Regulatory-Compliant On-chain Asset Liquidity & Deep-Tech Infrastructure

1.1. The Evolution of Blockchain Finance and AFun's Vision

The convergence of traditional financial markets and blockchain technology is evolving beyond simple stores of value into a phase where all Real-World Assets (RWA) are brought on-chain. AFun combines advanced financial engineering with robust blockchain architecture to inject liquidity into illiquid assets, building a next-generation global financial infrastructure that allows anyone to access assets transparently and securely.

1.2. Macro Outlook and Limitations of the RWA and STO Markets

According to the Boston Consulting Group (BCG), the tokenization of illiquid assets is projected to become a $16.1 trillion global market by 2030. However, to absorb this massive capital on-chain, the industry must fundamentally resolve the complex regulatory requirements (KYC/AML) of various financial authorities and the severe data fragmentation between public blockchains and legacy financial networks.

1.3. The Solution: Regulatory-Compliant On-chain Asset Liquidity Infrastructure

AFun introduces a 'Regulatory-Integrated Hybrid Architecture.' By embedding offline regulations, such as the Capital Markets Act, directly into the smart contract code level and leveraging Zero-Knowledge Proofs (zk-SNARKs) and Multi-Party Computation (MPC), AFun provides a flawless, regulatory-compliant environment where global capital can flow with maximum security.

2.1. Hybrid Blockchain Network Structure

AFun adopts a hybrid model that combines the trustless nature of public chains with the privacy protection of private chains. Through our blockchain technology partnership with Samsung SDS, we have secured enterprise-grade network scalability capable of seamlessly processing massive traffic and institutional-scale assets without latency.

2.2. Rollup-like State Anchoring

Large-scale RWA trades and sensitive transactions are prioritized on our high-performance private chain. The state transitions from the private chain are compressed into cryptographic hashes (State Roots) at regular block intervals and anchored to the public mainnet. This ensures privacy while relying on the public chain's integrity for absolute finality.

2.3. Compliance Layer Integration

An independent 'Compliance Layer' is positioned between the blockchain core and the application layer. By applying an Interceptor pattern prior to transaction execution, unauthorized asset transfers between wallets are fundamentally blocked.

3.1. ERC-3643 Based Regulatory Integration Model & Identity Registry

AFun's STO and RWA tokens extend the ERC-3643 (T-REX Protocol) structure, the global standard for security tokens. Upon token transfer, the smart contract utilizes a Validator node to cross-verify the sender's and receiver's on-chain Identity Registries. Transactions are reverted immediately if investment limits are exceeded or addresses appear on sanction lists.

3.2. KCB-Linked Zero-Knowledge Proof (zk-SNARKs) Authentication (zk-KYC)

We implement rigorous real-name authentication without recording users' Personally Identifiable Information (PII) on the blockchain. Once KCB (Korea Credit Bureau) performs off-chain KYC and issues a Verifiable Credential (VC), the user generates a zk-SNARKs-based Proof. Even without knowing the personal data, the on-chain contract mathematically verifies that the following statement is true:

3.3. Automated Dividend and Corporate Action Protocol

We deploy a 'Corporate Action' protocol that automatically distributes yields generated from RWAs and security tokens to token holders at a specific snapshot, ensuring mathematical transparency in the execution of rights.

4.1. Distributed Key Generation (DKG) & Non-custodial Environment

While supporting a mass-market, non-custodial multi-chain environment, we apply a DKG protocol where a single private key never exists in memory to protect institutional assets. Nodes mutually verify the validity of random number generation via zero-knowledge proofs and exclusively hold independent key shares (S_i).

4.2. t-of-n Signature Restoration using Lagrange Interpolation

During transaction signing, t valid nodes complete the signature through Homomorphic Encryption-based communication. The cryptographic signature restoration equation is defined as:

Through this process, the key shares of each node generate a single, mathematically perfect on-chain signature without external exposure, dramatically reducing gas fees.

4.3. Hierarchical Role-Based Access Control & On-chain Governance

The complex internal control procedures of corporate clients (Maker-Checker-Approver) are cryptographically enforced within the smart contract wallet structure, perfectly protecting assets from insider threats and external hacks.

5.1. Cross-chain Bridge & HTLC Integration

To prevent double-spending during cross-mainnet asset transfers, we implement Hash Time-Locked Contracts (HTLC). Transactions are completed atomically only when the smart contracts on both chains verify the identical cryptographic pre-image.

5.2. Core Banking System API Gateway

We provide standardized API gateways communicating with the ledger systems of traditional financial institutions, ensuring real-time synchronization between fiat currency deposits/withdrawals and the minting/burning of on-chain assets.

6.1. Decentralized Oracle Network (DON)

To evaluate the value of RWAs, multiple independent nodes fetch off-chain data. By updating the weighted median—excluding outliers—to the on-chain state, we eliminate data manipulation caused by a Single Point of Failure (SPOF).

6.2. Merkle Sum Tree-Based Proof of Liabilities

We mathematically prove that the deposits (liabilities) within the platform match the off-chain balances (assets) exactly 1:1. Wallet addresses and balances form the leaf nodes of a Merkle Tree. Users can cryptographically and transparently verify the preservation of their assets via the Root Hash and their specific Merkle Proof, without exposing the entire ledger.

7.1. Case 1: Global RWA Tokenization

Through cooperation with MK Lending, a US-based mortgage finance specialist, we securitize a global underlying asset pool worth tens of billions of dollars on-chain, supporting borderless fractional ownership and trading.

7.2. Case 2: Regulatory-Compliant STO Issuance

Operating within the boundaries of the Capital Markets Act, we tokenize corporate bonds and equities, supporting seamless data integration with authorized OTC exchanges.

7.3. Case 3: Enterprise/State-Backed KRW Stablecoin

We design a 100% cash-equivalent collateralized stablecoin utilized as the base currency for foreign remittance and B2B payments. By integrating PoR technology, bank run risks are systematically controlled.

8.1. Formal Verification

Mathematical integrity is proven prior to smart contract deployment, and vulnerabilities are preemptively blocked through cross-audits by top-tier global security firms.

8.2. Global Regulatory Compliance

We fully apply privacy-preserving logic that complies with global virtual asset regulatory standards, including Korea's Capital Markets Act and Electronic Securities Act, Europe's MiCA, and international data localization requirements.