Asset Tokenization Studio (ATS)
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In a digital world, like stocks, bonds, and real estate are being turned into through asset tokenization. This process changes how these assets are managed and traded. Tokenizing assets improves accessibility, liquidity, and transparency, making it easier for more people (retail investors) to invest in traditionally exclusive and illiquid markets.
Asset tokenization creates on a blockchain or other distributed ledger technology (DLT) to represent ownership or interest in real assets like company shares, bonds, real estate, or commodities. These tokens, called security tokens, include rights like voting, dividends, and corporate actions. Like blockchain, DLTs ensure secure, transparent, and immutable transactions. This digital shift makes finance more efficient, transparent, and inclusive.
Tokenization offers several significant benefits:
Enhanced Liquidity: Enables 24/7 trading on digital exchanges.
Greater Accessibility: Opens up investments to retail investors.
Transparency & Security: Ensures secure, immutable transactions on a distributed ledger.
Cost Efficiency: Reduces transfer time and costs by eliminating intermediaries.
The tokenization process involves several key steps:
Asset Selection: Identify the real-world asset to tokenize, such as real estate, a bond, or an equity stake in a company.
Specification Definition: Determine the asset's digital specifications, including its value, the number of tokens to be issued, compliance rules, and metadata.
Distributed Ledger Selection: Choose a suitable distributed ledger to host the digital tokens.
Token Issuance: Issue security tokens on the selected distributed ledger, ensuring compliance with regulatory requirements.
Trading and Management: Once issued, these digital securities can be traded on digital exchanges, with transactions recorded transparently and immutably on the public ledger.
By transforming asset ownership into digital form, tokenization paves the way for a more efficient and inclusive financial system, opening up new opportunities for investors and asset owners.
...And more to be announced
Asset Tokenization Studio operates through a modular, multi-layer implementation to manage the full token lifecycle.
Access Control
ATS allows issuers to implement role-based access control, enabling them to assign specific permissions and roles such as Minter or Controller. This ensures that only authorized individuals can perform operations like minting or transferring tokens, enhancing security and governance.
Control List
ATS supports approval lists and blocklists of addresses to ensure that only approved participants can engage in token transactions. This ensures compliance with KYC and AML regulations, limiting token transfers to authorized parties.
Supply Cap
Issuers can set a maximum token supply to prevent unauthorized minting. This helps maintain transparency and investor trust by ensuring no tokens are issued beyond the predefined limit.
Pause
Issuers can temporarily pause all token transfers in the event of regulatory audits, security threats, or corporate actions, allowing full control during sensitive periods.
Lock
The lock function freezes specific tokens or accounts, useful for restricted trading periods, legal holds, or tokens subject to vesting schedules or escrow.
Snapshots
Snapshots capture token holder balances at any given time, providing accurate records for audits, dividends, or voting rights, ensuring compliance with corporate actions.
ATS provides an easy-to-use comprehensive framework and makes asset tokenization simple and ensures compliance with global regulations. ATS is an effective tool for issuers to tokenize assets safely and efficiently, opening up investment opportunities to retail investors. The architecture of ATS is built on several core components that facilitate tokenization and include:
Web UI: The user interface provides a graphical web interface for developers and non-technical users to interact and manage digital securities without requiring in-depth technical knowledge of the Hedera network.
Factory Contract: This contract is used to create new digital securities, like bonds or equities. It has methods like deployBond and deployEquity to generate these tokens. Each security token is created with a diamond proxy, a design that allows flexible and modular contract logic.
Resolver Contract: This contract links to different logic modules, each serving a specific function for the security tokens. When a tokenized asset needs to perform an action, it refers to the resolver contract to find the right module to execute that function.
Proxy Contract: This contract acts as a layer wrapped around each security token, directing operations to the main logic contract. If the rules or functions of a token need to change (e.g., due to new regulations), the proxy can be updated to point to a new logic contract via the resolver. This allows all assets to be updated without interrupting their operation.
This architecture allows administrators or issuers to update their digital securities without disruption and keeps the architecture more flexible, scalable, and efficient over time.
To streamline and simplify the asset tokenization process, Asset Tokenization Studio (ATS)—Hedera's open-source platform that allows issuers to create, manage, and operate in with global regulations by adhering to the guidelines set forth by (, ) and . ATS makes asset tokenization accessible through the below key components and features that are open-source under an Apache 2.0 license, with the source code to be publicly available on GitHub soon:
Additional features include support for popular wallets, including , , and , and also extend the ERC-1400 standard by integrating additional modules to manage asset-specific metadata directly on the Hedera network. This includes functionalities like managing coupon payments or approval lists on-chain, enhancing transparency, and mitigating off-chain management risks.
ATS integrates with key partners like , , and to facilitate the issuance and management of tokenized bonds and equities on the Hedera network. These partners provide solutions for / compliance, , wallet integration, infrastructure management, monitoring, and regulatory compliance.
The foundational core layer is based on the standard, which is interoperable with other key standards like , , , , and to offer a comprehensive solution for managing . It provides a comprehensive framework for managing . The core implementation layer includes the following modules:
These modules provide a solid framework for efficient and compliant token management. Future module enhancements, such as and Protected Partitions, will further enhance security and compliance.
is an extension of the through the combination of 4 independent ERCs:
: Defines partitions within a token, allowing token holders to have their total balance split across different partitions, such as 400 tokens in partition A and 600 in partition B. Depending on the specific use case, these partitions enable varying rights or restrictions to be applied to different segments of the same token. However, in many cases, partitions may not be necessary unless there is a need for differentiated classes of tokens or specific regulatory compliance.
: This standard allows for transfer validation to ensure KYC/AML adherence, enables forced transfers for legal or regulatory reasons, and supports linking tokens to off-chain legal documents. It also includes functions for issuing and redeeming tokens, providing a compliant framework for managing security tokens within a regulated environment.
: This standard is designed to manage and distribute off-chain documents associated with security tokens. It is part of the ERC-1400 family of standards, specifically tailored to address the needs of security tokens by providing a way to securely link legal or compliance-related documents to on-chain assets.
: Defines a method that allows a controller account (similar to a super user) to forcibly transfer tokens from one account to another without the token holder's consent. This capability is designed to enforce regulatory actions or legal requirements on security tokens.
The define layer builds on the core implementation by defining a range of , such as equities and bonds. It also defines the foundation for processing corporate actions, such as payments for equities and coupon payments for bonds. This layer is the foundation for the detailed customization provided in the next implementation layer.
The customize implementation layer ensures that the tokenized assets comply with specific legal and regulatory requirements for different jurisdictions, like the United States. Issuers can customize , such as shares and bonds, following local laws and regulations. Future updates will expand this customization to smaller jurisdictions and support unique asset types, making the system adaptable to evolving regulatory standards.
Smart Contracts: ATS uses enhanced factory contracts, audited by , to automate and standardize the tokenization process following the ERC-1400 standard. These contracts simplify the deployment of and ensure consistency across various assets while reducing development time.
SDK: The SDK provides a set of open-source tools and libraries for developers to build and deploy dApps on the Hedera network. It easily integrates and simplifies interaction with ATS smart contracts used to tokenize and manage .
For those interested in technical architecture, ATS utilizes factory contracts to create new digital securities, resolver contracts to manage and execute specific functions, and proxy contracts to enable seamless upgrades. When tokenization is initiated, two smart contracts are deployed, these contracts work together with the proxy contract to create, operate, and upgrade .
Editor: Krystal, Technical Writer
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Open-source, pre-built, and fully audited smart contracts that automate and standardize tokenization process according to the standard.
MetaMask is a web3 wallet to manage , interact with dApps, and participate in tokenized ecosystems on the Ethereum and EVM-compatible networks.
