The Asset Lifecycle

Developer's Guide to the Asset Lifecycle on Provenance Blockchain

Welcome to asset creation on Provenance Blockchain. This guide will walk you through the entire lifecycle of creating, managing, and transferring digital assets on a platform built specifically for financial services.

What is a Digital Asset on Provenance?

In simple terms, a digital asset is a unique, online representation of something valuable. Provenance Blockchain specializes in tokenizing Real-World Assets (RWAs)—from tangible assets like real estate to financial assets like investment funds or private equity.

The process of asset tokenization converts rights to an asset into a digital token on the blockchain. This makes the asset easier to manage, trade, and accessible to a wider range of investors.

On Provenance Blockchain, there are two primary pathways for tokenizing an asset, depending on its nature:

Fungible Assets (Tokens): For assets where each unit is identical and interchangeable, like shares in a fund, stablecoins, or a pool of loans. These are managed using the Marker module.

Non-Fungible Assets (NFTs): For unique, one-of-a-kind assets, like a specific mortgage, a piece of art, or a title deed. These are managed using the Metadata module.

Let's explore the lifecycle for each path.

Path 1: The Fungible Asset Lifecycle with Markers

If you are creating an asset where one unit is the same as another, you will use the Provenance Blockchain Marker.

What is a Marker?
A Marker is a special on-chain account that defines and governs a fungible token. It acts as a container that sets the rules for the asset, such as its total supply, who can create (mint) or destroy (burn) it, and how it can be transferred. Ownership of the Marker's asset is divided into fractional parts represented by a token.

The terms token and coin are often used together:

Token: The conceptual asset with all its rules and permissions, as defined by the Marker.

Coin: The transferable unit of the token that users send and receive in their wallets (e.g., 1000 my-cool-token).

The Marker Lifecycle

A Marker moves through a clear, state-driven lifecycle before its token can be used.

Creation (Proposed): A user submits a transaction to create a new Marker, defining its name, initial supply, and type (e.g., unrestricted or restricted). The Marker is now in a Proposed state.

Deposit Period: The proposal must be backed by a minimum deposit of 50,000 HASH within 48 hours. This prevents spam. Once the deposit threshold is met, the Marker can move forward.

Finalization: The Marker's creator finalizes its configuration. At this point, key attributes like the total supply can be locked in permanently. The Marker is now in a Finalized state.

Activation: The creator activates the Marker. It is now fully live on the network. Its tokens can be minted, withdrawn to user accounts, and transferred according to its rules. The Marker is now in an Active state.

Advanced Token Control

Markers provide powerful, granular control over your token through Access Grants. This is what sets Provenance Blockchain apart for creating sophisticated financial assets.

Permission	Description
`Mint`	The ability to increase the supply of the token.
`Burn`	The ability to decrease the token's supply.
`Deposit`	The ability to add other assets into the `Marker` account (e.g., collateral for an asset pool).
`Withdraw`	The ability to move tokens out of the `Marker` account to other users.
`Admin`	The ability to grant any of these permissions to other accounts or smart contracts.
`Transfer`	The ability to approve peer-to-peer transfers (for restricted tokens).

This system allows for two primary types of tokens:

Unrestricted Tokens: Can be freely sent between any two accounts, like a standard cryptocurrency.

Restricted Tokens: Require approval from a designated "transfer agent" for every transfer. This permission is typically granted to a smart contract that enforces rules, such as checking if an investor is accredited before allowing them to receive a security token.

Use Case: Asset Pools

A Marker can represent ownership in a collection of assets, such as a pool of loans that backs an Asset-Backed Security (ABS). The Marker account can hold the individual loan NFTs as collateral, while its token represents shares in the pool. A smart contract can even manage the payment "waterfall" to disburse funds to token holders.

Putting it into Practice: Creating a Marker

Below is an abbreviated command-line example of the Marker lifecycle.

javascript
# 1. Create a new RESTRICTED Marker with an initial supply of 5,000 shares
provenanced tx marker new "5000example-co.stock" --type RESTRICTED --from my-wallet

# 2. Grant the administrator full permissions
provenanced tx marker grant pb1pr6egk... "example-co.stock" admin,withdraw,burn,mint,transfer --from my-wallet

# 3. Finalize and Activate the Marker (assuming deposit is met)
provenanced tx marker finalize "example-co.stock" --from my-wallet
provenanced tx marker activate "example-co.stock" --from my-wallet

# 4. Delegate transfer authority to a smart contract to enforce trading rules
provenanced tx marker grant pb15fnwec... "example-co.stock" transfer --from my-wallet

# 5. Withdraw 1,000 shares from the Marker account to an investor's account
provenanced tx marker withdraw "example-co.stock" "1000example-co.stock" pb18wldir... --from my-wallet

Path 2: The Non-Fungible Asset Lifecycle with NFTs

If you are creating a unique, one-of-a-kind asset, you will use the Provenance Blockchain Metadata module to create a financial NFT.

Anatomy of a Provenance NFT

A Provenance NFT is defined by a data structure called a Scope. It has two unique features perfect for complex financial assets:

Extensible Records: A single NFT (Scope) can contain multiple, distinct data records. For a mortgage NFT, this could include the loan agreement, payment history, and property appraisal, each with its own version history.

Multi-Party Ownership: An NFT can have multiple owners with different roles. For example, a Value Owner is entitled to the financial value of the asset, while one or more Data Owners (like a loan servicer) have the right to update its data. This allows investors, controllers, and servicers to all participate in the asset's lifecycle.

Data Privacy: Proof without Exposure

A core challenge in finance is proving the integrity of data while keeping it private. Provenance solves this with the Contract Execution Environment (CEE).

The CEE operates off-chain. Instead of putting sensitive Personally Identifying Information (PII) on the public blockchain, you do the following:

Fingerprint the Data: Use a standard hashing algorithm to create a unique, tamper-proof "fingerprint" (hash) of your private data.

Record the Fingerprint On-Chain: Store this hash on the blockchain within the NFT's Scope.

Verify Off-Chain: To prove the data is authentic, you can share the private data with a counterparty, who can independently run the same hashing algorithm. If their result matches the fingerprint on the blockchain, the data is verified.

This provides an immutable, auditable proof of your asset's data and history without ever exposing the sensitive information publicly.

How Data is Structured

For easy onboarding, Provenance uses a generic Asset protobuf. This standard container can hold any type of NFT data, which is typically serialized to JSON for API interactions.

Protocol Buffers:

javascript
// The standard structure for onboarding any asset
message Asset {
  string id = 1; // Required UUID for the asset
  string type = 2; // User-defined type (e.g. LOAN, ART, FUND)
  string description = 3; // A brief description for display
  map<string, google.protobuf.Any> kv = 4; // Key-value store of all asset data
}

By understanding these two distinct pathways, you can leverage Provenance Blockchain's finance-grade toolkit to tokenize any real-world asset, complete with a robust lifecycle, granular control, and built-in data privacy.