2. Asset Tokenization Overview

2.1 What is Asset Tokenization?

Real world asset tokenization involves creating a digital representation of a physical asset on a blockchain. Each token represents a portion of ownership, rights, or interest in the asset. Common asset types include Luxury goods, premium edition branded items, collectibles, rare art, etc.

2.2 Categorization of Tokenized Assets in QED Application

• Token: Tokenized assets without any restriction on the number of times an asset can be transferred.

• Certificate: Tokenized assets can be transferred only once and can only be returned to the creator. Certificates are created for products which are perishable or consumables.

2.3 Benefits of Tokenization

• Increased Liquidity: Enables ownership, authenticity, making assets accessible to a wider range of end users.

• Enhanced Transparency: All transactions are recorded on a tamper-proof ledger, providing a clear history of ownership.

• Reduced Transaction Costs: Smart contracts automate processes, reducing the need for intermediaries.

• Improved Security: Permissioned access and identity management enhance data security.

2.4 Token and Asset Management

QED Blockchain offers a comprehensive framework for managing tokens and assets on the network. Features include:

• Token Initialization: Create new token types and manage existing ones.

• Minting and Burning: Add or remove tokens from circulation based on business needs.

• Permissions Control: Define access rights for who can transfer, view, or modify tokens.

Network listeners and event triggers notify relevant parties when important events, such as token updates or minting, occur.

How does QED work to prove authenticity?

A physical item, a blockchain token and a database containing a description of the item and the unique blockchain identifier.

If the token id matches the one in the database and if the item matches the description in the database, the item can be seen as real.

You can skip this next part but at QED we love mathematical proofs.

To formalize the proof of authenticity based on the given conditions using formal logic, we can express the statement and reasoning as follows:

Let's denote:

L(x,y)L(x, y)L(x,y): Predicate indicating that ledger LLL contains an entry where xxx is the description of an item and yyy is the value for a token.

D(z)D(z)D(z): Predicate indicating that zzz is an item that matches the description xxx.

V(w)V(w)V(w): Predicate indicating that www is a token that matches the value yyy.

The given condition can be expressed as: ∀x∀y(L(x,y)→(∃z(D(z)∧∃w(V(w)∧w=y))))\forall x \forall y (L(x, y) \rightarrow (\exists z (D(z) \land \exists w (V(w) \land w = y))))∀x∀y(L(x,y)→(∃z(D(z)∧∃w(V(w)∧w=y))))

This statement reads: For all descriptions xxx and values yyy in the ledger LLL, if there exists an entry in LLL with description xxx and value yyy, then there exists an item zzz such that zzz matches xxx and there exists a token www such that www matches yyy.

To prove authenticity based on this:

Assume L(x,y)L(x, y)L(x,y) holds for a specific xxx and yyy.

By the condition, there exists zzz such that D(z)D(z)D(z) holds (i.e., zzz matches xxx).

Also, there exists www such that V(w)V(w)V(w) holds and w=yw = yw=y (i.e., www matches yyy).

Therefore, having zzz (item matching description xxx) and www (token matching value yyy) provides proof of authenticity as per the ledger entry L(x,y)L(x, y)L(x,y).

In logical terms: L(x,y)⇒(∃z(D(z)∧(∃w(V(w)∧w=y))))L(x, y) \Rightarrow (\exists z (D(z) \land (\exists w (V(w) \land w = y))))L(x,y)⇒(∃z(D(z)∧(∃w(V(w)∧w=y))))

Linking physical objects to QED tokens.

Physical objects are linked to QED tokens by providing a description of the item in a database entry. Descriptions can contain relevant data about the item including a physical description, SKU, codes, images etc.

For items that have a unique serial number that number can be added to the item's description.

It is not necessary for an item to have a unique serial number to have a QED token associated with it. For example, each pair of sneakers among 5000 or so identical pairs produced can have its own token associated with it.

Nothing needs to be attached or denoted on a physical item for a QED token to be created for an item.

Transferring tokens

There is no cost to either party when transferring a token.

Tokens can be transferred via two methods.

The holder of a token can print a QR code. When that QR code is scanned the scanner will receive the token. If the scanner does not have an account on the blockchain where the token is located, they will be asked to download, and app register an account and then they will receive the token.

The holder of a token can send the token directly to another party through the app. If the other party does not have an account on the blockchain where the token is located, they will receive a message or an email to download the app, register and account, and they will receive the token.

Counterfeiting items and tokens.

Blockchain tokens cannot be counterfeited. Each token on a blockchain is unique. An individual could buy a genuine item with a token, keep the genuine item and transfer a counterfeit item with a genuine token. Each time they chose to sell a counterfeit they would need to obtain a genuine example of that item to obtain a token. Should the counterfeit item be discovered it is easy to trace the history of the item through the blockchain and determine who the counterfeiter was.

QED token vs. NFTs. and crypto currencies.

While all are blockchain tokens there are some important differences in the nature of the blockchain they use in the purposes they are put to.

QED tokens use Hyper-ledger-fabric, a blockchain protocol that allows token transfers to occur without payment by either sender or receiver of a token. Users of QED tokens do not need to hold crypto currencies for transactions to occur. For NFTs, and Crypto currencies, a transaction fee in crypto is paid when buying or selling those tokens.

In common use NFTs are receipts for digital items, usually images. Transferring an NFT transfers the ownership of the digital item.

QED tokens are not designed to have value unto themselves. QED tokens are designed to enhance the value of physical items by providing proof of the authenticity of such items. QED tokens are not designed to trade independent of the item they are authenticating.

QED tokens can be used for non-physical items such as digital images or memberships, as is common with NFTs, but is primarily designed to be used to prove the authenticity of physical items.

Smart Contracts and Chaincode[1]

QED Blockchain utilizes Hyperledger Fabric’s Chaincode, a type of smart contract, to automate business processes. Chaincode runs on peer nodes and is executed when specific predefined conditions are met.

Benefits include:

Automation of Processes: Automatically executing contracts or workflows when conditions are satisfied.

Tamper-Proof: Once deployed, smart contracts are immutable, ensuring reliable and consistent behavior.

Secure and Transparent: Smart contracts run within the blockchain network, providing transparency and reducing the risk of fraud.

Applications of smart contracts range from automated supply chain management to asset transfers and settlement systems.

What is Private Blockchain[2]

Private Blockchain for Enterprises Blockchain technology has become increasingly popular in recent years. It is widely known for its decentralized nature and ability to provide a secure and transparent transaction platform. However, public blockchains like Ethereum and Bitcoin are not ideal for businesses as they lack control over who can access their sensitive data. This is where private blockchains come in.

A private blockchain is a permissioned blockchain where only selected participants are allowed to join the network. All participants are verified, and each participant has their own copy of the ledger. This means that only authorized users can access the data, and the data cannot be altered without the consensus of the network.