A Complete Custody Solution for Tokenized Securities

Last month, we discussed our network-agnostic approach for enterprises seeking to tokenize assets. This month, we’re focusing on our ‘Custody’ solutions, highlighting our strategy for smart contracts management and wallet services.

Blockchain technology is revolutionizing the way we think about digitization of finance. One of the key components of this technology is the blockchain wallet, which allows users to interact with the blockchain by signing operations. Wallets are used to sign transactions on the blockchain in order to validate information, authenticate, or trigger smart contract functions.

However, despite its numerous benefits, blockchain wallets can often be complex and difficult to use for the average user, increasing the risk of user error, such as misplacing private keys or sending funds to the wrong address. These errors can have serious consequences, including the loss of funds and the potential for fraudulent activities. To address these issues, it is crucial to simplify the user experience of wallets for institutional players. This can be achieved through the development of user-friendly interfaces, permission systems, and automation.

For years already, Tokeny has provided solutions to facilitate operations for users, being issuers, agents, or investors. Tokeny has not and doesn’t plan to develop a proprietary solution for blockchain wallets. We believe in self-control and direct ownership of assets and want to remain agnostic in terms of wallet solutions. Our role is to integrate these blockchain solutions into the T-REX tokenization platform in order to provide a good and secure user experience.

Each of the different roles presented below has a defined set of available actions that can be signed by a wallet:

• The issuer (i.e., owner) is the top level administrator. An issuer can mostly appoint/revoke agent(s).
• Agents manage the day-to-day operations on behalf of the issuer, such as the token supply, investor qualification, redemption… Agents use their wallets to sign these actions (i.e., blockchain transactions).
• Investors use their wallets to control their identity and the tokens assigned to them.

We distinguish several types of wallets:

Custodial Wallets vs. Non-custodial Wallets

We usually talk about custodial wallets when a third-party keeps and/or manages the private keys of the wallet. Custodial wallets solutions enable a high-level of automation and security, but can be subject to operational constraints linked to crypto-assets regulations.

Non-custodial wallets are managed directly by the end-user. With recent developments, they are now much easier, secure and cost-effective to use and are probably the future of this industry.

Integrated Wallets vs. Connected Wallets

We’ve integrated custodial and non-custodial wallet providers into our platform. These integrated wallets can be provided automatically to Issuers, Agents, and Token holders.

Signatures are made from the front-end, or automated if using custodial wallets, and the platform is connected to the wallet provider by API to trigger the blockchain operation. A gas tank feature enables gas-less transactions. As a result, the platform handles both the preparation and the signature information of the users’ transaction. It enables a simplified UI flow and facilitates automation.

Alternatively, thanks to connections with Metamask and WalletConnect, the T-REX platform is compatible with all the key wallet providers and digital assets custody solutions of the industry.

At the end of the day, our ultimate goal is to foster comfort and confidence among users when using our wallet solution. Regardless of their choice of wallets, we aim to empower our platform’s users, ensuring ease and confidence in wallet navigation.

Stay tuned for next month’s edition!