Translating the Physical Into the Digital…
We have talked at length about asset tokenization and why Konrad is a great gateway for you to get started, but behind the scenes, how do these back-end processes really work? What happens when physical assets get listed on the blockchain? Let’s dive deeper to figure it out.
Imagine you are a mining company looking to list your precious metals on the blockchain for profit. The process of registering your raw material assets and tokenizing them will include multiple steps: the affirmation of ownership, asset valuation, asset mapping and registration, asset fractionalisation and token optimisation. Following an affirmed ownership and asset valuation, the next step that proceeds is the asset mapping mechanism.
So, How Does Konrad’s Asset Mapping Mechanism Work?
Accuracy is crucial to asset mapping and can leave no margin for error. To ensure the precision of their asset mapping mechanism, Konrad has designed and implemented a two-layered verification model consisting of an affirmation of ownership and an anti-counterfeiting system.
1. Affirmation of Ownership
Affirmation of ownership refers to the act of ensuring sufficient authorisation protocols have been assigned in the ledger to define ownership, the transfer of licence and issued assets. An asset issuer is defined according to the general user guidelines based on public key infrastructure, KPI or other technology on the blockchain. Regulatory institutions can then ascertain the identity of the issuer by co-signing with an asset issuer, or presenting the issuer with a digital certificate.
2. Anti-counterfeiting System
Anti-counterfeiting system refers to the authentication of real assets with chip technology, anti-forgery label or QR code among others. Once the asset is marked with a unique identifier, it will be authenticated with hash functions and time stamps to prevent forgeries, functioning as a proof of authenticity.
After the accuracy of the asset mapping is ensured, Konrad will design an asset mapping mechanism through smart contracts (internal data) and oracle machines (external data). The process of asset tokenization mapping mechanism is as illustrated in the figure below:
As seen from the figure above, Konrad’s asset tokenization mapping mechanism can be separated into three distinct layers:
1st Layer: The Physical World
The physical world represents the initial states of raw materials.
2nd Layer: Mapping Layer
The mapping layer elaborates on the tokenization mechanism used.
3rd Layer: Blockchain Layer
The blockchain layer documents the transaction data of tokenized assets.
Contract Layer
To gel it all in, the contract layer consisting of a smart contract API and the oracle machine will activate and facilitate the smooth collaboration among these three layers. Particularly in the mapping layer, a trust fund model will be employed to manage the assets and resolve issues pertinent to tokenization and the fractionalisation of tokenized assets.
Conclusion?
Asset mapping is one of the key factors to success in asset tokenization. After all, no investor wishes to partake in an investment that is discovered to be a fraud, a stolen goods, or an utterly worthless asset. Konrad’s two-fold verification model ensures the assets are what they say they are, and truly belong to those who have listed them on the blockchain.
With accuracy and precision performed through smart contracts and oracle machines, human error is minimised, cutting a good deal for investors out there looking to get started.
In this article, we have given you a general overview of Konrad’s asset mapping mechanism but we have yet to tell you how the trust fund model in the mapping layer works. Interested to find out more? Stay tuned to Part 2 of this article where we delve into the workings behind the mysterious mapping layer.
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