marketplace and Xend Exchange, creates a versatile platform for securely buying and selling a variety of assets. Users can engage in transactions involving consumer goods, real estate, vehicles, tokens, equity shares, and other ownable assets. This setup allows for both tangible and intangible assets to be traded seamlessly in a single environment.

<br>

| ***Practical Example:** A user can log into a single platform to buy real estates, lands, cars, but also digital tokens, bonds, equity shares,a s well as day to day items or collectibility.. Imagine a single platform that combines Amazon, Binance, Forex and adds Global Exchange of Real Estates and Lands.* |
| ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |

\ <br>

### <mark style="color:orange;">Liquid Real Estate Ownership</mark>

\
OAE enables partial tokenization of real estate, allowing individuals to purchase a majority stake in a property at reduced upfront costs. This system facilitates ownership sharing between the principal buyer and investors.

<br>

| ***Practical Example:**  A buyer purchases a home valued at $1 million and onboards it onto OAE. The buyer then tokenizes 49.9% of the property into fungible ownership tokens, which are sold to investors. Despite selling nearly half of the property shares, the buyer retains majority ownership, which includes exclusive residency rights and decision-making authority on leasing or selling the property. If the house is sold, the buyer is legally obligated to distribute 49.9% of the sale proceeds to the token holders. This process is overseen by a compliance validator and an authenticator who regularly check the property's status to ensure the owner's obligations are met. If there is a failure to distribute proceeds as agreed, token owners have the right to claim insurance, and the insurance provider may subsequently pursue a claim against the property owner. This system provides a secure framework for investing in real estate, ensuring both transparency and protection for investors.* |
| ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |

\ <br>

### <mark style="color:orange;">Mitigating Risks in Global Real Estate Transactions</mark>

\
OAE revolutionizes the process of buying and managing real estate globally by providing a secure and reliable platform. This system significantly reduces the risks traditionally associated with remote real estate transactions, whether for investment, leasing, or residential purposes.

<br>

| ***Practical Example:**  Consider a user in Canada looking to invest in commercial property in Japan. Through OAE, the investor gains access to a robust validation framework that offers detailed insights into the property's legality, value, and historical transactions. This ensures that all aspects of the property are transparent and authenticated, allowing for a safe and informed purchase. This capability not only unlocks the global real estate market for investors but also instills confidence in the security of cross-border property dealings.* |
| ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |

<br>

### <mark style="color:orange;">Co-Ownership Investment in Luxury and Antique Cars</mark>

\
OAE enables users to invest in luxury and antique cars through a system that supports co-ownership. This model allows car enthusiasts to own and enjoy high-value vehicles while sharing the investment cost with others.

<br>

| ***Practical Example:**  An individual purchases a luxury or antique car, fully insures it, and completes necessary compliance validation and authentication to ensure its legitimacy and value. The owner then uses OAE to tokenize 40% of the car as co-ownership rights, which are sold to investors. The owner enjoys the use of the car, maintaining primary custody. When the car is eventually sold—potentially at a higher value due to appreciation—the profits are distributed proportionally among the co-owners. This arrangement allows investors to benefit financially from the appreciation of the car's value without the need for physical possession or direct maintenance, providing a unique investment opportunity in the luxury car market.* |
| ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |

\ <br>

### <mark style="color:orange;">Tokenized Ownership of Art and Collectibles</mark>

\
OAE provides a platform for art collectors to tokenize and manage their collections, allowing for ownership transfers without the need to relocate the physical items.

<br>

| ***Practical Example:** An art collector onboards their collection onto OAE, setting up a detailed policy for authentication, legal validation, insurance, and custody. This ensures each piece is verified, protected, and properly documented under the collector's ownership. The collector retains physical custody of the art but uses OAE to tokenize the ownership rights. These tokens can then be sold or transferred, enabling new owners to acquire shares or full ownership of the artworks without physically moving them. This system facilitates seamless transactions and changes in ownership, preserving the art's condition while providing legal and financial flexibility for collectors and investors alike.* |
| ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |

<br>

### <mark style="color:orange;">Authentication by Anyone</mark>&#x20;

\
OAE empowers individuals to become authenticators, opening up opportunities for users to offer asset validation services. By logging in, staking a sufficient amount of $RWA, and registering their authentication services, anyone can start verifying the existence and quality of assets.

<br>

| <p><em><strong>Practical Example:</strong> Imagine a local expert in vintage cars in France who sees an opportunity to offer specialized authentication services. By registering on OAE and staking RWA , this expert can provide verification for vintage car transactions in their region. This capability not only enhances the trust and transparency of asset transactions but also supports local economies by enabling experts to leverage their knowledge for a broader market reach.</em></p><p><br></p> |
| ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |


# Green Impact

### <mark style="color:orange;">Guardianship of Endangered Species</mark>

\
OAE introduces a unique campaign for the conservation of endangered species by enabling individuals or organizations to become guardians rather than owners of these animals. This model focuses on the protection and sustainable management of wildlife.

<br>

| ***Practical Example:** Through OAE, endangered species are onboarded as assets with specific individuals or organizations appointed as guardians. Upon becoming a guardian, a person or entity is entrusted with the responsibility for the well-being of the animal. They receive access to a GPS tracker to monitor the animal's movements and are allowed to use their guardianship status for marketing purposes, helping to raise awareness and support for conservation efforts. This guardianship does not imply ownership of the animal but rather a stewardship role, promoting ethical engagement and support for endangered species.* |
| ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |

\ <br>

### <mark style="color:orange;">Tokenization of Carbon Certificates</mark>

\
OAE offers a platform for the tokenization of carbon certificates, enhancing the flexibility and accessibility of trading these environmental assets. This system supports infinite, multi-level tokenization, expanding beyond the capabilities of traditional single-tier carbon projects.

<br>

| ***Practical Example:** Organizations or individuals looking to contribute to carbon offsetting initiatives can use OAE to onboard carbon certificates. Once onboarded, these certificates can be tokenized at multiple levels, allowing for a broad range of investment sizes and types. This multi-level tokenization means that smaller investors can participate by purchasing fractions of a certificate, while larger investors might invest at higher tiers. This system not only increases the liquidity of carbon credits but also makes it easier to match supply with demand, offering a more dynamic and accessible market compared to narrower scope projects.* |
| ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |


# Software, Gaming and Entertainment

### <mark style="color:orange;">Usage Tokens for Software and Apps</mark>

\
OAE enables the tokenization of usage rights for software applications, creating a flexible and scalable method for managing access and billing based on actual usage.

<br>

| ***Practical Example:** A software development company decides to offer its latest project management tool through a token-based system. Customers purchase usage tokens which are then consumed based on the time they spend using the software or the features they access. This model allows for microtransactions, where users only pay for the amount of software interaction they need, rather than purchasing a flat-rate subscription. The tokenized system ensures a transparent and fair billing method that aligns costs directly with usage, benefiting both the provider and the users by offering flexibility and control over software expenditure.* |
| ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |

\ <br>

### <mark style="color:orange;">Subscription Access Tokens for Digital Property</mark>

\
OAE enables the tokenization of access to digital media platforms, such as domains or streaming services, by issuing tokens that provide a specific period of premium access.

<br>

| ***Practical Example:** A popular streaming service decides to implement a token-based subscription model using OAE. Users purchase access tokens that grant one month of premium viewing on the platform. Each token represents a set period of access and expires once the month is over. This method offers users the flexibility to buy as many months of service as they desire upfront or on a need-to-use basis. The tokenized subscription ensures easy management of user access and provides a scalable and secure way to handle payments and subscriptions for digital media services.* |
| -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |

\ <br>

### <mark style="color:orange;">Management and Tokenization of Sports and Entertainment Assets</mark>

\
OAE offers a robust platform for managing contracts, royalties, and digital rights in the sports and entertainment industries. Additionally, it supports the tokenization of ownership stakes in sports teams, providing new opportunities for investment and engagement.

\ <br>

| ***Practical Example:** An entertainment company uses OAE to manage the contracts and royalties of various artists under its label. Through the platform, these contracts are digitized, allowing for automatic calculation and disbursement of royalties based on predefined terms. Simultaneously, a sports franchise decides to tokenize a percentage of its ownership. Fans and investors can purchase these tokens, which not only provide them with a stake in the team's financial success but also grant special privileges like voting on team decisions or exclusive access to games and events. This dual approach not only streamlines administrative processes but also enhances fan engagement and opens new revenue streams for teams and artists alike.* |
| ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |

\ <br>

### <mark style="color:orange;">Legal Ownership of In-Game Assets</mark>

\
OAE revolutionizes the ownership model of in-game assets by tokenizing these assets on the blockchain, thus granting players legal ownership rather than mere licensed use as per traditional End User License Agreements (EULA).

<br>

| <p><em><strong>Practical Example:</strong> A gaming company develops an online multiplayer game where items, skins, and characters can be purchased or earned through gameplay. Traditionally, these assets would be covered under a EULA, with players having limited rights, essentially leasing the assets from the game developer. Using OAE, the company tokenizes these in-game assets, recording them on the blockchain.</em></p><p><br></p><p><em>This transition means that when players acquire in-game assets, they receive a digital token representing legal ownership of the item. These tokens confer actual property rights over the in-game assets, allowing players to buy, sell, or trade their assets as they would physical property. Ownership is verifiable and secure, maintained on an immutable blockchain ledger, thus ensuring that players can exercise full control over their digital properties. This method enhances player engagement and investment in the game, as it provides tangible value and real ownership of their in-game achievements and purchases.</em></p><p><br><br></p> |
| ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |


# Global Transparency and E-Administration

### <mark style="color:orange;">Supply Chain Integration Using Blockchain</mark>

\
OAE enhances supply chain management by utilizing blockchain technology to track and verify the entire journey of products, from raw materials to finished goods. This system provides an immutable record that increases transparency, reduces the potential for fraud, and ensures adherence to environmental and ethical standards.

\ <br>

| ***Practical Example:** A clothing manufacturer decides to integrate OAE's blockchain technology into its supply chain. Each step, from cotton sourcing to garment manufacturing, is recorded on the blockchain. This includes data from suppliers, production times, and shipping details. Retailers and consumers can access this information to verify the ethical sourcing and production of the garments. This transparency not only builds trust with consumers but also helps the manufacturer monitor compliance across its supply chain, ensuring that all processes meet the company's standards for sustainability and ethical practices. This approach not only aids in regulatory compliance but also enhances brand reputation by providing a clear, traceable path of production to end-users.* |
| -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |

\ <br>

### <mark style="color:orange;">Tokenization in Healthcare and Pharmaceuticals</mark>

\
OAE provides a secure platform for tokenizing and managing healthcare records and pharmaceutical logistics. This approach ensures the privacy and security of medical data while enhancing the efficiency of drug supply chain management.

<br>

| <p><em><strong>Practical Example:</strong>  A hospital network decides to utilize OAE to tokenize patient health records. Each patient’s record is converted into a secure digital token, which encapsulates all medical data while ensuring that access is strictly controlled through cryptographic permissions. This tokenization ensures that patient information remains confidential and is only accessible to authorized medical personnel, enhancing data security and patient privacy.</em></p><p><br></p><p><em>Simultaneously, a pharmaceutical company uses OAE to manage its drug supply chain. Each batch of medication is accompanied by a digital token that records every step of its journey, from production through distribution to pharmacies. This token includes critical data such as manufacturing dates, batch numbers, storage conditions, and transit details. The tokenized data stream provides a transparent and tamper-proof record, helping to prevent counterfeit drugs from entering the supply chain and ensuring that compliance standards are met at every stage. This system not only improves operational efficiency but also enhances patient safety by ensuring the authenticity and proper handling of medications.</em></p><p><br></p> |
| ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |

\ <br>

### <mark style="color:orange;">Tokenization of Government Services</mark>

\
OAE enables the tokenization of government assets and the automation of public sector services such as registrations, licensing, and voting systems. This innovative approach significantly enhances transparency and efficiency within government operations.

<br>

| <p><em><strong>Practical Example:</strong> A local government decides to implement OAE to manage its vehicle registration and licensing services. Each vehicle registration and license is represented as a digital token on the blockchain. This tokenization not only streamlines the registration process but also makes it easier for officials to update and verify information securely and instantly. It also reduces paperwork and the administrative burden, leading to cost savings and improved service delivery to citizens.</em></p><p><br></p><p><em>Furthermore, the same government explores the use of OAE for their voting system. Voter registrations are tokenized, and voting tokens are distributed to eligible voters. Each token represents a vote, ensuring that the voting process is both secure and transparent. The blockchain records each vote immutably, preventing tampering and ensuring that every vote is counted accurately. This use of technology enhances the integrity of elections and boosts public trust in the electoral process by providing a clear, verifiable record of each vote cast.</em></p> |
| ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |


# RWA (OAE) Token Economy 1.0

Tokenized economy of Onchain Assets Environment, fueled by Real World Assets (RWA) Token.

<mark style="color:orange;">**Introduction**</mark>

In the world of decentralized finance (DeFi), Xend Finance has always been at the forefront, merging the reliability of traditional finance with the innovation of DeFi. This blend is a clear indication of the platform's commitment to making financial services accessible to everyone through blockchain technology.

Despite the ups and downs in the broader crypto space, Xend Finance's growth from a blockchain project to a leader in crypto banking has been marked by expansion and user adoption. With its reach extending into new markets and attracting over 150,000 savers, the platform proves the demand for its financial solutions.

A key development in Xend Finance's journey is the transition of its native token from XEND to RWA, signaling a shift towards including real-world assets in its ecosystem. This step highlights the platform's ambition to bridge the digital finance world with physical assets, bringing real-world utility and significance to the token economy.

In March 2024, Xend Finance introduced a new vision with the publication of its [whitepaper ](https://whitepaper.xend.finance/)on the Onchain Asset Environment (OAE) and Asset Chain. This document outlines the platform's plans for a tokenized economy that leverages the RWA token. The OAE and Asset Chain are about creating a system where assets are digitized on the blockchain, ensuring that every asset can be verified and securely managed within a global digital framework. The RWA token is positioned as the backbone of this new economy, aimed at encouraging participation and value creation within the Xend Finance ecosystem.

As Xend Finance works towards the goals set out in its latest whitepaper, the upcoming versions, Xend V2 and V3, are set to deliver a comprehensive and innovative platform for blockchain asset management. This move not only redefines the token economy but also aims to make financial systems more inclusive and accessible to everyone.

Building on this foundation, the document goes further, showing the important role of Xend Finance's RWA token in creating a rewards-based economy within this system.

\ <br>


# RWA Token

### <mark style="color:orange;">Token Performance</mark>&#x20;

In the evolving landscape of Xend Finance's token ecosystem, the RWA token has marked significant milestones as of March 2024, evidenced by its performance metrics and strategic deployments across various blockchain networks.

RWA token is now available on the blockchains listed below, under respective token hashes:&#x20;

* **Arbitrum**: **0x36fe11b6d5c9421f68d235694fe192b35e803903**
* Ethereum: 0x4563554284aA7148D6E6D0351519E954Ba3B6E02
* Binance Smart Chain (BSC): 0x36fe11b6d5c9421f68d235694fe192b35e803903
* Polygon: 0x36fe11b6d5c9421f68d235694fe192b35e803903

It’s worth highlighting that Arbitrum has been chosen as  RWA ‘blockchain of choice’ when it comes to creating and supporting RWA trading liquidity depth.&#x20;

### <mark style="color:orange;">RWA Interoperability</mark>

Currently, RWA enjoys seamless interoperability across four major blockchain networks, facilitated by&#x20;

* dedicated [RWA bridge](https://bridge.xend.finance/) operated by the Xend Finance team,&#x20;
* support for deposits and withdrawals via Gate.io.&#x20;

Looking ahead, the strategic vision for RWA encompasses significant milestones aimed at broadening its utility and accessibility:

* Omni-Chain Presence: RWA is set to expand its reach, becoming tradable and migratable across all major blockchain platforms. This initiative will enhance its integration within the broader blockchain ecosystem, offering unparalleled versatility to users.
* Decentralized Finance (DeFi) Integration:  RWA will gradually appear on more decentralized exchanges and lending platforms.&#x20;
* Expansion across Centralized Exchanges: Plans are in place to list RWA on additional centralized exchanges, increasing its visibility and trading volume. This move is expected to further solidify its market presence and appeal to a wider investor base.
* Fiat Conversion through Xend Bank: A pivotal development will be the introduction of fiat conversion for RWA at Xend Bank. This feature will bridge the gap between traditional banking and digital assets, offering users a straightforward pathway to enter and exit the market.

\
Integration with Payment Cards: In a significant leap towards mainstream adoption, RWA will be integrated directly with payment cards and payment apps. This functionality will allow for direct staking of the token on these cards, enabling it to be used for everyday payments. This move marks a transformational step in leveraging blockchain technology for practical, real-world applications.


# RWA Economy Ecosystem Participants

Below table summarizes all OAE and RWA ecosystem participants, added value they are expected to bring into the ecosystem and the added value they expect from it&#x20;

**Table 2** - RWA economy ecosystem participants&#x20;

| Participant Type                                        | Added Value to the Ecosystem                                                                                                                                                                                                                                    | Expected Value from the Ecosystem                                                                                                                                                                                       |
| ------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| Xend ID & Wallet Owners                                 | Use wallets to manage assets, engage in transactions, and interact with the ecosystem's services. Every wallet is linked with user Xend ID.                                                                                                                     | Secure and user-friendly asset management, integration with various ecosystem services                                                                                                                                  |
| IAC Providers                                           | Integrate real-world assets and services, bridging traditional property layer with web3 property layer.  Inducing RWA buy pressure and staking tokens as part of reputation score buildup.                                                                      | Gain service fees, access to a broad user base, and strategic partnerships, becoming exclusive local IAC providers as part of progressive synchronization campaign.                                                     |
| Asset Authenticators                                    | Validate the authenticity and legal status of assets being onboarded into the ecosystem, ensuring trust and credibility.                                                                                                                                        | Fees for authentication services, enhanced reputation within the ecosystem, and the opportunity to contribute to the ecosystem's security.                                                                              |
| Insurance Providers                                     | Offer insurance policies for assets and tokens, adding a layer of financial security and trust for participants engaging with the ecosystem.                                                                                                                    | Premiums from insurance policies, a stake in the ecosystem's growth through the provision of essential financial security services.                                                                                     |
| Compliance Validators                                   | Ensure that assets and their tokenization comply with relevant legal and regulatory standards, enhancing the ecosystem's legitimacy and operational integrity.                                                                                                  | Fees for compliance validation services, recognition as key contributors to the ecosystem's integrity, and the establishment of trust with users.                                                                       |
| Validators                                              | Ensure transaction validity, network security, and consensus.                                                                                                                                                                                                   | Receive transaction fees and staking rewards.                                                                                                                                                                           |
| Appraisers                                              | Enhance the ecosystem's trust and transparency by providing accurate valuations for assets, ensuring that financial activities are based on reliable asset assessments.                                                                                         | Recognition as trusted professionals, compensation for valuation services, and opportunities for engagement in a wide range of ecosystem activities requiring expert asset evaluations.                                 |
| Custodians                                              | Ensure the integrity and safety of physical or digital assets within the ecosystem, supporting the ecosystem's credibility and reliability for asset-backed activities.                                                                                         | Fees for custodial services, recognition for contributing to the ecosystem's security and trustworthiness, and opportunities for partnerships with other ecosystem participants requiring secure asset custody.         |
| Other Service Providers                                 | Offer various services within the ecosystem, enhancing user experience and functionality.                                                                                                                                                                       | Gain service fees, access to a broad user base, and strategic partnerships.                                                                                                                                             |
| Asset admins / onboarders                               | Create and manage digital representations of real-world or digital assets on the blockchain.                                                                                                                                                                    | Benefit from asset tokenization, access to a global market, enhanced liquidity, intrinsic legal compliance. Access to providers social hub, IAC providers and Origin Studio for token issuance and on-chain management. |
| OAE Token Holders (any tokens)                          | Invest in the ecosystem and as such - increasing Total Value Locked within the OAE framework, and the transaction volume handled by it.  Increase the overall user base of OAE, act as a final ‘user-customer’, driving the widespread adoption of the product. | OAE Assets appreciation, access to investment opportunities, and verifiable, compliant digitized property ownership.                                                                                                    |
| RWA stakers                                             | Provide liquidity, security, and stability through token staking.                                                                                                                                                                                               | Earn rewards, increase in token value, and access to premium features or contribution roles.                                                                                                                            |
| Market Makers and Investors                             | Provide liquidity to asset markets and invest in assets and tokens within the ecosystem, contributing to market depth and financial stability.                                                                                                                  | Return on investment through asset appreciation, dividends, or interest payments, and influence in the ecosystem through significant investments.                                                                       |
| P2P borrowers                                           | Increase the ecosystem's dynamism by using diverse lending opportunities and demonstrating the practical utility of digital assets as collateral.                                                                                                               | Access to flexible, secure loans with competitive terms, leveraging their digital assets for financial needs without liquidating them.                                                                                  |
| P2P lenders                                             | Provide essential liquidity, enabling the ecosystem's credit mechanisms and supporting the financial activities of other participants.                                                                                                                          | Reliable returns on investments through interest on loans, secured by asset based collaterals, and a robust platform for managing lending risks.                                                                        |
| Fundraisers                                             | Drive innovation and growth within the ecosystem by initiating new projects or businesses directly within the OAE framework  enhancing the ecosystem's vibrancy and diversity.                                                                                  | Access to a wide pool of potential investors, streamlined fundraising processes, and the ability to secure funding through tokenized assets and equity.                                                                 |
| <p>Investors on Fundraising Platform</p><p><br><br></p> | Contribute to the ecosystem's capital flow, support emerging projects or businesses, and validate the ecosystem's potential for generating viable investment opportunities.                                                                                     | Opportunities for strategic investments with clear risk-reward profiles, participation in the growth of the ecosystem, and potentially high returns through equity, dividends, or interest.                             |

<br>

Please also refer to the chart on the next below providing more details on OAE ecosystem participants and their relations with each other and with the ecosystem. \ <br>

<figure><img src="https://lh7-us.googleusercontent.com/j4GyBXIDDC-n_v4kZfZ6bXFOZhBF7JEdDE40wpMppPG0HPCsZUiKD7orvAAqYleOp3mcgEtR09br2EQra5xqAdlBkNyH0K5sGhKgEDmJ1vAXzYF--d3lBKHhsNBkZEcuIPlCTHWeusqdmvqr4Pq1zbU" alt=""><figcaption><p> - RWA economy ecosystem participants </p></figcaption></figure>

##

<br>


# RWA Staking

The OAE framework introduces a unified staking mechanism, compatible with [Xend OAE wallets](https://whitepaper.xend.finance/2.0-oae-onchain-assets-environment/2.3-oae-products-overview/2.3.6-xend-solutions) and [Xend Exchange wallets](https://whitepaper.xend.finance/2.0-oae-onchain-assets-environment/2.3-oae-products-overview/2.3.6-xend-solutions), designed to foster participation and support within the ecosystem.

There are 2 staking vaults with 4 distinct RWA staking options available in the OAE environment, each offering unique benefits and conditions&#x20;

1. Staking vault, offering:&#x20;

   1. Standard staking&#x20;
   2. Lockups

2. PoS staking vault, offering:&#x20;
   1. PoS staking&#x20;
   2. PoS lockups &#x20;

<br>

### Standard Staking&#x20;

In the OAE framework, RWA Standard Staking involves participants moving their RWA tokens into a specialized vault. Upon staking their tokens, participants start aggregating [staking score](https://docs.google.com/document/d/1jwR74ckGcNiMUKXLWB85t3nf21aPLTm229dbxlt9uEA/edit#heading=h.md0sfsdii26q), which quantifies their contribution based on the duration and amount of tokens staked. <br>

The staking score is a crucial metric in the OAE framework, determining a participant's position within the ecosystem, features accessibility and the amount of RWA rewards they qualify for.

Participants can withdraw their tokens after a 48-hour cooldown period, counting from the time tokens have been staked.&#x20;

<br>

### RWA lockups

RWA Lockups offer participants the option to commit their RWA tokens to a lockup period ranging from 1 to 12 months. This form of staking is designed for those willing to secure their tokens over a predefined timeframe, enhancing the ecosystem's stability.

Upon initiating a lockup, participants immediately receive a [staking score](https://docs.google.com/document/d/1jwR74ckGcNiMUKXLWB85t3nf21aPLTm229dbxlt9uEA/edit#heading=h.md0sfsdii26q) equivalent to what would be accumulated over the selected lockup duration. This approach ensures that the contribution is instantly recognized, although the accrual of the staking score pauses until the end of the lockup period, unless the maximum duration of 12 months is chosen.

Should participants decide to exit the lockup before the completion of the term, a 30% early exit fee is applied, calculated proportionally to the remaining duration of the lockup. This fee structure is intended to incentivize long-term commitment within the ecosystem, directly impacting the stability and security of the token economy.

Notably, once the lockup period expires, the mechanism automatically transitions the tokens into Standard Staking.

<br>

### RWA PoS Vault

RWA PoS Staking operates similarly to standard staking and lockups  but with specific adjustments  geared towards validators.&#x20;

**PoS deposit requirement**

Deposit to PoS vault is permissible if the total deposited amount meets predefined PoS minimum threshold or its multiplier (if validator runs more than 1 node).  For example, if the minimum requirement for RWA tokens deposit to operate a validation node is set at 100,000 RWA, then only that amount, or its multiplication by natural numbers (e.g. 200k, 300k and so on) can be transferred to the PoS vault. It is not permissible to deposit an arbitrary amount to PoS vault such as e.g. 256,000 RWA tokens; the transfer must align with the required threshold for whole nodes, meaning either 200,000 RWA for two nodes or 300,000 RWA for three nodes. Validators wishing to stake amounts that don't meet these precise multiples have the option to engage in standard staking or lockup for the excess tokens.

**Withdrawal and unlocking protocol**

Withdrawals and unlocking procedure for PoS vault follow the same protocol as standard staking and lockups.&#x20;

**Slashing**

PoS stakes are subject to slashing in instances of validator misbehavior or not meeting specific quality and uptime criteria.<br>

**Single ID rule**

Each PoS staked amount is distinctly associated with a specific node and validator identity. Validators can operate multiple nodes under a single KYC ID, however a single identity is never allowed to validate a block twice, preserving the system's integrity.

**Deposit threshold**

The RWA stake needed to operate a single node will be set and adjusted periodically by Xend Finance, based on the network's changing needs and participant feedback. The threshold for PoS deposits required to run a validation node is separate from the staking score logic. While validators can lock in their PoS deposits to accelerate their staking score growth, the act of locking does not affect the minimum deposit requirement for node operation.

**PoS Consensus**

The consensus mechanism in the Asset Chain, especially in its current version, does not adhere to a conventional DAO protocol. Validators are not part of a dedicated DAO and do not participate in any voting on changes to the blockchain's core functionalities, including consensus rules and reward structures.&#x20;

However, with the transition to V3 and validators operating through Xend browsers, the governance model may evolve, particularly as local IAC councils come into play. These councils could lead to a more localized management of the consensus and governance, tailored to meet regional regulatory and infrastructure requirements. For more details, please refer to [progressive synchronization campaign](https://whitepaper.xend.finance/4.0-progressive-synchronization-v3) section of the whitepaper.&#x20;

Future details related to the PoS consensus model, including detailed block validation procedures and operational protocols, will be addressed in a dedicated technical document to be released by Xend Finance.

### Staking Types - Visual Summary <br>

For a comprehensive understanding of the staking mechanics within the OAE framework and their characteristics, please refer to the chart below.<br>

<figure><img src="https://lh7-us.googleusercontent.com/y8rFi7SpZwXbIVnNV6Q-eEhf8N6idHshb2i3StSSbdRp9uPTkYF-D4oHjxxoyLQP6R-8aK7sKlAa9HjMZ3T0YSDxZIkp5Hn0-VSeHRfvMWDn5I3bbOFfBUw0jAwb88zU8wZ9JF4VwnBPKQwUejz3ckc" alt=""><figcaption><p> - RWA staking types</p></figcaption></figure>

##


# RWA Incentives

### Staking Score

The staking score within the OAE framework is a dynamic metric and is derived from the average amount a user has staked over the last 12 months.&#x20;

Lockup of RWA tokens provides  an instant increase in that score reflecting the lockup period, followed by the pause of the staking score accrual that lasts until the end of the lockup period (unless the maximum duration of 12 months is chosen in case of which he instant gain of staking score is equal to the maximum achievable gain for the given locked amount).&#x20;

| <p><em><strong>Example 1:</strong></em> </p><p><br></p><p>User locks in 1200 RWA tokens for a month. His staking score instantly increased by 120. Following this initial period, the staking score remains static for the next month (unless other staking deposits are made). Once the 1 month lockup period is over, the lockup will be automatically converted to standard staking and over the subsequent 11 months, the score will gradually increase from 120 to 1200, aligning with the total staked amount.</p><p><br></p><p><em><strong>Example 2:</strong></em> </p><p><br></p><p>John consistently stakes 1000 RWAABC tokens over a year. With a staking score based on a 12-month average, John’s score equals 1000. Matthew, attempting to quickly boost his score, stakes 6000 RWA tokens for a month, achieving a staking score of 500 (6000/12\*1)  Despite Matthew's larger stake, John's longer-term commitment yields a higher score, illustrating the system's preference for sustained staking.</p> |
| ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |

\ <br>

**Key Points to Note:**

* Users can increase their stake at any time.
* Withdrawals must encompass the entirety of the staked amount; partial withdrawals aren't allowed, to prevent gaming the system.
* Withdrawing resets the staking score to zero.
* Users may initiate multiple lock-ups, subject to a minimum staking threshold for each.
* Lock-up periods can be upgraded to extend the duration, which resets the lock-up timeframe.
* Lock-ups operate independently from standard staking and from one another. Users can hold multiple distinct lock-ups, such as 1000 RWA for 1 month and 5000 RWA for 6 months. Each lock-up can be exchanged or ended early on its own.
* The staking scores from various vaults accumulate, reflecting the total RWA staking score associated with a user's Xend ID.

<br>

The following 3 tables illustrate how staking score behaves in different scenarios - standard staking, 6 month lockup and 12 months lockup.&#x20;

| Month | Total Staked | Staking Score |
| ----- | ------------ | ------------- |
| 1     | 1000         | 83.3          |
| 2     | 1000         | 166.7         |
| ...   | 1000         | ...           |
| 12    | 1000         | 1000.0        |

*- Standard staking - staking score accrual*\ <br>

| Month | Format           | Deposit amount | Lockup time | Staking score | Event                          |
| ----- | ---------------- | -------------- | ----------- | ------------- | ------------------------------ |
| 1     | Lockup           | 1000           | 6           | 500           | Instant gain of staking score  |
| 2     | Lockup           | 1000           | <p><br></p> | 500           | <p><br></p>                    |
| 3     | Lockup           | 1000           | <p><br></p> | 500           | <p><br></p>                    |
| 4     | Lockup           | 1000           | <p><br></p> | 500           | <p><br></p>                    |
| 5     | Lockup           | 1000           | <p><br></p> | 500           | <p><br></p>                    |
| 6     | Lockup           | 1000           | <p><br></p> | 500           | Conversion to standard staking |
| 7     | Lockup           | 1000           | <p><br></p> | 583.3         | <p><br></p>                    |
| 8     | Standard staking | 1000           | <p><br></p> | 666.7         | <p><br></p>                    |
| 9     | Standard staking | 1000           | <p><br></p> | 750           | <p><br></p>                    |
| 10    | Standard staking | 1000           | <p><br></p> | 833.3         | <p><br></p>                    |
| 11    | Standard staking | 1000           | <p><br></p> | 916.7         | <p><br></p>                    |
| 12    | Standard staking | 1000           | <p><br></p> | 1000          | <p><br></p>                    |

&#x20;*- Statking score accrual in 6 month lockup*\ <br>

| Month | Format | Deposit amount | Lockup time | Staking score | Event                         |
| ----- | ------ | -------------- | ----------- | ------------- | ----------------------------- |
| 1     | Lockup | 1000           | 12          | 1000          | Instant gain of staking score |
| 2     | Lockup | 1000           | <p><br></p> | 1000          | <p><br></p>                   |
| 3     | Lockup | 1000           | <p><br></p> | 1000          | <p><br></p>                   |
| 4     | Lockup | 1000           | <p><br></p> | 1000          | <p><br></p>                   |
| 5     | Lockup | 1000           | <p><br></p> | 1000          | <p><br></p>                   |
| 6     | Lockup | 1000           | <p><br></p> | 1000          | <p><br></p>                   |
| 7     | Lockup | 1000           | <p><br></p> | 1000          | <p><br></p>                   |
| 8     | Lockup | 1000           | <p><br></p> | 1000          | <p><br></p>                   |
| 9     | Lockup | 1000           | <p><br></p> | 1000          | <p><br></p>                   |
| 10    | Lockup | 1000           | <p><br></p> | 1000          | <p><br></p>                   |
| 11    | Lockup | 1000           | <p><br></p> | 1000          | <p><br></p>                   |
| 12    | Lockup | 1000           | <p><br></p> | 1000          | <p><br></p>                   |

*- Satking score accrual in 12 month lockup*

<br>

### RWA Levels

Increasing staking score unlocks higher 'RWA level' associated with Xend IDs. There are 10 RWA levels, and the benefits of advancing through them include:

* Discounts and bonuses in the OAE environment.
* Access to exclusive features.
* The eligibility to act as :&#x20;
  * Service Provider in the Social Hub.
  * IAC provider.
  * Asset Chain validator.
* A range of benefits and enhanced rewards.

<br>

Please refer to the table on the next page providing a comprehensive overview of anticipated staking score requirements for RWA levels and benefits associated with them.\ <br>

| RWA level | Staking score | Social Hub Provider Account Access | IAC provider Account access | OAE transaction fees discount | <p>Xend Solutions fees discount</p><p><br></p> | Cashback (Xend Card, NodePay) | P2P max loan limit (borrower and lender) | Initial Premium MPG | GOR API discount | Fundraiser account access and fundraise limit | Validator Account Access |
| --------- | ------------- | ---------------------------------- | --------------------------- | ----------------------------- | ---------------------------------------------- | ----------------------------- | ---------------------------------------- | ------------------- | ---------------- | --------------------------------------------- | ------------------------ |
| 1         | 1 000         | -                                  | -                           | 2%                            | 1%                                             | 0.5%                          | $1 000                                   | $0.01               | 5%               | -                                             | -                        |
| 2         | 2 500         | -                                  | -                           | 4%                            | 2%                                             | 1%                            | $2 500                                   | $0.015              | 10%              | -                                             | -                        |
| 3         | 5 000         | -                                  | -                           | 6%                            | 3%                                             | 1.5%                          | $5 000                                   | $0.002              | 15%              | -                                             | -                        |
| 4         | 10 000        | Standard account                   | -                           | 8%                            | 4%                                             | 2%                            | $10 000                                  | $0.025              | 20%              | -                                             | -                        |
| 5         | 15 000        | Standard account                   | -                           | 10%                           | 5%                                             | 2.5%                          | $15 000                                  | $0.03               | 25%              | $25 000                                       | -                        |
| 6         | 25 000        | Standard account                   | -                           | 12%                           | 6%                                             | 3%                            | $25 000                                  | $0.035              | 30%              | $50 000                                       | -                        |
| 7         | 50 000        | Standard account                   | -                           | 14%                           | 7%                                             | 3.5%                          | $50 000                                  | $0.04               | 35%              | $100 000                                      | yes                      |
| 8         | 100 000       | Premium account                    | Standard account            | 16%                           | 8%                                             | 4%                            | $100 000                                 | $0.045              | 40%              | $250 000                                      | yes                      |
| 9         | 200 000       | Premium account                    | Standard account            | 18%                           | 9%                                             | 4.5%                          | $200 000                                 | $0.05               | 45%              | $500 000                                      | yes                      |
| 10        | 400 000       | Premium account                    | Premium account             | 20%                           | 10%                                            | 5%                            | $400 000                                 | $0.055              | 50%              | No limit                                      | yes                      |

&#x20;*- RWA levels and related benefits* <br>

Note: Xend Solutions fee discount encompass:&#x20;

1. Xend Exchange order book discount on maker and taker fees
2. Xend Exchange liquidity pool discount on LP fees
3. Off/on-ramp fees
4. Banking fees
5. Omni-bridge fees

### RWA Rewards & Logarithmic Distribution&#x20;

Xend Finance will secure a specific portion of its current total RWA supply to fund a new RWA staking rewards initiative (the exact amount is yet to be announced separately). These rewards will be distributed  proportionately among stakers, based on their staking score.&#x20;

The reward distribution follows a logarithmic curve, ensuring a gradual reduction in the reward amount by a predetermined percentage (e.g., 0.3%) after each distribution epoch. This approach guarantees a sustainably decreasing rewards curve without the need for manual adjustments by the Xend Finance team, theoretically allowing for an infinite reward distribution timeline.

Please refer to the chart below visualizing how RWA rewards distribution would be like assuming weekly distribution epochs, with a decrease rate of 0.3% per epoch, and beginning amount of distributed RWA tokens set to 100 000.&#x20;

<figure><img src="https://lh7-us.googleusercontent.com/tBtkaacvW-CndsWv1X-UGqNmZKYycsm2Ps72lZOB524oK6NXJepLZqszbeQ1q47FDuQ_S6cKXNAmv33Hna-IEcsrLDIdHflTw2VSHj7qH6FKuK-IjJYvGB4n4ynunmZv8iduwgpDeboDYCehO5uierY" alt=""><figcaption><p> - Logarithmic rewards distribution curve example</p></figcaption></figure>

The rewards curve, designed to be theoretically infinite, can extend for many years. It will continue until the total rewards available are too low to cover transaction fees (gas costs), at which point the distribution pauses until the rewards pool is refilled. The example model above visualizes a successful distribution of approx. 31.6 million RWA tokens over 2.5 years.

**Key Points to Note:**

* A reduction in the total reward amount of rewards distributed does not directly imply a decrease in the Annual Percentage Rate (APR) of rewards. Should some users withdraw their stakes, the competition for rewards lessens, potentially increasing the APR for remaining participants.<br>
* This system introduces a self-regulating economic model that naturally adjusts to offer a fair rewards APR, aligning with market expectations and maintaining equilibrium among stakers.<br>
* The reduction in the quantity of distributed tokens is potentially neutralized by future increases in the market price of RWA tokens. This means that although stakers may receive fewer tokens over time, the economic value of these tokens could remain stable or even increase, counterbalancing the decrease in quantity.<br>

### Validators Revenue&#x20;

In addition to staking rewards, validators will participate in distribution of RWA transaction gas fees generated on  Asset Chain and Xend Connect.

This model diverges from traditional blockchain practices, as fees collected from these transactions are first accumulated in the Xend Finance treasury before being periodically distributed to validators. The allocation to validators is influenced by their staking scores, performance and dependability of their nodes, focusing on metrics like uptime and validation quality.&#x20;

Utilizing time-based participation metrics, the validators' revenue distribution system is structured to discourage validators from setting up their nodes just before an impending revenue distribution. This ensures a fairer and more equitable allocation of rewards, based on longer-term participation rather than strategic timing.

It's important to highlight that a single Xend ID can operate multiple independent nodes, provided the PoS staking requirements are met, potentially enhancing the validator's revenue and staking rewards.

\ <br>


# RWA LP Tokens, Market Makers, & Trading Competitions

#### RWA LP Tokens

The incentivization of RWA LP token holders is not a default feature of the OAE economy. Instead, the Xend Finance team will announce specific campaigns aimed at bolstering the liquidity and trading depth of RWA tokens as necessary. Without active campaigns, RWA LP tokens will not be eligible for staking in the vault.<br>

| <p><em><strong>Example</strong></em> </p><p><br></p><p>An example of a temporary RWA LP incentivisation campaign could be a time-limited incentives for RWA/WETH LP token holders on the Arbitrum network, offering twice as high rewards for the staked RWA/WETH LP tokens, compared to RWA staking. To be eligible for RWA/WETH LP staking, token holders would need: </p><ol><li>Deposit minimal, specific amount of  LP tokens</li><li>Commit to a lockup period of at least 6 months for deposited LP tokens.</li></ol> |
| ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |

<br>

#### Market Makers

In addition to RWA LP token holder incentives, Xend Finance may introduce periodic campaigns for market makers who contribute to trading depth by placing limit buy and sell orders on the Xend Exchange. These campaigns will detail:

1. Required order sizes.
2. Specific price ranges for orders.
3. Potential for exclusive, time-limited opportunities to place orders at prices beyond the current highest or lowest market rates.
4. Potential requirement for ‘order freeze’ i.e. placing buy and sell orders without the possibility to cancel these orders unless they are filled, or accepting cancellation fees.&#x20;

This approach aims to democratize the role of traditional order book market making, extending it to a wider community. Similar to RWA LP tokens, these incentivization policies will be  campaign-based and not automatically integrated into the OAE economy. If incentivized, order book market makers will:&#x20;

1. Receive RWA rewards
2. Participate in trading volume based revenue based on given revenue split rate&#x20;

#### Trading Competitions&#x20;

Based on prevailing needs, Xend Finance may also host seasonal trading competitions. Participants with the highest:&#x20;

* RWA tokens trading volumes
* AssetChain / XendConnect RWA transaction fees volumes

Will get the opportunity to earn additional RWA incentives, fostering an active and engaged trading environment.<br>

### RWA Incentives - Visual Summary&#x20;

Please refer to the chart below providing a comprehensive summary of how RWA incentives work within the OAE ecosystem.&#x20;

<br>

<figure><img src="https://lh7-us.googleusercontent.com/fTOuTubs5Z_eQr5_hVyjLd36hVpQTdqRRb24sJIZ3Y0I8q_9HDZmvEAmI9mPStswR_ztLaItVC88ss6gACQpFexb-UqE1VWGI0y7yUzv7fEZOd6Q2bJlkoRtLDy-cQh6ASAECFx7dNTzeaIZfL0PQY8" alt=""><figcaption><p> - RWA incentives</p></figcaption></figure>

\ <br>


# Gamification Of OAE User Experience

### Assets onboarders ranking&#x20;

Asset onboarders within the OAE are set to compete in numerous competitions and rankings, designed to reward the most impactful and desired contributions to the platform. This competitions evaluate onboarded assets based on several criteria such as:

1. TVL: The total value of assets onboarded to OAE ecosystem (‘Total value locked’) with certain minimal credibility score as qualification threshold.&#x20;
2. Trading Volume: The trading activity generated by the onboarded TVL is measured to assess impact.

Participants are season ranked globally, territorially, and by asset category, and they compete Staking rewards

(meaning every season ranking is subjected to reset and everyone gets fresh chances).  Winners are eligible for NFT rewards basket, which can include RWA tokens, stablecoins, OAE incentives, staking score multipliers,  exclusive access to premium features, and more.

This gamified framework not only incentivizes the onboarding of high-quality assets but also fosters a competitive yet collaborative environment. By rewarding significant contributions measured by TVL and related trading impact, OAE aims to drive growth and enhance liquidity on the platform.

Below examples illustrate how our gamification strategy could further enhance engagement and boost strategic asset onboarding:

| <p><em><strong>Example 1: Regional Bounties</strong></em></p><p><br></p><p>Xend Finance announces a bounty for the Southeast Asia region, specifically targeting the onboarding of green technology assets. The challenge stipulates that the first participant to successfully onboard green technology assets with a TVL exceeding $1 million, achieving a specific minimal credibility score, and generating specific minimal trading volume within this category, will win a substantial reward.</p><p><br></p><p>The winner receives a unique NFT symbolizing leadership in green technology within Southeast Asia, a 2x staking score multiplier for the next 12 months, one-off RWA rewards and a special recognition badge on their Xend Finance profile.</p><p><br></p> |
| -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |

\ <br>

| <p><em><strong>Example 2: Regional assets promotion</strong></em> </p><p><br></p><p>Noticing a low adoption rate in Australia compared to other regions, Xend Finance introduces a tailored incentive to boost engagement. The campaign offers enhanced rewards for the first five asset onboarders who reach a TVL threshold of $500,000 for assets originating from Australia, with the necessary credibility score and trading volume.</p><p><br></p><p>Winners receive a 1.5x staking score booster for 6 months, permanent reduction in Xend Exchange trading fees, and 1 year of free subscription for all features of Origin Studio. </p><p><br></p> |
| ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |

\
\ <br>

| <p><em><strong>Example 3: Dynamic Reward Adjustment for Automotive Industry</strong></em></p><p><br></p><p>To diversify OAE assets portfolio, Xend Finance launches a bounty program for the onboarding of classic and electric vehicle (EV) assets. This initiative targets asset onboarders who can introduce high-value classic cars or innovative EVs into the OAE ecosystem. The criteria for winning include onboarding assets within these categories that cumulatively reach a significant TVL, maintain a robust credibility score, and generate substantial trading volume.</p><p><br></p><p>The first onboarder to achieve a combined TVL of $2 million in either classic cars or EVs, with a high credibility score and notable trading volume, will receive a comprehensive reward package. This package includes a premium NFT featuring iconic automotive designs, a 2.5x staking score multiplier for one year, and an opportunity to feature in Xend Finance’s annual automotive investment showcase. Additionally, they will gain early access to future automotive-related investment opportunities on the platform.</p><p><br></p> |
| ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |

\
\ <br>

| <p><em><strong>Example 4: : Seasonal Incentive for Onboarding Limited Liability Companies (LLCs)</strong></em></p><p><br></p><p>To expand its asset base and attract entrepreneurial talent, Xend Finance introduces an incentive program for business owners to onboard their limited liability companies (LLCs) as investable assets. This program is designed to attract high-potential startups and established businesses looking for alternative funding routes or investment opportunities. The key criteria for this bounty include successfully onboarding an LLC with a proven track record, demonstrating financial stability through audited financial statements, and generating a predefined minimum annual revenue.</p><p><br></p><p>The first 50 business owners to onboard their LLC, meeting the program's financial benchmarks and securing a high credibility score, will be awarded a multifaceted rewards package. This package comprises a 3x staking score multiplier applicable for 18 months, a specialized NFT symbolizing entrepreneurial success within the OAE ecosystem, and a spotlight feature in Xend Finance’s newsletter and on the platform. Additionally, the winning business owner will receive exclusive access to a network of investors and advisors within the Xend Finance community, aimed at fostering business growth and collaboration opportunities.</p><p><br></p> |
| --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |

<br>

<figure><img src="https://lh7-us.googleusercontent.com/8KM0HthS6uRA9fTpZKlHOe_gIIH21K6XelcR5ocSc-JzL2au88sJ2bww25EMgEZjN1kml5JuqNE5Qy9yKyLnHaJZX5yyezCRCCsVogdLrnwtqzkuTHY8FQnNffYL5U8zv1dxgKcXdlY1dGwghn8obys" alt=""><figcaption><p> -  Assets onboarders rankings</p></figcaption></figure>

###

### Referral campaigns Overview

####

**Referral Campaigns**

Referral campaigns within the OAE ecosystem are designed to incentivize the expansion of our network through personal recommendations. Participants can earn a percentage-based commission on various revenue streams generated by those they refer, including:<br>

* **OAE Ecosystem Revenue:** A share of the overall revenue generated within the OAE ecosystem by the referred providers or onboarders.
* **Xend Solutions Revenue:** Earnings from the revenue produced through Xend solutions by referred users.
* **Rewards for Onboarders:** Incentives specifically allocated to those who onboard new participants successfully.

#### Referral Competition

<br>

The competition is structured into three distinct categories to cater to various aspects of network growth and performance:

* **Total Referred Validators & PoS Contributions:** This measures the number of validators brought into the network by a referrer, based on their PoS contributions.<br>
* **Total TVL from Referred:** Accounts for the cumulative value locked within the platform, attributable to referred users
* **Total Revenue Made by Referred:** Evaluates the economic impact of referred users based on the revenue they generate within the ecosystem and RWA fees they pay back to the OAE.&#x20;

Points are awarded in each category using specific multipliers to reflect the differing value contributions of each aspect. The total points will determine the winner for each season, a frequency that is yet to be established.

\ <br>


# RWA Token Utilities

## RWA token utilities

\
**Utilities summary**

RWA has multiple utilities within the OAE framework, please refer to the table below, summarizing each.&#x20;

<br>

| **Utility**                                                         | **Description**                                                                                                                                                                                                                                                                                                                                               |
| ------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| **Transaction fees**                                                | <p>AssetChain & Xend Connect transactions, including e.g. </p><ol><li>Minting assets</li><li>Transactions </li><li>Event mirror execution </li></ol><p><br></p>                                                                                                                                                                                               |
| **Means of staking**                                                | RWA is used for staking, which is prerequisite for receiving rewards, and possibility to become network validator                                                                                                                                                                                                                                             |
| <p><strong>Means of engagement appreciation</strong></p><p><br></p> | RWA staking is used to calculate staking score, which in turn is used as the main metric measuring users engagement, which in turn is translatable into the user levels, associated with a wide range of benefits.                                                                                                                                            |
| <p><strong>Means of rewards distribution</strong></p><p><br></p>    | <p>RWA is the main token used by the Xend Finance team,  as a means of incentivizing OAE users and promoting preferred users' activities and behaviors. </p><p><br></p>                                                                                                                                                                                       |
| **Optional means of payment**                                       | <p>RWA can be used as optional means of payment for multiple transactions and operations within OAE framework, including: </p><ol><li>Origin studio subscription fees</li><li>Fees for specific origin studio features</li><li>Marketplace transactions (if accepted by seller)</li><li>Fees related to usage of specific Xend Solutions</li></ol><p><br></p> |
| **Reputation score**                                                | Since staking score is translatable in reputation score, it drives relation building mechanics in OAE.  Users will tend to choose providers and partners with higher reputation scores, i.e. other users who (among other factors) stake higher RWA amounts.                                                                                                  |
| **IAC accessibility**                                               | Acting as IAC provider becomes possible only after users who wish to provide IAC services have reached required user level (which is done through gaining sufficient staking score).                                                                                                                                                                          |
| **Social hub accessibility**                                        | Activating provider accounts on OAE Social Hub will also require having a certain minimal RWA level, however in this case, requirement will be lesser than in case of IAC.                                                                                                                                                                                    |

*- RWA token utilities*

<br>

In Xend V3, staking RWA will be functionally connected (via accessibility, discounts and rewards) with Xend Browser, possibility to claim spot in specific territorial IAC council for a defined fixed amount of time, opening and managing subnets, domain registrations and more. <br>

Please refer to the chart below summarizing RWA token role in OAE ecosystem

<br>

<figure><img src="https://lh7-us.googleusercontent.com/qUAN7ZXVJhWht4SU-BatSNylbXh_awKEmOPcYbA7wVGoypJSFFtiEwHs3b_9-pQBcYFeF-26yrryUCN9knBmVoTNi_LBKF8Tr8LdLOG2MTQaD2OLkP-pVtOLewe63_4QLGc5pCtyxbpXoBVixaAuLyU" alt=""><figcaption><p> -  RWA utilities</p></figcaption></figure>

\ <br>

### Reputation score mechanics

The RWA staking score significantly influences a user's reputation within the OAE ecosystem, yet the final reputation score varies according to the specific user's role. For an in-depth understanding of how reputation scores are calculated for specific providers / users please see our [whitepaper](https://whitepaper.xend.finance/2.0-oae-onchain-assets-environment/2.7-iac-partners/2.7.1-iac-provider#iac-provider-account-and-reputation-engine).

### Dynamic & Fixed Pricing Models&#x20;

RWA dynamic pricing introduces flexibility in settling specific fees or costs, offering multiple payment options that include FIAT, stablecoins, and RWA tokens. This pricing mechanism is adaptable and can be regulated directly by Xend Finance for certain services (e.g OAE services, Origin Studio premium features, etc.) or decided upon by the users themselves for transactions within the OAE ecosystem (e.g., between providers and customers, marketplace transactions, etc.).

<br>

***Dynamic Pricing***

* **Stable to Volatile:** Prices are established in a fixed USD amount or another fiat currency. Payment can be made in the set currency or in RWA tokens, providing a bridge between stable and volatile value systems.
* **Volatile to Stable:** Prices are determined in a fixed amount of RWA tokens but can be settled using either RWA tokens, stablecoins, or FIAT, offering flexibility in payment methods\ <br>

***Fixed Pricing***

Conversely, fixed pricing mandates a direct match between the price set and the payment method used:

* **Fixed Stable Price:** Requires payments to be made in stablecoins or fiat currency.
* **Fixed RWA Price:** Payments must be made in a specific amount of RWA tokens, ensuring consistency in the token’s utilization.<br>

The table below outlines the pricing methods applied to various features and environments within the OAE ecosystem.

| OAE Element                              | Dynamic Stable | Dynamic RWA | Fixed Stable | Fixed RWA   |
| ---------------------------------------- | -------------- | ----------- | ------------ | ----------- |
| Asset Chain transaction fees             | <p><br></p>    | <p><br></p> | <p><br></p>  | x           |
| Xend Connect transaction fees            | <p><br></p>    | <p><br></p> | <p><br></p>  | x           |
| Origin studio fees                       | x              | <p><br></p> | <p><br></p>  | <p><br></p> |
| Stake-to requirements                    | <p><br></p>    | <p><br></p> | <p><br></p>  | x           |
| Payments between providers and customers | x              | x           | x            | x           |
| Marketplace transactions                 | x              | x           | x            | x           |

&#x20;*- Dynamic & fixed payments*

\
\
\
\ <br>

##

<br>


# OAE & RWA Macro-Economy

## OAE & RWA macro-economy

### OAE value streams

In the landscape of modern digital products, especially within the web3 domain, the economy is fundamentally structured around value streams, including especially revenue streams and expense sinks.&#x20;

This economy is perceived through multiple lenses:

1. **Revenue Streams of the Product**

These are the primary sources of income generated directly by the product's core operations and services.

2. **Revenue Opportunities for Users**

* Endogenous Revenue: Originates from activities within the product's native token economy and reward systems.
* Exogenous Revenue: Derived from external capital injections, not directly tied to the product's native economy, tokens, or reward mechanisms.

3. **Product Expenses**

These include all costs associated with the maintenance and development of the product and its surrounding ecosystem.

4. **Expense Sinks**

Features within the product that encourage users to spend their native tokens or external capital. These sinks for user expenses concurrently serve as revenue streams for the product.

5. **Hold / buy pressure stimulant**&#x20;

Features that promote long-term holding of the token despite its market price volatility, or encourage buying it at the low market price.&#x20;

The interplay between these elements underscores the dynamic economy of a web3 digital product ecosystem. Each aspect, from revenue streams to expense sinks, contributes to the overall health and sustainability of the product.

<br>

For a comprehensive overview, including specific examples and detailed explanations of each category, please refer to the table below

<br>

<table data-header-hidden><thead><tr><th width="118"></th><th width="145"></th><th width="92"></th><th width="91"></th><th width="92"></th><th width="94"></th><th width="75"></th><th width="86"></th></tr></thead><tbody><tr><td>Item name</td><td>Description</td><td>Product revenue</td><td>Endogenous user revenue</td><td>Exogenous user revenue</td><td>Product expense</td><td>Expense sink</td><td>Hold / buy pressure stimulant </td></tr><tr><td>Transaction Fees</td><td>Fees from transactions on AssetChain and XendConnect</td><td>x</td><td><br></td><td>x</td><td><br></td><td>x</td><td><br></td></tr><tr><td>OAE Service Fees</td><td>Charges for using OAE tools</td><td>x</td><td><br></td><td><br></td><td><br></td><td>x</td><td><br></td></tr><tr><td>Xend Exchange trading volume revenue</td><td>Income from maker and taker fees on Xend Exchange</td><td>x</td><td><br></td><td>x</td><td><br></td><td><br></td><td><br></td></tr><tr><td>Origin Studio Fees </td><td>Fees for access to premium features and subscriptions in Origin Studio.</td><td>x</td><td><br></td><td><br></td><td><br></td><td>x</td><td><br></td></tr><tr><td>GOR Data Access Fees</td><td>Charges for higher levels of data access through paid API endpoints.</td><td>x</td><td><br></td><td><br></td><td><br></td><td>x</td><td><br></td></tr><tr><td>P2P &#x26; Incubation Platform Commissions</td><td>Commission fees on transactions within the P2P credit platform and the incubation/fundraising platform.</td><td>x</td><td><br></td><td><br></td><td><br></td><td>x</td><td><br></td></tr><tr><td>GOR Premium Positioning Fees</td><td>Fees for premium listings and visibility on the GOR platform.</td><td>x</td><td><br></td><td><br></td><td><br></td><td>x</td><td><br></td></tr><tr><td>Advanced Multisig Wallet Fees</td><td>Charges for setting up and utilizing advanced multisignature wallet features.</td><td>x</td><td><br></td><td><br></td><td><br></td><td>x</td><td><br></td></tr><tr><td>Off-/On-Ramp Fees</td><td>Fees associated with off- and on-ramping services.</td><td>x</td><td><br></td><td><br></td><td><br></td><td>x</td><td><br></td></tr><tr><td>Xend OmniBridge Fees</td><td>Transaction fees for using the Xend OmniBridge for cross-chain transfers.</td><td>x</td><td><br></td><td><br></td><td><br></td><td>x</td><td><br></td></tr><tr><td>NodePay Transaction Fees</td><td>Charges for transactions processed through NodePay</td><td>x</td><td><br></td><td><br></td><td><br></td><td>x</td><td><br></td></tr><tr><td>Domain Registration Fees</td><td>Income from domain hosting and registration</td><td>x</td><td><br></td><td>x</td><td><br></td><td>x</td><td><br></td></tr><tr><td>Licensing Fees</td><td>Fees from Public AssetChains adoption</td><td>x</td><td><br></td><td>x</td><td><br></td><td><br></td><td><br></td></tr><tr><td>IAC Council Revenue</td><td>Commissions from managing OAE framework</td><td><br></td><td><br></td><td>x</td><td><br></td><td><br></td><td><br></td></tr><tr><td>Banking Services Revenue</td><td>Income from banking services</td><td>x</td><td><br></td><td><br></td><td><br></td><td>x</td><td><br></td></tr><tr><td>Service Provision Fees </td><td>Revenue from services provided via Social Hub and IAC</td><td><br></td><td><br></td><td>x</td><td><br></td><td>x</td><td><br></td></tr><tr><td>Insurance Policy Management</td><td>Earnings from insurance coverage</td><td><br></td><td><br></td><td>x</td><td><br></td><td>x</td><td><br></td></tr><tr><td>Commission fee on providers revenue</td><td>Commission fee on Providers’ revenue</td><td>x</td><td><br></td><td><br></td><td><br></td><td><br></td><td><br></td></tr><tr><td>Progressive Synchronization Campaigns</td><td>Revenue from implementing IAC councils and Subnets</td><td>x</td><td><br></td><td><br></td><td><br></td><td><br></td><td><br></td></tr><tr><td>OAE Marketplace Sales</td><td>Revenue from plugin and solution sales</td><td>x</td><td><br></td><td><br></td><td><br></td><td>x</td><td><br></td></tr><tr><td>Marketplace commission fee</td><td>Commission fee on Marketplace sales</td><td>x</td><td><br></td><td><br></td><td><br></td><td><br></td><td><br></td></tr><tr><td>Conflict Resolution Services</td><td>Earnings from mediating disputes</td><td><br></td><td><br></td><td>x</td><td><br></td><td>x</td><td><br></td></tr><tr><td>RWA Rewards</td><td>RWA rewards and incentives</td><td><br></td><td>x</td><td><br></td><td>x</td><td><br></td><td>x</td></tr><tr><td>Reputation engine</td><td>Logical connection between providers reputation and RWA staking score</td><td><br></td><td><br></td><td><br></td><td><br></td><td><br></td><td>x</td></tr><tr><td>Credibility score engine </td><td>Logical connection between reputation of the providers involved in asset onboarding and its credibility</td><td><br></td><td><br></td><td><br></td><td><br></td><td><br></td><td>x</td></tr><tr><td>RWA levels and benefits</td><td>Gradually increasing tiers of benefits and bonuses based on staking score thresholds </td><td><br></td><td><br></td><td><br></td><td><br></td><td><br></td><td>x</td></tr><tr><td>Stake-to model</td><td>Model that links access to specific features or ecosystem roles with specific staking score threshold, or amount of staked RWA tokens </td><td><br></td><td><br></td><td><br></td><td><br></td><td><br></td><td>x</td></tr><tr><td>Development &#x26; Maintenance</td><td>Costs for platform improvement, software development, and security.</td><td><br></td><td><br></td><td><br></td><td>x</td><td><br></td><td><br></td></tr><tr><td>Marketing &#x26; Community</td><td>Expenditures on user base expansion, advertising, and community events.</td><td><br></td><td><br></td><td><br></td><td>x</td><td><br></td><td><br></td></tr><tr><td>Regulatory &#x26; Legal Fees</td><td>Expenses for legal compliance across jurisdictions.</td><td><br></td><td><br></td><td><br></td><td>x</td><td><br></td><td><br></td></tr><tr><td>Customer Support</td><td>Costs for maintaining high-quality support and smooth operation of services.</td><td><br></td><td><br></td><td><br></td><td>x</td><td><br></td><td><br></td></tr><tr><td>R&#x26;D</td><td>Investment in exploring new features and improving offerings.</td><td><br></td><td><br></td><td><br></td><td>x</td><td><br></td><td><br></td></tr><tr><td>RWA Insurance Fund</td><td>Contributions to RWA insurance funds securing gradual increase of RWA minimal possible price. </td><td><br></td><td><br></td><td><br></td><td>x</td><td><br></td><td><br></td></tr></tbody></table>

*- OAE & RWA value flows*

### RWA Fiscal Policy&#x20;

Xend Finance's RWA Fiscal Policy and Token Circulation Model is poised to create a sustainable, value-accumulating economic system centered around the RWA token. This strategy not only aims to stabilize and potentially increase the RWA token's market value but also ensures that the ecosystem remains attractive and rewarding for participants.&#x20;

1. **Strategic Assets Diversification**

Xend Finance adopts a diversified reserve strategy to

* Ensure stability and mitigate volatility risks inherent to crypto markets
* Position itself to proactively engage in market opportunities, particularly in the context of RWA token valuation

Recognizing the potential fluctuations of RWA tokens, the Xend Fiance will strategically allocate its reserves across a spectrum of assets, including cryptocurrencies like ETH and BTC, traditional currencies such as USD, EUR, and GBP, as well as stable assets like tokenized gold.&#x20;

This approach ensures Xend Finance has the flexibility to rebalance its portfolio in response to market conditions. Strategic diversification enables Xend to capitalize on low price points of the RWA token, executing buybacks to stabilize and potentially enhance its value.&#x20;

This approach underlines Xend Finance’s commitment to a stable and growth-oriented economic environment, leveraging its broad-based reserves to support the RWA token's market position effectively.

2. **RWA Buyback**&#x20;

All Xend Finance’s revenues generated within the OAE  will directly support RWA buybacks initiative. This approach ensures that a portion of the ecosystem's income is reinvested into the market, creating continuous demand for RWA tokens, thereby stabilizing and potentially increasing their value.

3. **RWA Redistribution** &#x20;

Portions of RWA tokens bought back from the market will be re-injected back into staking rewards budget, periodically increasing the amount of rewards that stakers receive, and as such - maintaining competitive staking rewards APR level.&#x20;

4. **Global Minimal Guaranteed Liquidity Depth  (g-MGL)**

Xend Finance commits to reinforcing the RWA token's market stability by instituting permanent liquidity locks. This approach involves dedicating a part of the revenue generated from OAE activities to create LP tokens. These LP tokens are then sent to the burning vault  for permanent locking. This strategic move ensures a foundational layer of liquidity for the RWA token, safeguarding against volatility and providing traders and investors with the confidence of a consistently available market depth.

5. &#x20;**Global Minimum Guaranteed Price (g-MGP)**

Xend Finance introduces a groundbreaking Global Minimum Price Guarantee, establishing a safety net for the RWA token's market value. This involves incrementally enhancing a specialized 'wind-up' budget that serves as a collective insurance fund for the entirety of RWA token holders. The fundamental principle of this strategy is that the market price of RWA tokens will never fall below a certain threshold, which is determined by dividing the total 'wind-up' budget by the overall supply of RWA tokens.

For instance, with a total RWA token supply of 200 million and a Global Minimum Price Guarantee Fund of $10 million, the safeguarded minimum price is set at $0.05 per token. This assurance implies that, in the theoretical scenario where every token holder except Xend Finance opts to sell their tokens simultaneously, the price support mechanisms and standing orders within exchange order books will sustain the RWA token's price at or above $0.05.

This strategy not only provides a robust price floor for RWA tokens but also instills confidence among token holders about the inherent value and stability of their investments within the Xend Finance ecosystem.

<br>

Xend Finance will keep the current minimum guaranteed price of RWA token as a public metric.&#x20;

5. Premium Minimum Guaranteed Price (p-MGP)

Xend Finance enhances its financial safety measures with the Premium Minimum Price Guarantee (Premium MPG), a step above the global guarantee, tailored for users engaged at or beyond the 1st RWA level. This program is structured with clear benefits for those deeply invested in the ecosystem:

<br>

* The guarantee levels are scaled according to user engagement, with higher RWA levels securing better minimum prices.
* These guaranteed prices are not static; they're designed to rise incrementally over time, rewarding long-term participants.
* The financial underpinning for this enhanced guarantee comes directly from a designated portion of Xend Finance's revenue-driven reserves, ensuring the program's sustainability and reliability.

<br>

<figure><img src="https://lh7-us.googleusercontent.com/JvLyAuWdA5I6yorIb7OkvYekDftjKtBsQkN9sG_4uoULIA7QgH61m4RxNo2xgrZie2ErQ7UclTGQBorVFsBvwVTR-Af87dc2kXHZo_aTflLMt9sdlAq7ldiEV-p7E2zKE-CwLxIQyuPub5Pl16ZIubY" alt=""><figcaption><p> -  RWA fiscal policy</p></figcaption></figure>

<br>

### Token circulation model&#x20;

For a comprehensive understanding of how RWA tokens move within the ecosystem, please see the visual guide provided below:&#x20;

<figure><img src="https://lh7-us.googleusercontent.com/4dQqruIuZ30ptj3qiLfrdEz2vFwYbAt-HArv9XTJxJrjbn1vV8xCCqcCsTSTqdB2ZObz4LYGiji1Q1Bu3lF_EHajzhiaKdbHX__N5dzcDgZKqd4bIYly47BjXfCsWdqaEcLQh-UnIg3dll8OHsOXuRM" alt=""><figcaption><p> -  RWA circulation model</p></figcaption></figure>

\
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# Future Legal Status Of RWA Tokens

In the future, RWA tokens will be onboarded to Asset Chain. This move is expected to give these tokens an additional dimension of value beyond their current utility features. Specifically, RWA tokens are set to be linked to a defined share of Xend Finance's equity.&#x20;

This linkage means that holding RWA tokens could entitle owners to a share of the company's profits, similar to how dividends work for traditional shareholders.

The move to tie RWA tokens with company equity aims to provide token holders with financial benefits that reflect Xend Finance's performance, directly aligning their interests with the company's success. This approach not only enhances the value proposition of RWA tokens but also pioneers a hybrid model that combines blockchain innovation with traditional investment strategies.<br>

The specifics of how RWA tokens will be connected to Xend Finance equity, including the legal framework and the mechanism of profit-sharing, are currently being developed to ensure that the integration adheres to regulatory standards and legal requirements, safeguarding the interests of token holders and the company alike.&#x20;

Details regarding the legal structure of this equity linkage  will be clearly outlined and communicated to ensure transparency and compliance.

\ <br>


# Litepaper

**Onchain Asset Environment (OAE)**

**Xend Finance**

\
\
\ <br>

**First universal framework and blockchain for worldwide assets tokenization and on-chain management**

\ <br>


# Solving ASR Issue

## <mark style="color:orange;">Solving Asset Status Replication (ASR) Issue</mark>&#x20;

The main goal of the OAE (Onchain Asset Environment) is to tackle the ASR (Assets Status Replication) issue. This problem revolves around ensuring that the actual legal and physical states of assets and rights, when represented as blockchain constructs, are accurately mirrored in both the blockchain environment and the real world. Specifically, it aims to:

* Ensure that any changes made to assets and tokenized rights within the blockchain are replicated in the real world, affecting both their legal and physical states.
* Reflect any changes in the physical or legal status of these assets and tokenized rights, occurring in the real world, on the blockchain.

<figure><img src="https://lh7-us.googleusercontent.com/Wfy5JtbMrov27MXbHcC2mfRXJLntya1ZvJtvOC6DhqfEb5o8U_0rhPaSyXsarGcAwKm9Tju5ngzSd5tkWHiYBAfw9x8KJj3mDbO77JgPey3Cvs6_Fi387xBmWMRYcxOuMxhmmRunSJN8H2zOVgHxmhQ" alt=""><figcaption></figcaption></figure>

This ASR issue is significant because no existing blockchain product or technology has effectively addressed it. Most current solutions, such as smart contracts and tokens, are abstract and don't meet legal standards.&#x20;

Additionally, many Real-World Asset (RWA) solutions only offer tokenized shares in entities, which results in indirect ownership rights under often uncertain and legally risky frameworks.&#x20;

Others propose trust-based legal agreements that promise token representation of specific assets or rights, but these are not true solutions. They are risky workarounds that fail to bridge the gap between blockchain constructs and real-world legal standards.

OAE tackles the ASR issue through its ‘777’ strategy, comprising:

* **7 core principles**
* **7 product pillars**
* **7 unique features**

Each component is detailed extensively in the table below.

<table data-header-hidden><thead><tr><th width="273"></th><th width="294"></th><th></th></tr></thead><tbody><tr><td><h3>7 Core Principles</h3></td><td><h3>7 Pillars</h3></td><td><h3>7 Unique Features</h3></td></tr><tr><td><p><br></p><ul><li>All Assets are Real: OAE recognizes all legally transactable assets, both tangible and intangible, as real.</li></ul><p><br></p><ul><li><h3>Real Assets Mean Real Identity: OAE mandates legal ownership confirmation for every onboarded asset.</h3></li></ul><p><br></p><ul><li>Ownership Homogeneity:  For assets to be registered on the Asset Chain, they need to be associated with complete ownership rights. This means that if an individual doesn't fully own a specific asset, like a part of a real estate property, this partial ownership can still be onboarded as a distinct asset in its own right.</li></ul><p><br></p><ul><li>Harmonization With Legal Standards: OAE aims to operate in synchronization with legal standards and definitions related to assets as well as full real rights and limited real rights.</li></ul><p><br></p><ul><li><h3>Going beyond ownership: OAE allows for the digital representation of a variety of asset-related rights, going beyond simple ownership to include rights like usage, possession, collateral, and more.</h3></li></ul><p><br></p><ul><li><h3>Holding is Not Owning: Separates constructs of ownership and holding as distinct factual and legal constructs. Holding a token will not always mean being an owner. </h3></li></ul><p><br></p><ul><li><h3>Protecting Ownership Instead of Further Limiting: Commits to direct ownership without intermediary 'entity wrapping', ensuring asset tokenization respects and reflects ownership relations accurately.</h3></li></ul></td><td><p><br></p><ul><li>AssetChain: A dedicated blockchain for asset tokenization.</li></ul><p><br></p><ul><li>Origin Studio: For issuing and managing asset-related tokens.</li></ul><p><br></p><ul><li>Social Hub: Connects asset/token owners with service providers.</li></ul><p><br></p><ul><li>Xend Connect: Links AssetChain with other OAE components, blockchains and external data.</li></ul><p><br></p><ul><li>GOR (Global Ownership Register): Centralizes asset profiles, events and transactions for management and transparency.</li></ul><p><br></p><ul><li>Xend Solutions: A suite of services including banking, exchanges, and fundraising platforms.</li></ul><p><br></p><ul><li>IAC Protocol: Ensures assets’ credibility through authentication, insurance, and compliance validation.</li></ul></td><td><p><br></p><ul><li>Asset Profiles: Every onboarded asset gets its GOR profile automatically, together with a public tracker of on-chain events and transactions related to this asset. </li></ul><p><br></p><ul><li>Event Mirroring:  Allows to capture legal and factual state of the onboarded assets and reflecting it in OAE </li></ul><p><br></p><ul><li>Assets as Smart Contracts: Every asset added to the AssetChain is represented by its own smart contract, not a token</li></ul><p><br></p><ul><li>Rights as Tokens: Tokens within OAE represent specific rights, not the assets themselves.</li></ul><p><br></p><ul><li>Universal Asset Environment: OAE is designed to accommodate all legally transactable assets, covering both tangible and intangible categories.</li></ul><p><br></p><ul><li>IAC Cooperation Triangle:  Engagement of Insurance Providers, Asset Authnethicators and Compliance Validators who enable Events Mirroring and  Assets<br>Credibility Assessment </li></ul><p><br></p><ul><li>Legal Binding and Credibility Score:  Solutions for ensuring and quantifying how reliably that asset’s factual state and legal status are linked and replicated between the real world and OAE (e.g. current owner, location, physical state description etc.) </li></ul></td></tr></tbody></table>

\ <br>


# OAE From User Standpoint

## <mark style="color:orange;">OAE from user standpoint</mark>

\
**Navigation**&#x20;

From a user's point of view, OAE is simply to use.  Global Ownership Register (GOR)  acts as the main website and access point for all OAE functionalities and additional solutions. Through GOR, users can easily navigate to various OAE solutions including:

* Xend Solutions
* Origin Studio
* Social Hub

GOR also enables users to explore asset profiles, view transaction histories, and interact with assets and tokenized rights, including buying or selling them on a dedicated marketplace or exchange.

**Asset trading**&#x20;

OAE supports the trading of all legally transactable rights and assets through 3 main channels:&#x20;

* **Direct** - by making transfers between OAE wallets
* **Assets Marketplace**  - for non-liquid transactions (buying, selling or auctioning items)
* **Xend Exchange** - For order book or constant invariant liquid transactions.

**Xend ID and OAE wallet**

User interactions with OAE are tied to a unique **Xend ID**. With a Xend ID, users can open an unlimited number of OAE wallets, each linked to that Xend ID. However, a single OAE wallet is tied to only one Xend ID, with the exception of multi signature wallets.

Xend ID can remain anonymous, meaning it doesn't need to be linked to any real personal or corporate identity. However, for access to certain OAE features, revealing your identity may be necessary.

The **OAE wallet** operates as a blockchain wallet, akin to an Ethereum wallet, and is designed to function separately from the **Xend Wallet**. The latter is technically still an OAE wallet as well, but is specifically utilized for managing crypto deposits and withdrawals within the CeDEFI exchange and is securely held under Xend Finance Custody.

&#x20;

**Ecosystem members**&#x20;

OAE's ecosystem is built around 3 main participant groups:&#x20;

* **Users** - the largest group, engage with the platform by onboarding assets, managing them through Origin Studio, exploring the asset chain via GOR, and using Xend solutions for a range of activities like trading and fundraising
* **Providers** -  include a broad range of service providers, such as those in the Insurance, Authentication, and Compliance (IAC) triangle, as well as auditors and security solutions providers.&#x20;
* **Validators** -  contribute to the platform by depositing RWA tokens for consensus purposes and setting up validation nodes.<br>

## OAE visual framework  <br>

<div><figure><img src="https://lh7-us.googleusercontent.com/1chWgNCInj4xxsd2BLlwkS3p3IWu4XbGYmzer4jTpCZsGfx__oRAj_ZkgHCk-dNOPCmuTvnPRmOZDNNdaPwGUNKFWoiAk9MUzhyheTjaBH6zsqNIB00-lDk8nHMpCSUEJfTsNr6H1hVauWJ93tyqGkM" alt=""><figcaption><p>OAE visual framework</p></figcaption></figure> <figure><img src="/files/ktu8zWKWATH6t9e2KVy8" alt=""><figcaption></figcaption></figure></div>

<br>

## IAC

OAE addresses the ASR issue  through the integration of IAC, which encompasses Insurance, Authentication, and Compliance Validation services.&#x20;

<br>

<figure><img src="https://lh7-us.googleusercontent.com/YU-DhZrlai03_QY-39CIIAZz2kWXJBt37Hp44KwUNs2Z5cPz9mBT4KabCZosAhkqLyxl0Y7sOL7c-lLbtnGaqfs65DQv1mqn2FKNotf47zmV0Ob371m3HKSue_I2mfTjRO-5J7LdnwG330oU6MQOzms" alt=""><figcaption></figcaption></figure>

<br>

Users ( ***Asset Owners*** ) engage with IAC providers through platforms like Origin Studio and Xend Connect, to ensure:<br>

* **Asset Physical State Authentication:** This involves either a one-time or recurring check to verify the physical condition and presence of an asset.
* **Legal Status Validation:** IAC providers validate asset's legal status, and ensure that  digitization or tokenization on OAE adheres to applicable legal standards.
* **Asset Insurance:** IAC services include facilitating the setup of insurance policies for assets. These policies can be activated in the event of an 'insurance event', such as loss, damage, or any issues pertaining to the legal and factual states of the asset.

The outcomes of the services provided by IAC entities are standardized and measurable, culminating in an '**asset credibility score**' that's displayed on the asset's GOR profile.<br>

Furthermore, IAC providers are evaluated based on their reputation score. For an in-depth explanation of this scoring mechanism, please see our [whitepaper](https://whitepaper.xend.finance/2.0-oae-onchain-assets-environment/2.7-iac-partners/2.7.1-iac-provider#iac-provider-account-and-reputation-engine).

<br>

## Xend Connect & Events Mirroring

Xend Connect integrates cross-chain connectivity and data oracles into OAE, enabling smooth interaction between external data (on-chain and off-chain) and OAE.&#x20;

Xend Connect enables designing and auto-execution of **event mirrors** - procedures co-created with IAC providers, that provide bi-directional replication of factual state and legal status of assets and token rights (event mirror can be fully or semi-automated, or manual). <br>

<figure><img src="https://lh7-us.googleusercontent.com/3OJ2DNB2OvSp2Q3m9pbheJBPWfUb98BVVW4MDbR8XT8yBzSCBqFe_9YGHVRP8MpXcC7ZnZ8eMr8MqdTQJU_iR_eAkYCA7v5KOvQ6mLUuGtPoTScC8BWAnjV2kI9f6OcZn3noNfLsfpkqJSNksDgILxs" alt=""><figcaption><p>Event mirroring </p></figcaption></figure>

Apart from event mirrors, Xend Connect facilitates **Omni-Native Smart Contracts** which&#x20;

* enables  deploying paralel smart contract replicas across major blockchains, including Ethereum, Arbitrum, Polygon, and Solana
* promotes seamless interoperability.&#x20;
* simplifies **cross-chain asset transfers**&#x20;

Omni-native OAE smart contracts basically allow OAE tokens to be moved across various blockchains without the need for any external bridges (like Stargate or Anyswap), instead they are using synchronized burning / minting mechanics, embedded directly in token smart contracts linked with Xend Connect.&#x20;

## Origin Studio

Origin Studio is a comprehensive platform for creating smart contracts and issuing tokens for any asset type, featuring an easy-to-use RWA tokenizer for asset registration and migration. It's designed to streamline asset tokenization and ensure compliance within the OAE framework. Key features include:

* **RWA Tokenizer:** Simplifies asset registration into smart contracts with support for token migration across blockchains.
* **Playground:** Offers a sandbox for testing asset registration and token issuance, plus a simulator for evaluating token launch scenarios in a controlled, AI-driven environment.
* **Token Economy Manager:** Provides tools for real-time asset economy management, including setting up vesting schedules, managing token listings, and organizing rewards and airdrops.
* **Watchdog:** Automates security checks, AML compliance, fraud detection, and more, ensuring the integrity of smart contracts.
* **Compliance:** Facilitates the management of compliance requirements and contractual obligations, supporting KYC processes and digital agreements.
* **Admin Panels:** Dedicated interfaces for smart contract management and coordination with involved partners such as IAC members, auditors, and investors<br>

<figure><img src="https://lh7-us.googleusercontent.com/77zU5HE9t9ALGLto_ajRQOSqdTD55m6HesiWkirbRi7Z6vz8ogSVqvpO_cS0aZXGEOGYvhGNBtq8tBaryZOGzcpWg40cT9WMmA-anpLN5S5uEndTPVYO61NGSpJ0agQYepEBF0PQQv65mOcXo5ACnXk" alt=""><figcaption><p>Origin studio</p></figcaption></figure>

<br>

## GOR

The Global Ownership Register (GOR) is a comprehensive web portal that functions as a hub for showcasing asset profiles. It’s a blend of CoinMarketCap and Etherscan approaches but with a unique twist. Key features include:

* Asset profile pages.
* Lists of all top token holders associated with an asset's smart contract.
* Records of transactions conducted by these token holders.
* Documentation of all events linked to the asset through the event mirror oracle.
* An asset's credibility score, reflecting its reliability and trustworthiness.
* Detailed views on the event mirroring policies adopted for authentication, insurance, and compliance validation.
* Reputation scores of IAC (Insurance, Authentication, Compliance) partners and records of insurance payout events.

\ <br>

<figure><img src="https://lh7-us.googleusercontent.com/MBt_ZBnreFFLwA074F6c56INu90KIX6V1_UeKhkI1RXmAfgkuw80803jq-r1fd3wugNG380dWB3dCSTsGPbz3PpjSfduNmLRvrjP2pQ5QOx4uKDG7Wl0iG7xmi1eedTM0sglAsvtCzX-IWk6s3IJolc" alt=""><figcaption></figcaption></figure>

From the user's perspective, GOR revolutionizes asset profile management by linking control **over the asset smart contract with control over its public social profile.**&#x20;

Asset profile is being set up and managed through Origin Studio, adhering to a standardized UX template to ensure consistency. This reverse approach to social profile custody provides a 180 degrees turn from how web3 tokens profiles have been managed so far.&#x20;

\ <br>


# Xend Solutions

Xend Solutions delivers a curated array of services aimed at supporting the digital fiat economy, including banking, exchanges, and fundraising platforms. These services are integral to facilitating fund transfers and amplifying the visibility and reputation of service providers within the OAE ecosystem.<br>

<figure><img src="https://lh7-us.googleusercontent.com/Q7OhxznC9ko_mxbZ86cRjX5vnERBh5hbiYggsEalZMJwSm1EK9CkunbOcjJq1OKT-N_QtnmbWq7hq8B5xFjb6n-EWYThrOF907dC9YlxT6LLHzVhob9fZ8PjDFZOk8M6G9TgIuoLfB-4-t5pSW9fHFw" alt=""><figcaption></figcaption></figure>

## Asset Chain

### Introduction&#x20;

Asset Chain is a specialized blockchain designed for the digitalization and tokenization of assets and rights, utilizing a Proof of Stake (PoS) consensus mechanism with the support of RWA tokens.

In its framework, Asset Chain employs:

* **Smart contracts for the digital representation of assets.**
* **Tokens for the digital representation of tokenized rights.**

Tokenized rights are expressed by:&#x20;

1. **Token standards**, predicted for&#x20;

   a. Full real rights (ownership)

   b. Limited real rights (possession, usufruct, mortgage, collateral, tenancy and similar) <br>
2. **Token sub-standards** for determination of:&#x20;

   a. **Bondability** - tokenized right can be either

   1. Bearer - owned by whoevers holds the token
   2. Identity registered - bounded with specific person / entity&#x20;

   b. **Divisibility** - determining whether right is divisible or not, and whether it is based on co-division (actual split)  or joint-division (replication and parallel existence of same right)

&#x20;      c. **Fungibility** - determining whether token is fungible or non-fungible&#x20;

&#x20;       d. **Conditionality** - determining a variety of resolutive or suspending conditions related to rights,               together with specific event or time-based triggers.&#x20;

<br>

The table below illustrates how AssetChain utilizes smart contracts and tokens to differentiate between assets and the rights associated with them.

| **Smart contracts**                                                                                                                                                                                                                                                                      | **Token standards**                                                                                                                                                                                                                                                                                                                                                                                           | **Token sub-standards**                                                                        |
| ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------- |
| <ul><li>Lands</li><li>Real estate</li><li>Movable property</li><li>Digital property</li><li>Intellectual property</li><li>Money, Cash</li><li>Financial instruments</li><li>Receivables</li><li>Shares, equities</li><li>Entities</li><li>Other transactable assets</li></ul><p><br></p> | <p>Full real rights: </p><ul><li>Singular ownership</li><li>Partial unit-based ownership</li><li>Joint ownership </li></ul><p><br></p><p>Limited real rights: </p><ul><li>Usufruct</li><li>Easement</li><li>Pledge</li><li>Right to the Premises</li><li>Mortgage</li><li>Collateral </li><li>Possession Rights</li><li>Leasing Rights</li><li>Licensing Rights</li><li>Other Rights</li></ul><p><br><br></p> | <ul><li>Bondability</li><li>Divisibility</li><li>Fungibility</li><li>Conditionality </li></ul> |

<br>

### Asset Chain Rules

Asset Chain is designed to support all legally recognizable, transactable asset types (both tangible and intangible) as well as all types of legally known rights to assets (not limited to ownership).&#x20;

To achieve that, Asset Chain has been based based on **10 rules**: <br>

| #  | **Rule name**                                                                                     | **Rule Description**                                                                                                                                                                                                                                                                                          |
| -- | ------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| 1  | Smart Contract as Digital Representation of an Asset                                              | This rule establishes that a smart contract on the blockchain serves as the digital counterpart of a physical or intangible asset. It codifies the characteristics, ownership, and other pertinent details of the asset into a programmable format that can be automatically enforced without intermediaries. |
| 2  | <p>Token Standard as Digital Definition of Specific Legally Recognized Right</p><p><br></p>       | A token standard defines the structure and functionality of tokens to ensure they represent legally recognized rights consistently and interoperably across the digital ecosystem. This could include rights such as ownership, usage, or revenue sharing.                                                    |
| 3  | Token Sub-standard as Digital Definition of Specific Legally Recognizable Limitation of the Right | Token sub-standards introduce nuances to the rights defined by token standards, specifying limitations or conditions under which these rights apply. This allows for greater flexibility and precision in representing complex legal relationships in digital form.                                           |
| 4  | Token as Digital Representation of Specific Right                                                 | This rule clarifies that tokens are not just digital objects but represent specific rights, such as ownership or access, as defined by their respective standards and substandards. This precise definition ensures clarity in what holding a token actually means.                                           |
| 5  | Not Every Right is Transferable                                                                   | Acknowledging that certain rights (e.g., personal privileges) cannot be transferred to others. This rule respects the legal nature of specific rights, ensuring that the digital representation adheres to these limitations.                                                                                 |
| 6  | Not Every Asset Right is Bearer Right                                                             | Bearer rights are those that belong to whoever holds the token at any given time. This rule states that not all digital rights function this way; some may be tied to specific individuals or entities regardless of token possession.                                                                        |
| 7  | Not Every Right is Ownership Right                                                                | This distinction recognizes that tokens can represent a variety of rights beyond ownership, such as usage rights, licensing, or voting rights within a governance structure, expanding the utility and application of tokens.                                                                                 |
| 8  | Asset Rights Can Be Owned, and Can Become Independent Assets                                      | Rights themselves can be considered assets, with intrinsic value and the potential to be owned, traded, or leveraged. This principle allows for the creation of a new class of digital assets based solely on rights.                                                                                         |
| 9  | Asset Rights Can Be Held by More Than One Person                                                  | Reflecting legal concepts like joint ownership or shared rights, this rule allows digital tokens to represent co-owned rights or assets, accommodating complex ownership structures.                                                                                                                          |
| 10 | Fractionalization of Asset Rights Does Not Mean Equal Divisions                                   | <p>The division of rights into smaller, fractional interests does not imply these fractions are equal or identical. This rule allows for the nuanced and proportional division of rights, reflecting the diversity of stakeholder interests and contributions</p><p><br></p>                                  |

<br>

### Asset Chain Logic - Visuals Summary<br>

<figure><img src="https://lh7-us.googleusercontent.com/HunTSPbZ-dQWx49ISZeWqTTGDaPYSFLu88gpoaPVDTvvL5JdPkYe5ppMQRj9omA_B_ILjgoQON81p-G4H8Ij5-Pootil6qgwNaejXwbuP55TkXoJ0n45vWPPM-kNvT-ZeEldA0ZTrMzolHOGkfYczAU" alt=""><figcaption></figcaption></figure>

### Ownership, Possession & Holding&#x20;

OAE introduces a refined approach to digital assets by clearly defining and separating the concepts of ownership, possession, and holding. This distinction aligns with broader legal principles and incorporates them into blockchain functionality.<br>

To achieve that, OAE recognizes:&#x20;

* **Full real rights** - i.e. ownership
* **Limited real rights** - inseparable from specific ownership rights, and limiting that right in some way,  including possession, collateral, usufruct, mortgage and more. <br>

Example: John onboarded his entire apartment to OAE, and minted 1 NFT representing 100% ownership to it. He rents the apartment to Matthew and the entire process is managed through Asset Chain. From technical perspective:&#x20;

1. Apartment is smart contact linked with 2 tokens
   1. ownership token (full real right)&#x20;
   2. right to use the apartment as per lease agreement (limited real right) <br>
2. Both tokens are linked with a so-called token bond’ - please refer to the next chapter for more details.&#x20;

\ <br>

Both full real rights and limited real rights can be ‘bearer’ or ‘identity-linked’. Bearer rights means that whoever holds them (in our case-  stores on OAE wallet) is considered as legal owner. Identity-linked tokens on the other hand have a fixed identified owner (in our case - Xend ID). They can flow around various wallets, but holding them doesn’t mean owning them. This is particularly relevant from a custody perspective - such tokens can be moved to an external vault without the intrinsic ownership transfer that happens in traditional blockchains.&#x20;

<br>

<figure><img src="https://lh7-us.googleusercontent.com/zR2Jeac5QbngYPfdXXfsVoUIdT139U3bHHSSd3QJ2rrwQ9QIVoam1uPvF1y-y3s-uqDh8pDqtf9Pp6oyQACVBsMnv7WGsOqlL9nU1dFzfXJh-q4Ovc7W3XigD_IMcQ35zsYNncAXF9AfictOklsD9lg" alt=""><figcaption></figcaption></figure>

### Token Bonding

As mentioned in the previous section, OAE facilitates both **full real rights (ownership) and limited real rights.** Since limited real rights can only exist atop of ownership rights (e.g. real estate ownership - real estate leasing), these 2 tokenized rights have to be functionally linked, which is enabled by so-called ‘token bond’ <br>

Token bond makes sure that:&#x20;

1. Any limited real rights are linked with full real rights&#x20;
2. Limited right can only function ‘atop’ of full right, but never as stand-alone asset&#x20;
3. Details related to token bonds and conditions driving the interlink between 2 tokens are recorded within the asset smart contract to which both of these tokens are linked.

<br>

<figure><img src="https://lh7-us.googleusercontent.com/gwwhkcWXUMJxQDNc3xYSDyzEy2D1xQavP2UTxseQwHFokD5k8BVY0BLrGMCb_H2PpCazmZPmA5fVHH-NnYGpPHTPYoAe5EBAmRjipxruR9oWzwE0X2KWFjC9rUQOCO7cSM3qCXbH-OXDTXLHIFxcP2g" alt=""><figcaption></figcaption></figure>

<br>

Token bonding is primarily applied to scenarios involving:

* Limited ownership rights,
* Mortgages and collaterals,
* The relationship between ownership and possession <br>

The capability for token bonding is integrated into the foundational infrastructure of AssetChain.<br>

| <p><strong>Example</strong>:  John registers his property on OAE and receives an NFT token representing his 100% ownership rights. When he decides to lease the apartment to Matt, it's crucial for the authenticity check that the tenancy agreement is accurately recorded on OAE. To achieve this, John generates a limited real rights token that grants Matt the right to use the apartment as a tenant, detailing the tenancy's specifics. </p><p><br></p><p>This tenancy token can either be transferred directly to Matt, provided he has an OAE wallet, or kept within the Asset Smart Contract's vault. Importantly, the tenancy token is linked to the ownership token through a Token Bond, ensuring the lease is officially recognized and integrated within the OAE ecosystem. If John neglected to document the tenancy on OAE, a credible authenticator tasked with verifying the property's status would notice the discrepancy between the actual occupancy status of the real estate versus status reported on OAE. </p><p><br></p><p>Furthermore, if John had taken steps to prevent this verification from being conducted, the authentication process would fail regardless, highlighting the critical importance of accurately updating the property's status on the OAE platform to maintain its credibility.</p> |
| ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |

### Multi-level Asset & Token Structures

In OAE, tokenized rights to assets can be re-onboarded as stand-alone assets. In this case, a token representing a specific right is wrapped by smart contact, making it a stand-alone OAE asset that can be further tokenized if needed. <br>

Illustrations:

* John's Equity Shares: John lists ABC LTD on AssetChain, holding a majority share. He, Andrew, and Matthew have distinct equity shares, represented by NFTs. Matthew decides to split his share into 1 million units, re-digitizing his share as a new asset and issuing a new set of tokens.

* Andrew's Collateralized Loan: Andrew uses his equity share as collateral for a loan. By re-digitizing his NFT share as a new asset, a loan collateral NFT is issued to the lender, which is nullified once the loan is repaid.<br>

This flexible framework supports complex ownership and asset management, enhancing the blockchain's capacity for digital asset scalability.

\ <br>

<figure><img src="https://lh7-us.googleusercontent.com/YRZo6t_0ktPGoyAbb3v9KfXtlBDtGtjJoqfynqBweSrMNy0CkmiTGqe2J-vvHo_PWnsIOkwQCy5EMosi5DKZQ2pYjDCxuA74SPmT4oxOw4N112F4R8e35U4b7D5I_dYZGSgIriBmO5SkaQ7sQrCiZ2U" alt=""><figcaption></figcaption></figure>

### 4 Execution Levels

AssetChain is based on a 4-level execution stack, allowing for the addition, modification, and expansion of asset smart contracts, token standards, and token substandards without the need to overhaul the core blockchain infrastructure.  The execution stack (from bottom-up perspective) looks like follows: <br>

<figure><img src="https://lh7-us.googleusercontent.com/WKg9WQiAKykQTOMdyeik1ntlz4cdf1zEra-vRDO043wRc7awX_D1KWzcQnGB_59u8_zf9uV3vkaFoOAOfGBSP8z4UiBmVKE0LLtqbQV_rXV-hytppjrqQMXDiIt2xHTxvv3ri3pJdfLJHP2LlvnMI5U" alt=""><figcaption></figcaption></figure>

1. **Blockchain Infrastructure**

The foundation of AssetChain, managed by decentralized nodes, orchestrating the essential blockchain functionalities. This layer includes wallet infrastructure and sets the primary protocols for token transfers, wallet interactions, and the establishment of token and OP bonds. Changes in this layer affect the fundamental operations of AssetChain.

2. &#x20;**Asset Smart Contracts**

Positioned above the core blockchain, this layer focuses on the specific attributes and behaviors of digital assets. It enables the creation, interaction, and event initiation related to digitalized assets, including the minting of tokens that represent various rights associated with these assets.

<br>

3. **Tokenized Right**

This tier addresses the categorization and limitations of rights that can be tokenized, delineating them through token standards and substandards. It provides a detailed framework for representing legal rights as digital tokens.

<br>

4. **Data Exchange Oracles Executor (Xend Connect)**

The highest layer acts as the liaison for external data, facilitating the exchange between AssetChain and the outside world. It includes bridging between AssetChain's internal layers and connecting with other blockchains or data sources.

\
\ <br>


# Future Roadmap

### Xend Browser

The Xend Browser is set to revolutionize access to the Xend Finance Ecosystem, integrating key features into a single, user-friendly platform. Available as a desktop app, mobile app, and web platform, it ensures seamless interaction with Xend's comprehensive suite of services, including the OAE framework and more.

<br>

<figure><img src="https://lh7-us.googleusercontent.com/QVkpIZpnv7ZA53eLRqqzSjscHrYrzk5Mg4lZLG6_KZX78rgx8DW_e1bDaZgktsu048LUTsjVL9jRF7VItA9u35SJAoehZi0F1-ys1VZJkMqnm_p_sXFXQ2O-vpBMfIxc1YC3cEaTWoFCCZLjn8eZOGE" alt=""><figcaption></figcaption></figure>

<br>

**NodeOs and MicroNode Operation**

With NodeOs, users can activate MicroNodes on their devices, contributing to AssetChain validation and enhancing transaction security. Features like 'rotating uptime' and backup validators ensure constant network support without overwhelming individual devices. This system also transforms devices into multifunctional hubs for transaction facilitation and wallet management.<br>

**Subnet Creation and Domain Management**

The browser enables the creation of global and local subnets, allowing users and groups to establish custom domain spaces with self-set policies. This feature democratizes domain registration and management, aligning with Xend's decentralized ethos.<br>

**Enterprise Tools for Business**

Xend Browser incorporates Node Enterprise, a suite of on-chain business tools for registration, tax compliance, accounting, and more, making it an all-in-one solution for blockchain-based business operations.

**AI Stack Integration at Base Layer**

The AI stack at base layer will make Asset Chain an Intelligence-First Blockchain and serves as the foundational layer for seamlessly integrating AI-driven oracles, enabling real-time RWA management, dynamic compliance, and a truly tokenized global economy accessible to all.

**e-Administration and NodeBox**

The integration of an e-Administration layer simplifies interactions with public services, streamlining processes like tax submission and company registration. Additionally, the NodeBox feature offers a blockchain-integrated mailbox, providing secure, verifiable email communications with unique transaction IDs for each message.

### Progressive Synchronization&#x20;

Progressive Synchronization is a strategic initiative aimed at achieving worldwide acceptance of OAE and AssetChain at the regulatory level, thereby granting **direct legal validity to blockchain events without the necessity for two-way replication of asset status.** <br>

| Events on blockchain should be recognized as legal events in themselves, directly linking blockchain actions with real-world legal consequences. |
| ------------------------------------------------------------------------------------------------------------------------------------------------ |

<br>

The campaign for Progressive Synchronization will unfold through several key strategies:

* **Formation of IAC Councils:** These councils, composed of authenticators, insurance providers, and compliance validators, aim to foster the integration of blockchain technology into local regulations. Working alongside local regulatory bodies, IAC Councils intend to pave the way for digital public administration, advocate for the development of national blockchain infrastructures, and support the creation of local subnets.<br>

* **Public AssetChains Adoption:** Focusing on the collaboration between OAE and public AssetChains, this strategy is designed to boost the functionality and economic model of the RWA token through mechanisms like licensing or transaction fees.

* **Public Subnets Adoption:** By advocating for the establishment of national SubNets, this approach promotes digital sovereignty, reducing reliance on external or privatized blockchain solutions. It also opens potential revenue opportunities for Xend Finance by diversifying into new markets.<br>

* **Development of OAE dApp Marketplace:** This marketplace aims to extend the capabilities of the Xend Browser, providing users and administrators with customizable plugins and tools tailored for Public AssetChains and Subnets, further enhancing the ecosystem's utility and accessibility.

\ <br>


# Appendices


# Appendix A: Understanding RWA


# Assets Classification

We can classify all asset types known to humans by using 2 types of criteria - materiality (physical existence) and type of ownability (capacity to be owned) related to the assets.  &#x20;

<figure><img src="https://lh7-us.googleusercontent.com/0_L2CrcOi9q7VTkHIhrqyi3f8YsBe9TXPWqPiUzPUrY7GMunT6b9c9MVO9lOC2v9L4mE5_H7R4tkAUdAx857LumEuVUUSfZEMqO6Et7xNrPPOWM4GDX0ZLy43rzKlsHDgKWNN4DbvFm3RKVStjtxNQs" alt=""><figcaption><p>- World assets classification based on materiality and ownability</p></figcaption></figure>

Based on the classification framework outlined above, it is crucial to categorize assets into two primary groups:&#x20;

* **tangible** (physical) assets, like real estate, vehicles, jewelry, and cash;&#x20;
* and **intangible** (non-physical) assets, which include legally or collectively recognized constructs such as legal entities, digital assets, and intellectual property.

These overarching categories allow for a more nuanced classification based on the asset's transferability:

* Transferable Assets: This category further divides into:
  * Private ownership allowed These are items that can be owned by individuals or corporations.
  * Private ownership not allowed : These are primarily owned by governmental bodies or international organizations and are not available for private acquisition.
* Non-Transferable Assets: This group encompasses:
  * Inherently Personal Assets: Physical examples include humans and their organs, where ownership transfer is not applicable. Intangible examples include human rights and personal identities, which are intrinsically linked to the individual and cannot be transferred or commercialized.
  * Collectively Owned Assets: Identified through international agreements as belonging to humanity at large. These assets, such as international waters, space, and the body of global human knowledge, are exempt from individual or corporate ownership due to their universal significance or intended use.


# Narrow Understanding Of RWA

In scrutinizing a multitude of publications on the tokenization of Real World Assets (RWAs) along with descriptions of existing and emerging products, one observes a predominant inclination towards a restrictive interpretation of RWAs. This constrained perspective generally encompasses only:

* Real estate (i.e., immovable property)
* Movable property

While this viewpoint is not intrinsically incorrect, its underlying business rationale invites skepticism.

The potential of tokenization technology can cover both tangible and intangible transferable assets. Hence, once a framework for tokenizing real estate or movable properties is established, it appears illogical to omit intangible assets such as legal entities, financial receivables (including securities, equity shares, loans, etc.), and even digital or intellectual properties from the ambit of tokenization.

Moreover, the process of tokenizing most tangible assets frequently entails the transfer of their ownership to a designated legal entity or trust, which subsequently issues tokenized shares. This procedure essentially encapsulates the tangible assets within tokenized intangible assets (i.e., legal entities), underscoring a significant overlap between the tangible and intangible asset domains.

Additionally, various RWA products adopt an inconsistent definition of RWAs, simply enumerating disparate random tangible and intangible assets as part of defining RWA.  This method lacks a coherent logical underpinning, positioning these products as tokenization platforms for a seemingly arbitrary selection of popular assets, rather than providing a comprehensive, universally applicable solution founded on a rational framework that delineates specific asset types and their respective ownership structures.

Given these considerations, it becomes clear that a narrow interpretation of RWAs, confined to solely tangible, physical assets, is not just commercially questionable but also logically inconsistent.

<br>

<figure><img src="https://lh7-us.googleusercontent.com/0lQgEbJsgs1_wigTywUDMcg6TJtxCW-QmQNZJhldb7WrN9Yxwwy5x0rJ3ZT9VVD06O2qUOmn2a9CZ-8lwGdJaHHzN8HTgnw7S2FDzPJmlIIGr8-QDe4PWPBdrg0uQPMEvbbxCF2Xm57IpX00AcIyvbw" alt=""><figcaption><p>- Narrow understanding of RWA</p></figcaption></figure>


# Wide Understanding Of RWA

Wide understanding of RWA definition, assumes that all existing assets that are subjected to legally recognized form of private or public ownership can be considered as RWA.

<figure><img src="https://lh7-us.googleusercontent.com/fgj68m4GBhik8bXKL3avuBaQ8b8sU_b7q-attk0NHM54LlXgkgC3bi0XOEn56XoWP4h0LXFeC15ucWI_XyN675FFHB0Mms_tyIbUHNNLwTKlqUn9F9fK6UqhdN1jjCc6VuwfF46grqnSE5uKZ3kpo0k" alt=""><figcaption><p> - Wide understanding of RWA </p></figcaption></figure>

To clarify, if assets can be legally owned and their ownership can be legally transferred from one person or entity to another, they qualify as Real World Assets (RWA). Thus, the single factor determining whether an asset qualifies as RWA is whether or not there is an existing legal system curated by organization or government that provides a framework for their ownership, transfer, taxation, and inheritance.


# UWA - Unreal World Asset

To truly grasp the essence of Real World Assets (RWAs), it's beneficial to contrast them with Unreal World Assets (UWAs). UWAs consist of resources or items that hold value or function within fictional, virtual, or theoretical settings, yet lack physical existence or recognition under any formal legal frameworks, whether established by governments or organizations. Examples of such unreal world assets include:

* **Virtual Real Estate:** Spaces or plots within virtual worlds and online platforms where users engage in building, socializing, or virtual commerce.
* **Digital Items:** Exclusive items, weaponry, or attire in video games or virtual environments that provide the owner with benefits or status.
* **Skill or Experience Points:** In-game or educational platform credits that enable the unlocking of new skills, knowledge, or competencies, confined to those specific environments.
* **Virtual Currencies in Closed Ecosystems:** Digital currencies usable within certain online communities or games, devoid of external monetary value.
* **Fictional Company Shares:** Stakes in companies or entities that exist solely within stories or simulations, often utilized for educational or entertainment simulations.
* **Virtual Characters:** Distinctive playable characters, each with their own appearance, abilities, experiences, and possessions, within a digital story or environment.
* **Virtual Pets:** Digital animals that users can adopt, nurture, and bond with on online or mobile platforms, without the need for a physical counterpart.
* **Energy Points or Mana:** Resources consumed to execute specific actions within digital frameworks, frequently seen in gaming for activities like spellcasting or skill use.

Though intangible, these assets carry considerable value and influence within their respective spheres, affecting user involvement, economic dynamics, and social interactions in digital and virtual settings.

<br>

<figure><img src="https://lh7-us.googleusercontent.com/rG8bnE-Y2srdT-ROWw9wcfFVc0y9XLPLDq79ylHF1_ZWxHJd1eaFUzdr-J4eMCE_bdfvCYiS8tBD4RreKziSer5tBEvewKMDpO0s7a364aHq7Fpe90vZJ0cOlvVkpgIs-nVVheBHO4mI-2m1KPnewYA" alt=""><figcaption><p> -  Examples of unreal world assets (UWA)</p></figcaption></figure>

To define a universal criteria allowing to recognize assets as ‘unreal world’, we can consider criteria that parallel those of real-world assets but are adapted to the contexts of virtual, fictional, or theoretical domains. These criteria would help in understanding the value, ownership, and trade mechanisms of assets that exist outside of traditional, physical, or legal frameworks. Here are the proposed criteria:

* **Autonomous Recognition of Ownership:** There must be a system or mechanism within the unreal world (such as a game, virtual environment, or fictional narrative) that recognizes and records the ownership of the asset by an individual or entity. This doesn't require legal recognition but should be acknowledged within the system.
* **Transferability Within Its Domain:** The asset can be transferred or traded from one owner to another within the context of its unreal world. This includes the ability to gift, sell, or exchange the asset under the rules or mechanics of that specific environment, platform, or narrative.
* **Defined System of Value:** The asset has a clear system of value within its domain, which can be determined by its rarity, utility, demand, or contribution to advancement within the game, narrative, or virtual environment. This value system is recognized by the participants or users of the domain.
* **Interactivity or Utility:** Unlike real-world assets that often have physical utility or economic significance, unreal world assets must offer some form of interactivity, utility, or enhancement within their domain, such as improving user experience, offering competitive advantages, or enriching a storyline.
* **Persistence:** The asset exists continuously within the context of its domain, maintaining its characteristics, value, and ownership status over time, despite not having a physical presence.
* **Digital or Narrative Exclusivity:** The asset is unique to digital platforms, virtual environments, games, or fictional narratives, meaning it doesn't have a direct or necessary counterpart in the physical world that fulfills the same function or holds the same value.
* **Community or Participant Consensus:** The value and rules governing the asset are agreed upon or accepted by the community or participants of the unreal world. This consensus can be explicit, such as a set of game rules, or implicit, like a shared understanding in a narrative universe.

<figure><img src="https://lh7-us.googleusercontent.com/YZOneZkqpnFUlhLqybV1fHEqAlJvHFNetDfr9ofQtYXBmneAjc9QX0Qn7Jhs2-YnOISzoMsrj_cKXiNq61S9YXoYAHqn4yHe6Xo4Y_N3OkJR8yQ4IugMPCeK7YcjviLuvKmO9YbFXTyNJ7PpeliVOyw" alt=""><figcaption><p> -  Characteristic features of UWAs </p></figcaption></figure>


# RWA versus UWA - They Key Difference Lies In Legal Context

When differentiating between Real World Assets (RWA) and Unreal World Assets (UWA) through the lens of a legal framework, the focus shifts to how these assets are recognized, regulated, and protected by law. The legal framework for RWAs is well-established, involving national and international laws that cover property rights, intellectual property, contracts, and commerce. For UWAs, the legal framework is mostly scoped by Terms of Service and User Agreements between Unreal World Owner and its users.

| **Legal Framework for RWAs**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | **Legal Framework for UWAs**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| <ul><li><strong>Property Rights:</strong> Laws that define ownership, transfer, and inheritance of physical and intangible assets. This includes real estate laws, personal property laws, and the regulations surrounding the sale and transfer of securities.</li></ul><p><br></p><ul><li><strong>Intellectual Property Rights:</strong> Protections for creations of the mind, such as patents, copyrights, trademarks, and trade secrets. These rights allow creators and inventors to profit from their innovations.</li></ul><p><br></p><ul><li><strong>Contract Law:</strong> Governs the creation and enforcement of agreements between parties. This is crucial for the sale, purchase, and exchange of RWAs, ensuring that transactions are legally binding and enforceable.</li></ul><p><br></p><ul><li><strong>Regulatory Compliance:</strong> Various industries have specific regulations that impact the ownership, value, and transferability of assets within those sectors, such as financial regulations for securities or zoning laws for real estate.</li></ul><p><br></p><ul><li><strong>Law-driven enforcement:</strong> Legal rights over RWAs can be enforced through courts and legal systems</li></ul><p><br></p> | <ul><li><strong>Digital Rights Management (DRM):</strong> Laws and technologies that control the use of digital content and devices. This is crucial for UWAs, as it helps enforce the rules around the use and distribution of digital assets.</li></ul><p><br></p><ul><li><strong>Terms of Service and User Agreements:</strong> Contracts between the service provider and the users, often governing the use, ownership, and transferability of digital assets within virtual environments or platforms.</li></ul><p><br></p><ul><li><strong>Intellectual Property Rights (Adapted):</strong> While similar to RWAs, for UWAs, these rights often protect the creators of digital content, such as games, virtual goods, and digital art. However, the application can be complex, especially with assets that exist only within proprietary platforms.</li></ul><p><br></p><ul><li><strong>Emerging Digital Asset Laws:</strong> Some jurisdictions are beginning to develop laws specifically addressing digital assets, including cryptocurrencies and tokens, which might also encompass certain types of UWAs.</li></ul><p><br></p><ul><li><strong>Policy driven enforcement:</strong> Enforcement for UWAs often relies on the platform's policies and digital enforcement mechanisms.</li></ul> |


# Examples Of RWAs Definitions Incoherence

Please see the table below for a summary of recent, notable articles on RWAs, which can be used as a proof of general industry inconsistency as to how RWA should be understood, defined and classified. As long as consensus on what RWA actually means, there will be no viable business solutions and framework related to their effective universal tokenization.

| **Source**                                                                                       | **Quote**                                                                                                                                                                                                                                                                                                                                | **Example of correct definition?** | **Comment**                                                                                                                                                                                      |
| ------------------------------------------------------------------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |
| <https://www.bitcoin.com/get-started/what-are-real-world-assets-rwa/>                            | <p>Real World Assets (RWAs) are a class of crypto tokens that represent tangible assets that exist outside the digital spectrum</p><p><br><br></p>                                                                                                                                                                                       | RWA mistaken with tokens           | RWA is not a token or tokenization.                                                                                                                                                              |
| <https://academy.binance.com/en/articles/what-are-real-world-assets-rwa-in-defi-and-crypto>      | Real world assets (RWAs) tokenize tangible real assets by linking physical assets to the blockchain.                                                                                                                                                                                                                                     | RWA mistaken with tokens           | RWA is not a token or tokenization. It is not limited to physical assets.                                                                                                                        |
| <https://polymesh.network/real-world-assets>                                                     | Real-world assets (RWAs) are fungible or non-fungible tokens that represent traditional financial assets on the blockchain                                                                                                                                                                                                               | RWA mistaken with tokens           | RWA is not a token or tokenization. It is not limited to traditional financial assets.                                                                                                           |
| <https://crypto.com/research/real-world-assets>                                                  | Real World Assets is a promising application for blockchain technology that is gaining traction                                                                                                                                                                                                                                          | RWA mistaken with application      | Real world assets should be mistaken with any type of application.                                                                                                                               |
| <https://cointelegraph.com/learn/tokenized-real-world-assets-rwa-in-defi>                        | Real-world assets transformed into digital tokens and stored on a blockchain or other distributed ledger technology are tokenized real-world assets.                                                                                                                                                                                     | Logical Loop (RWA is RWA)          | This article uses the ‘A=A’ definition, essentially stating that real world assets are real world assets.                                                                                        |
| <https://tokeny.com/real-world-asset-rwa-tokenization-ecosystem-map/>                            | Real World Asset Tokenization represents the confluence of traditional financial instruments and blockchain technology. This innovative approach enables the digital transformation of tangible assets such as real estate, securities, and commodities, providing a robust foundation for trading, managing, and securing these assets. | Limited just to tangible assets    | <p>RWA is not limited to tangible assets.</p><p><br></p>                                                                                                                                         |
| <https://www.coingecko.com/learn/what-are-real-world-assets-exploring-rwa-protocols>             | Real World Assets (RWA) in crypto refers to the tokenization of tangible assets that exist in the physical world, that are brought on chain.                                                                                                                                                                                             | Limited just to tangible assets    | <p>RWA is not limited to tangible assets.</p><p><br></p>                                                                                                                                         |
| <https://www.nasdaq.com/articles/how-is-rwa-real-world-asset-tokenization-disrupting-industries> | Real World Assets (RWAs) encompass a broad spectrum of tangible and intangible assets, from physical properties and infrastructure to intellectual property and financial contracts.                                                                                                                                                     | Giving examples without definition | Enumerating examples is not defining RWA in any way.                                                                                                                                             |
| <https://blog.chain.link/real-world-assets-rwas-explained/>                                      | Tokenized real-world assets (RWAs) are blockchain-based digital tokens that represent physical and traditional financial assets, such as cash, commodities, equities, bonds, credit, artwork, and intellectual property                                                                                                                  | Giving examples without definition | Enumerating examples is not defining RWA in any way.                                                                                                                                             |
| <https://www.algorand.foundation/news/what-are-real-world-assets-rwas>                           | Real-world assets, or RWAs, refer broadly to any assets—whether physical, digital, or data-based—that derive their value from their existence outside of the blockchain. By tokenizing RWAs, you’re essentially creating a digital twin that exists on a blockchain                                                                      | Partially incorrect                | This is not the fully correct understanding. There are many digital assets existing outside of the blockchain, and have value (e.g. in-game off-chain currencies), yet they are UWA, not RWA.    |
| <https://www.ledger.com/academy/glossary/real-world-assets-rwa>                                  | Real-world assets (RWAs) are tangible and intangible assets or utilities that exist in the physical world.                                                                                                                                                                                                                               | Partially incorrect                | The article indicates ‘existence’ as a key definition item, while it should be actually existence in a public legal framework context connected with legal capacity to be owned and transferred. |

<br>


# Key Takeaways

\
The exploration of Real World Asset (RWA) reveals several critical insights:

* **Narrow Definitions Limit Scope:** The prevailing approach to RWA tokenization employs a narrow definition of RWAs, a methodology that is both conceptually flawed and commercially impractical.
* **Broad and Inclusive Definition is Essential:** A comprehensive and appropriate definition of RWA encompasses any asset that can be legally owned and transferred from one entity to another, within the framework of laws established by nations or international bodies.
* **Distinct from Unreal World Assets:** RWAs stand in contrast to Unreal World Assets (UWAs), which exist solely within virtual, digital, or theoretical realms and are regulated by internal policies and agreements crafted by private parties.
* **Beyond Physical Tangibility:** RWAs should not be narrowly equated with physical or tangible assets, nor considered the antithesis of intangible assets. The distinction lies in their legal, rather than physical, characteristics.
* **Industry Consensus is Lacking:** A global inconsistency and absence of consensus regarding the definition of RWA results in a fragmented landscape, hindering the development of universal tokenization solutions.


# Appendix B: Digitization vs Tokenization


# Existence vs Ownership

The initial point of clarification necessary is that, contingent on the particular context and circumstances, subjecting an asset to the digitization or tokenization pertains to either the:

* Reality of its existence (that is, recording the asset's existence) or
* Ownership of the asset (that is, recording the details of its ownership and the manner of ownership).

***Irrespective of the terminology employed, this process invariably involves the documentation of facts associated with that asset.***

\ <br>


# Hierarchy Of Terms

To ensure a clear understanding as we delve further into the topic, it is beneficial to comprehend the hierarchy of terms relevant to the documentation of Real World Assets (RWAs), and where ‘tokenization’ stands in that hierarchy. Here, we structure these terms, progressing from the most general to the most specific:

<figure><img src="https://lh7-us.googleusercontent.com/hzT9V7itnPDlIMlNJyn4gVZAE_3AAZP7rPcpOWbv_LZZo8UoNjlgnt_WsEYcZhj8i5Vx3T7L5o5c_jJo3dN3Mc4cCMymPFNDCpahqi-KywUkiEqlIYFA2MenQl03-zqdtmTM7Pjkx3z59YlPfvPpPlw" alt=""><figcaption><p> - Hierarchy of terms related to RWA documentation </p></figcaption></figure>

This hierarchical framework provides a structured approach to the documentation processes associated with RWAs, with each level introducing greater specificity and technical detail.




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