Initial asset owners on-ramp
To on-ramp to the DEX, asset owners transfer beneficial ownership into an ERC-721 token following the protocol standard (this standard includes governance & drag-along mechanisms).
Figure 1 - Initial Asset Owner On-Ramp
Fee and rewards
The initial minter of the ERC-721 token earns perpetual fees on trades involving that token.
Auditors earn fees per audit.
Auditors may undergo an identification process to become “trusted auditors” (approved by Exotic Vaults Foundation) with increased rewards and higher reputability weight.
The mechanism
To begin on-ramping to the DEX, asset owners, who will remain the legal owner of the individual asset, transfer the rights and benefits associated with the ownership of their asset into an ERC-721 token representing their ownership contract, in a standard defined by the Exotic Vaults Protocol.
The standard set by the Exotic Vaults Protocol will include a voting mechanism for all ERC-721 tokens relating to all key decisions of the asset the tokens are bound to, as well as a drag-along method to sell or burn all ERC-721 tokens relating to an asset in case a majority of ERC-721 holders wish to sell a whole asset.
The use case we expect to be the most popular is for there to be a separate and trusted physical custodian to the asset owner. This will allow Vaults to elect to hold only assets in the physical custodianship, and where the ERC-721 token was minted by: a pre-defined custodian. This use case can be seen in steps [1] where the custodian organises the contract for the transfer of the beneficial ownership and [2] where the token itself representing the contract is transferred back to the original asset owner.
To ensure the integrity of the DEX, independent auditors will be allowed to validate any tradeable ERC-721, and offer comments to reasons for rejection of the authenticity of the token (e.g. invalid contract, suspicious provenance, etc…). Failed audits should alert players on the DEX to avoid interacting with the token. [3]
The initial minter of the ERC-721 token in the format specified by the protocol will earn fees in perpetuity on any trade involving the token they created. Auditors will earn fees on each individual audit they perform. [8]
Independent auditors can optionally complete an identification process as a “trusted auditor” and be approved by the Exotic Vaults Foundation through a vote for increased rewards on each audit. Approved auditors will have a higher weight in the reputability score produced by the audit.
Proceeds Escrow & Redemption Claims
Proceeds Escrow (non‑interest‑bearing): Any cash proceeds linked to an asset (sale proceeds, insurance recoveries, licensing/exhibition fees) are held in a segregated, non‑interest‑bearing escrow (client‑money/trust account with a supervised PSP/EMI). No interest accrues. Only KYC/AML‑verified beneficial holders may claim their pro‑rata share. Unclaimed amounts remain segregated and are not re‑invested.
Redemption: A holder with 100% of a given asset token (or a DAO‑set super‑majority under a drag‑along) and completed custodian KYC may redeem the underlying asset in accordance with the custody deed.
Communications: The protocol will not market “yield”, “APY”, or “value growth” from escrow; distributions are framed strictly as property‑claim settlements upon realisation
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