The legal architecture is the load-bearing structure of the entire platform. Technology can distribute yield automatically, but only if token holders have legally enforceable rights to that yield in the first place.
Each asset admitted to the Fractalized platform is held by a dedicated Special Purpose Vehicle (SPV). The SPV is a standalone legal entity whose sole purpose is to hold the interest in a specific asset, receive the income generated by that asset, and distribute that income to its beneficiaries. Key properties of this structure:
Fractalized token holders hold income rights, a legally defined entitlement to two categories of economic benefit from the SPV, both proportionate to the token holder’s share of the total token supply: first, a proportional share of the net operating income generated by the SPV’s asset, distributed according to the SPV’s governing documents on the agreed distribution schedule; and second, a proportional share of any net proceeds generated by the sale or liquidation of the asset, distributed to token holders upon conclusion of that event. A token holder’s economic position therefore reflects both the ongoing yield from the asset’s operations and the residual value of the asset itself.
Direct asset ownership would require each investor to be registered as an owner in the relevant jurisdiction, for a vessel, maritime registration in each investor’s home country; for a credit facility, direct lender registration with the relevant financial authority. Income rights, structured appropriately within the applicable legal framework, provide investors with the full economic benefit of asset ownership, both the ongoing yield stream and the participation in any asset sale upside, without the operational and regulatory complexity of direct ownership.
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The token is the onchain representation of a legally defined income right in the SPV. It contractually entitles the holder to a proportional share of operational income distributions and of any net proceeds from the sale or liquidation of the underlying asset. The smart contract’s distribution function executes what the SPV’s governing documents mandate.
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Three distinct origination channels feed assets into the platform. All three produce the same output: an SPV holding a single cash-flow-generating asset, a token representing the income rights to that asset, and a liquidity pool listed on the Layer 1 exchange. The structuring and tokenization pipeline is standardized regardless of how the asset enters the system.
Fractalized operates a proprietary warehouse facility that acquires qualifying assets directly. The ability to close quickly with cash provides negotiating leverage that typically translates into acquisition at a discount to fair market value. The warehouse facility takes the asset through SPV structuring, tokenization, and listing on the exchange. The preminted tokens are owned by the warehouse facility at t0, and the warehouse sells down its position over time through normal exchange activity. During the sell-down period, the warehouse earns the asset's full yield on retained tokens.
External funds and asset managers can bring assets they own or plan to acquire through Fractalized's structuring and tokenization infrastructure. The fund receives tokens representing the income rights of the underlying asset and sells down through the exchange. This channel scales origination beyond Fractalized's own balance sheet. The fund provides the asset and acquisition capital; Fractalized provides the structuring, tokenization, listing, and liquidity infrastructure.
Asset owners can tokenize assets they currently hold and operate. The owner enters a binding income rights agreement with a dedicated SPV, receives all tokens at tokenization, and continues to earn the asset's yield through those tokens exactly as any other holder would. When the owner wants partial or full liquidity, they sell tokens through the exchange. Yield on sold tokens redirects to the new holders. The owner retains operational control of the asset (subject to the SPV's governing documents) and gains optional liquidity without forced sale.