# Lifecycle of a Tokenised Asset

The lifecycle of a tokenised real-world asset defines how it is created, distributed, managed, and ultimately settled or retired. This lifecycle is designed to be **explicit, state-driven, and auditable**, ensuring that asset behavior on-chain remains aligned with off-chain reality throughout its existence.

Each stage introduces different guarantees, risks, and controls. Skipping or collapsing stages is intentionally not supported.

***

#### Lifecycle Overview

At a high level, a tokenised asset progresses through the following states:

```
Onboarding
   ↓
Issuance
   ↓
Primary Distribution
   ↓
Secondary Transfers
   ↓
Corporate Actions
   ↓
Redemption / Settlement
```

State transitions are governed by protocol rules and, where necessary, external attestations.

***

#### Asset Onboarding (Pre-Issuance State)

Before any tokens exist, the asset must be onboarded.

This stage establishes:

* the asset’s legal and operational definition
* the roles responsible for custody, issuance, and attestation
* issuance limits and token parameters
* compliance and access control rules

No on-chain supply exists at this stage. The asset is **defined but inert**.

***

#### Token Issuance

Issuance is the transition from definition to on-chain existence.

During issuance:

* tokens are minted up to the authorized supply
* initial ownership is assigned (issuer, distributor, or escrow)
* issuance events are recorded immutably

Supply constraints are enforced strictly:

Minted Supply≤Authorized Asset Supply\text{Minted Supply} \leq \text{Authorized Asset Supply}Minted Supply≤Authorized Asset Supply

Any attempt to exceed authorized supply fails at the protocol level.

***

#### Primary Distribution

Primary distribution covers the first allocation of tokens to investors.

This may include:

* direct issuance to eligible wallets
* distribution via sale mechanisms
* allocation through intermediaries

All transfers during this stage are subject to:

* eligibility checks
* jurisdictional rules
* holding limits

Primary distribution is where most compliance constraints are applied.

***

#### Secondary Transfers

Once distributed, tokens may enter secondary circulation.

Secondary transfers:

* are peer-to-peer or marketplace-based
* remain subject to asset-level rules
* do not require issuer involvement

Transfer validity is evaluated atomically:

Transfer Valid=Esender∧Erecipient∧Rasset\text{Transfer Valid} = E\_{sender} \land E\_{recipient} \land R\_{asset}Transfer Valid=Esender​∧Erecipient​∧Rasset​

Where:

* EEE = eligibility
* RRR = asset rules

If any condition fails, the transfer does not execute.

***

#### Corporate Actions and Asset Events

Real-world assets may undergo events during their lifetime.

Examples include:

* yield or revenue distributions
* splits or consolidations
* partial repayments
* restructurings

Corporate actions are:

* explicitly declared
* mapped to deterministic on-chain effects
* constrained by prior onboarding definitions

No discretionary or silent adjustments are allowed.

***

#### Ongoing Attestation and Monitoring

Throughout its lifetime, the asset remains subject to reconciliation.

This includes:

* periodic attestations
* event-driven updates
* exception reporting

Missing or contradictory attestations may trigger:

* transfer restrictions
* issuance halts
* escalation paths

Continuity is not assumed — it is **maintained**.

***

#### Redemption and Settlement

Redemption represents the exit of tokens from circulation.

Redemption may occur when:

* an asset matures
* tokens are redeemed for underlying value
* early termination is triggered

On redemption:

* tokens are burned or marked as settled
* final entitlements are recorded
* asset lifecycle moves toward closure

Formally:

Circulating Supplyt+1=Circulating Supplyt−Redeemed Tokens\text{Circulating Supply}\_{t+1} = \text{Circulating Supply}\_{t} - \text{Redeemed Tokens}Circulating Supplyt+1​=Circulating Supplyt​−Redeemed Tokens

***

#### Lifecycle Completion and Archival

Once all obligations are settled:

* transfers are disabled
* issuance is permanently closed
* historical records remain accessible

The asset enters an **archived state**, preserving auditability without allowing further activity.

***

#### Lifecycle State Summary

| Stage                | Supply Mutable | Transfers Allowed | Key Controls              |
| -------------------- | -------------- | ----------------- | ------------------------- |
| Onboarding           | No             | No                | Legal + role definition   |
| Issuance             | Yes            | Limited           | Supply caps               |
| Primary Distribution | No             | Yes               | Eligibility checks        |
| Secondary Transfers  | No             | Yes               | Rule enforcement          |
| Corporate Actions    | No             | Conditional       | Governance + attestations |
| Redemption           | Yes (burn)     | No                | Settlement rules          |
| Archived             | No             | No                | Read-only                 |

***

#### Failure Handling Across the Lifecycle

The lifecycle is designed to **fail safely**.

At any stage:

* ambiguity leads to restriction, not continuation
* divergence triggers containment
* governance escalation is explicit

This prevents silent drift between on-chain state and off-chain reality.

***

#### Why a Structured Lifecycle Matters

Unstructured token lifecycles lead to:

* unclear investor rights
* hidden issuer control
* unresolvable disputes

A strict lifecycle ensures:

* predictable behavior
* enforceable constraints
* long-term institutional credibility

The protocol does not optimize for speed — it optimizes for **correctness over time**.