Tokenisation Framework
Singularity Finance has devised a robust tokenisation framework that allows seamless conversion of real-world assets and services into tokenised assets via a tokenised funds structure. It not only allows a platform to securely tokenise and trade these assets, fulfilling all the compliance requirements, but also provides full transparency and verifiability on usage of the underlying. The non-custodial blockchain system ensures that users are always in full control of their assets. Singularity Finance’s tokenisation framework supports a wide range of asset classes:
Singularity Finance understands the concerns of organisations interested in the tokenisation space and therefore offers a comprehensive suite of services to accommodate the tokenisation process. This includes providing the technical infrastructure required to create and manage tokenised assets, assuring compatibility with the Layer-2 while offering legal support to navigate the regulatory landscape.
It also ensures that all tokenised assets comply with KYC/AML regulations and meet the standards of both local and global regulatory frameworks. Singularity Finance understands that some sectors are extra sensitive owing to various data protection and legal compliance regulations and therefore offers access to legal experts who specialise in blockchain regulations, ensuring that tokenised assets are legally compliant from the outset.
Organisational Setup
Legal and Regulatory Structure
Singularity Finance will leverage Cogito’s robust legal framework, designed to provide the highest level of investor protection and compliance.
Fund Regulation: Tokenised funds are fully regulated, ensuring strict regulatory oversight and adherence to international standards.
Custodian and Fund Administrator: The fund uses a reputable regulated custodian and investment manager to manage assets, ensuring that all investor capital is securely held and managed within a compliant and legal structure.
Regulated Broker and Custodian
Cogito partners with a multi-regulated global broker and custodian to safeguard investors’ funds that are regulated by several prominent authorities to provide regulatory compliance and secure custody.
Segregated Portfolio Structure: Funds operate as segregated portfolios, offering an added layer of protection. This structure ensures that the assets of each fund are legally separated, providing enhanced security for investors in case of insolvency or financial difficulty.
Off-Chain Security Measures
While the transparency of NAV and other key metrics are provided onchain, SFI employs robust offchain security measures to safeguard against onchain attacks and vulnerabilities.
OffChain Security Benefits: Critical security protocols, such as custodial operations and fund management, are executed offchain, protecting investor assets from potential blockchain-specific risks.
Secure Custody: Assets are stored by a licensed trust company, adding a layer of security and regulatory oversight beyond the blockchain.
Bankruptcy Protection
In the event of financial distress, the fund’s legal structure offers bankruptcy protection through its collective investment vehicle, ensuring that investors’ assets remain protected and separate from any potential liabilities of the fund manager or broker.
Token Lifecycle
Onboarding & KYC
Subscribing to tokenised RWAs involves completing the onboarding and KYC process, ensuring compliance with regulatory standards. This includes:
Basic Information: Investors provide personal details via a registration form that takes about 5 minutes.
KYC Verification: Investors must submit identity documentation, proof of address, and complete a liveness check using the secure Sumsub platform for identity verification and Anti-Money Laundering (AML) compliance.
Required Documents: A valid driver’s license, passport, national ID, residence permit, etc.
Wallet Screening (for stablecoins): To ensure security and compliance, investors using stablecoins must have their wallets screened further.
Additional documentation is required for legal entities, and the onboarding process is customised based on the business’s structure.
Token Issuance
Once the underlying asset is acquired, tokenised RWAs are minted as ERC-20 tokens, with each token backed 1:1 by traditional assets.
Wallet Compatibility: Tokens are compatible with Ethereum-based wallets, such as Metamask, Trust Wallet, and Phantom.
NAV Tracking: Investors can monitor the value of their tokens, which fluctuates with changes in the Net Asset Value (NAV).
Daily NAV (Net Asset Value) Transparency
The SFI framework ensures maximum transparency by publishing its Net Asset Value (NAV) onchain daily. This allows investors to track the real-time value of their portfolios with complete visibility.
NAV Calculation: The NAV is calculated by subtracting the fund’s total liabilities from its total assets and dividing the result by the number of shares in the fund. A higher NAV signals an increase in the value of the underlying assets and, consequently, the investor’s portfolio value.
Onchain Access: Publishing the NAV on-chain ensures that this crucial data is decentralised, immutable, and accessible in real-time, enhancing investor confidence in the tokenised fund.
Secondary Market
Investors can transfer tokens to other whitelisted wallets and across various decentralised protocols, offering flexibility and liquidity that traditional assets often lack.
Whitelisted Wallets: Transfers are only allowed between wallets that have completed KYC, ensuring compliance.
Last updated