Banc Smart Assets (BSA)

Introduction

BAS (Banc Smart Assets) are the cornerstone of Banc Protocol’s financial abstraction layer. They represent the transformation of traditional legal and financial instruments — such as equity, debt, funds, derivatives, and real estate titles — into self-executing digital contracts governed by cryptographic proof and on-chain compliance logic.

A BAS is not a static token; it is a programmable financial object that encodes:

• The legal definition of ownership, redemption rights, and obligations.

• The compliance policies that determine who can hold, transfer, or convert it.

• The audit trail that continuously proves lawful behavior through cryptographic evidence.

By design, BAS bridge law ↔ code ↔ value, embedding regulation directly into blockchain infrastructure and creating a new foundation for compliant, privacy-preserving digital finance.

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Purpose and Advantages

Objective	Description
Legal Fidelity	Encode contractual clauses and investor rights as verifiable code.
Regulatory Enforcement	Integrate jurisdiction-specific policies directly into asset logic.
Programmability	Allow conditional behaviors (lock-ups, conversions, dividends).
Confidentiality	Store all sensitive data as encrypted metadata handled by TEE.
Auditability	Produce immutable compliance proofs for every life-cycle event.

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Architecture Overview

A Smart Asset is composed of three layers:

┌────────────────────────────┐
│  Smart Asset Contract      │
│  (enforces policies)       │
├────────────────────────────┤
│  Compliance Layer (TEE +   │
│  PLONK Proofs)             │
├────────────────────────────┤
│  Legal Metadata Layer      │
│  (static + dynamic +       │
│  confidential data)        │
└────────────────────────────┘

Each asset instance is created from an Asset Class and inherits its default Policies while allowing issuer-specific customization at issuance. Issuers can customize dynamic policies at issuance while maintaining shared governance and verification logic.

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Asset Classes

An Asset Class defines the template for an entire category of financial instruments under Banc. Examples include: Private Equity Fund Shares, Corporate Bonds, Convertible Notes, or Carbon Credit Certificates.

Structure

• Code: Unique identifier for the asset class.

• Issuer: Verified entity address and jurisdiction.

• Static Metadata: Immutable parameters (e.g., governing law, currency).

• Dynamic Metadata: Variables defined during issuance (e.g., valuation, coupon rate).

• Confidential Metadata: Sensitive data processed privately in TEE.

• Policies: List of static and dynamic compliance rules.

Once registered, an Asset Class can be reused across multiple issuances with different policy parameters.

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Asset Policies

Policies define the behavioral logic of each BAS — determining what is permitted or restricted during its lifecycle (issuance, transfer, redemption).

Policy Types

• Static Policies: Immutable rules bound to the Asset Class (e.g., “KYCRequired,” “AccreditedInvestorsOnly”).

• Dynamic Policies: Adjustable conditions defined per issuance (e.g., “Lockup180Days,” “Jurisdiction=SG”).

Native Policies Supported by Banc

Policy	Type	Description
Transferable	Static	Allows or prohibits transfers. May include expiry date.
LockupPeriod	Dynamic	Minimum holding period before transfers are permitted.
MaxSupply	Static	Caps total issuance units.
MaxOwners	Static	Restricts number of holders.
JurisdictionPolicy	Static	Limits eligible regions.
KYCRequired	Static	Requires validated credential NFT.
Cosigner	Dynamic	Requires additional signatures for execution.
Traceable	Static	Enables issuer-level visibility via zero-knowledge audit proofs.
Burnable	Static	Allows destruction upon redemption.
CustomPolicyFunction	Dynamic	User-defined Boolean rule compiled and stored on-chain.

Execution Flow

Transaction → Load Relevant Policies → 
Evaluate Each → All Must Return TRUE → 
Commit State & Generate AuditHash

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Data Model

{
  "Asset_id": "BANCFUND2025-0001",
  "class_code": "BANCFUND2025",
  "issuer": "0x1d3F...E21",
  "owner": "0x8aF0...C99",
  "metadata": {
    "jurisdiction": "SG-MAS",
    "valuation": "confidential",
    "type": "Private Equity Fund"
  },
  "policies": ["Lockup180Days", "AccreditedOnly"],
  "audit_hash": "0x90ab...ffee"
}

All sensitive fields (e.g., valuation, investor data) remain encrypted, while compliance proofs are publicly verifiable.

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Lifecycle of a BAS

Each BAS follows a standardized lifecycle:

1. Instantiation: Asset Class defined and registered on-chain.

2. Issuance: Tokens created via verified compliance proofs.

3. Transfer: Policy engine validates transfers under KYC + jurisdictional constraints.

4. Event Management: Corporate actions (e.g., dividends, conversions) triggered automatically.

5. Audit Trail: Every state change logs a new AuditHash for regulator access.

This lifecycle ensures continuous compliance, full auditability, and zero exposure of private data.

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Legal Abstraction to Code

Banc translates real-world legal agreements into code through a structured compliance compilation process:

Legal Clause → Structured Schema → Policy Definition → Smart Contract → Compliance Module

This design allows auditors and regulators to trace every rule back to its original legal clause — ensuring verifiable equivalence between law and execution.

Case Studies

(1) Tokenized Fund

A private fund issues digital shares through Banc.

Setup

• Asset Class: “Private Fund Share 2025.”

• Static Policies: Non-transferable, KYCRequired, Traceable.

• Dynamic Policy: Lockup = 365 days.

Lifecycle

1. Investors verified in TEE (KYC + Accreditation).

2. Proof generated → issuance authorized.

3. Fund tokens distributed to verified vaults.

4. After lock-up, transfers allowed among accredited addresses.

5. Regulator verifies AuditHashes monthly.

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(2) Convertible Bond / Equity

Asset Class: “Series A Convertible Note.” Policies: Lockup = 1 year, Convertible, Burnable. Conversion Feature:

• Triggered when issuer valuation > $10 million.

• Conversion Ratio = 1:100 Note → Share.

All logic executed automatically by Banc’s Policy Engine; proof of compliance logged at each stage.

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Advanced Features

Feature	Description
Conversion Contracts	Handle destruction and re-issuance of tokens during conversions.
Confidential Voting	Token-weighted decisions using sealed-ballot ZK voting.
Revenue Distribution	Automated dividend payment through smart-policy triggers.
Multi-Asset Collateralization	Combine several bAssets as collateral in DeFi systems.
Cross-Jurisdiction Transfers	Execute transfers between legal frameworks using linked compliance modules.

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Developer Integration

Create a New Asset Class

await banc.asset.createClass({
  code: "BOND2026",
  issuer: "0xIssuer",
  jurisdiction: "EU-MiCA",
  metadata: { type: "Corporate Bond", coupon: "5%", tenor: "2y" },
  staticPolicies: ["KYCRequired", "Transferable", "Lockup365Days"]
});

Issue Tokens under that Class

await banc.asset.issue({
  classCode: "BOND2026",
  to: "0xInvestor",
  amount: 1000,
  proof: await banc.zkp.generateProof("Issuance")
});

Transfer (Compliant & Private)

await banc.asset.transfer({
  assetId: "BOND2026-00045",
  to: "0xNewHolder",
  proof: await banc.zkp.generateProof("PrivateTransfer")
});

Developers interact exclusively through the Banc SDK or REST API; all proofs and compliance validations are handled automatically behind the interface.

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Benefits for Stakeholders

Stakeholder	Benefit
Issuers	Regulatory automation, reduced issuance cost, continuous audit readiness.
Investors	Private ownership, verifiable rights, transferable under compliance.
Regulators	Real-time view of lawful activity without data exposure.
Auditors	Immutable, mathematical evidence for every transaction.
Developers	Framework for building financial DApps with built-in compliance.

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Future Extensions

1. Derivatives Framework — create programmable options and swaps with ZK settlement proofs.

2. ESG and Carbon Credits — embed sustainability compliance modules for asset issuance.

3. Automated Tax Reporting — optional TEE modules generating encrypted jurisdictional tax summaries.

4. Privacy VM Integration — Smart Assets executable inside Banc Privacy VM for full confidential logic.

5. DeFi Interoperability — allow compliant Smart Assets to be collateral in external protocols via zkBridge.