Mechanics of On-Chain Tokenization

Learn On-chain Tokenization Procedural Details

On-chain tokenization refers to the process of converting real-world or digital assets into tokens that are represented and managed on a blockchain. This process involves several key mechanics that ensure the seamless integration of assets onto a blockchain network. Here is a detailed verbiage outlining the mechanics of on-chain tokenization.


Deal Origination (Off Chain)

Redemption and burning of tokens after identifying an asset tokenization project, talks are held with the issuer, tokenization platform, and other pertinent financial institutions.


Offering Configuration (Off Chain)

Investors review the offering and subscribe to it. The request goes to the transfer agent, and he approves the request.


Subscription (Off Chain)

Tokenization allows for fractional ownership of high-value assets, enabling investors to spread their investments across multiple assets.


Whitelisting (On Chain)

Following the approval of the subscription, the request is forwarded to the Tokenization Agent for wallet address whitelisting.


Investment (On Chain)

Once an investor’s address is whitelisted, they can proceed to invest in the offering.


Minting and Distribution of Token (On Chain)

The tokens are issued on the blockchain and given to investors upon the conclusion of the subscription process. At that point, the investors become the tokens’ legal owners. The funds raised are transferred to the issuer simultaneously.


Cap Table Update (On Chain)

After the distribution of tokens, the cap table is updated. The Transfer Agent can then view the percentage of holdings and tokens held by all investors.


Secondary Trading (ATS) (On Chain)

Investors have the opportunity to trade tokens in the secondary market through an order book mechanism, enabling them to buy or sell tokens.


Redemption and Burning of Tokens (On Chain)

In the event an investor chooses to redeem their tokens, the corresponding payment is sent to the investor, and an equivalent value of tokens is burned using a smart contract.

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