RWA glossary

Custody where specific, identified items — numbered bars, a named parcel — are held for the owner and segregated from the custodian’s own property. The distinction from unallocated matters enormously: an unallocated claim makes the holder an unsecured creditor of the custodian rather than an owner of anything.

Gold tokenization

The decision about how much of an oversubscribed offering each subscriber receives. Where demand exceeds the target, every line is scaled by the same ratio and rounded down to whole units, with the difference returned.

A record that can be added to but never edited or deleted. Enforced here by revoking update and delete permissions from the application’s database role and by triggers that raise an exception, rather than by convention.

A statement by an independent party that they observed something — that the metal is in the vault, that the loans exist. It evidences a moment rather than a continuous state, which is why cadence matters as much as the attestation itself.

Hundredths of a percent. 125 basis points is 1.25%. Used throughout because a rate held as a decimal fraction and multiplied across a large register accumulates rounding error that a fee schedule cannot afford.

The register of who owns what proportion of an instrument. Computed here in integer basis points and truncated, because a percentage held as a floating-point number and summed across a thousand holders does not reach 100.

Equity tokenization

A cap on how much of the supply one holder may own. Applies to secondary transfers only: a cap below 100% is unsatisfiable during primary issuance, because the first holder minted to necessarily holds the entire supply at that moment.

Anything an issuer does to an instrument after issuance — a split, a consolidation, a buyback, a vote, a maturity. The two that rewrite the register are splits and consolidations, and they are the ones that need a previewed plan.

What a holder paid for their position, used for gain reporting. On a transfer it follows the units at the sender’s average and is truncated, so the leftover minor unit stays with the sender — the direction that never overstates a gain.

The party that holds an asset on behalf of its owner. For physical assets the custodian is a single point of failure, which is why segregation, insurance and the storage jurisdiction are disclosed rather than assumed.

A message that has exhausted its delivery retries and been moved somewhere a person can see it. A destination, not a deletion: an event that was produced and never delivered is a fact somebody may have to explain.

A database rule checked at the end of a transaction rather than after each statement. Used for the ledger balance rule, because entries are inserted one at a time and the transaction is only required to balance once complete.

A payment of income to holders. Paid to holders of record as at a record date, with the pool split by largest remainder so the lines sum to exactly what was funded.

Asset lifecycle

Bookkeeping where every transaction has equal debits and credits. Balances are derived from the entries rather than stored, because a stored balance is a second source of truth that will eventually disagree with the first.

Whether a specific investor may hold a specific instrument. Determined by policy over declared attributes, and denied by default: eligibility must come from a rule saying so, never from no rule objecting.

Compliance engine

An administrator moving units without the holder’s signature. Necessary for regulated instruments — court orders, lost keys, sanctions — and a real power that must be disclosed to investors before they subscribe.

Whether one unit is interchangeable with another. Shares in one class are fungible; two different paintings are not. Getting this backwards is the most common modelling error: a yacht is non-fungible, but shares in the company that owns the yacht are fungible.

A limit on how much can be redeemed in one dealing period, protecting remaining holders when redemptions exceed what can be met. Read as distress, and also genuinely protective — both are true.

A sequence where each record stores the hash of its predecessor, so altering a historical record invalidates every hash after it. Makes tampering detectable; append-only enforcement makes it fail.

Whoever held the instrument at the record date, which decides who is paid a distribution. Not the same as whoever holds it on the payment date, and paying the latter pays the wrong people.

A value that makes a repeated request produce the same result as the first rather than a second effect. Required on every state-changing operation, because a retried payment request that creates a second payment is the failure that matters.

A method of splitting an amount so the parts sum exactly to the whole: give everyone their rounded-down share, then hand the leftover units one at a time to the largest fractional remainders. Ties break by index so the result is reproducible.

A period during which a holder may not transfer their units. Recorded on the position and honoured at both the transfer gate and the redemption gate, because a lockup that only one path checks is not a lockup.

A control requiring two different people for a consequential action — one to raise it, another to approve it. The approval binds to a hash of exactly what was approved, so an approval for one amount cannot be spent on another.

The smallest indivisible unit of a currency — pence, cents, satoshi. All money here is a whole number of minor units and never a decimal, because floating-point arithmetic on money is wrong in ways that only appear at scale.

Net asset value: the value of a fund’s assets less its liabilities, usually expressed per unit. Struck on a schedule by an administrator against a documented valuation policy. For illiquid holdings it is a judgement, not a measurement.

Fund tokenization

A table where domain events are written in the same database transaction as the state change that caused them, and published afterwards by a relay. The only arrangement that makes the change and its event atomic.

A token whose contract can refuse a transfer based on who the recipient is. For a restricted security this is not a feature but a requirement — a standard without it is the wrong instrument.

Token standards

An existing holder’s right to be offered units before they are sold to a third party. Common in private companies and expressible as a constraint on transfer rather than as an email thread.

Evidence that the assets backing an instrument exist. Frequently overstated: it attests to what an attestor observed on a date, and says nothing about encumbrance unless the attestation specifically covers it.

The instant that decides who is entitled to a distribution or a corporate action. Holders after it are not entitled; holders who sold before it are.

A holder returning units to the issuer for value. The only path where the register shrinks and money leaves, so the burn and the obligation to pay are written in one transaction or neither is.

Asset lifecycle

A correcting transaction that mirrors an earlier one rather than editing it. The original stays visible, which is what an auditor needs in order to see that something went wrong and how it was put right.

A database feature where a policy decides which rows a query can see, independently of the application. Set per transaction rather than per connection, because a connection-level setting survives into whichever request picks that pooled connection up next.

Reducing every subscriber proportionally when an offering is oversubscribed. Deterministic and reproducible here, which is what lets an investor’s complaint be checked rather than argued about.

Ensuring no single person can both originate and approve the same action. Conflicting role combinations are detected and surfaced rather than discovered during an examination.

The point at which investor money stops being the investor’s and becomes the issuer’s proceeds. Requires a second authoriser, and happens only after the units have reached the register.

Special purpose vehicle: an entity formed to hold one asset and issue claims against it. Keeps one asset’s risks from contaminating another’s, which is why one property generally means one vehicle and one series.

Re-authenticating shortly before a high-consequence action, even within a valid session. Required here for settlement and refunds within a five-minute window.

Where money that cannot be attributed to anyone is recorded. It is still somebody’s, so it is recognised as a liability rather than left off the books — a receipt that is not on the ledger is a receipt nobody is chasing.

One customer workspace, isolated from every other. Isolation is enforced in three independent layers so that a failure in any one does not expose data.

The party responsible for maintaining an instrument’s register. Tokenization substitutes a system for much of the manual work but does not remove the accountability.

A statement that total debits equal total credits across every account. If it does not balance, something is wrong that no report built on top of it can be trusted to reveal.

A claim against a custodian’s general holdings rather than to identified property. Materially riskier than allocated, and the difference is frequently glossed over in marketing.

The order in which cash is applied — fees, reserves, interest, principal, equity. Determines who absorbs a shortfall, and must be documented before there is one.

Tax deducted from a payment at source and remitted to an authority. Taken from each holder’s gross entitlement rather than off the top of the pool, so one holder’s tax is not everybody’s problem.