LiveArt Protocol

Institutional Architecture for Tokenized Real-World Asset (RWA) Trading

1. Overview and Strategic Objective

LiveArt is an institutional-grade protocol for the tokenization, distribution, and secondary trading of cultural real-world assets (RWAs), with an initial focus on fine art.

The protocol is designed to solve three structural challenges inherent to illiquid cultural assets:

1. Limited investor access due to high ticket sizes

2. Fragmented primary distribution across geographies and investor bases

3. Insufficient secondary liquidity post-issuance

LiveArt addresses these challenges through a multi-chain primary issuance framework combined with a consolidated secondary liquidity layer, while maintaining unified asset supply, custody integrity, and settlement finality.

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2. Asset Tokenization Model

Each underlying artwork is represented onchain via a single, fixed global token supply, corresponding to 100% of the economic interest in the asset.

• Each artwork is fractionalized into fungible RWA tokens

• Total supply is immutable and defined at issuance

• Token holders hold proportional economic rights linked to the underlying physical asset

• The physical artwork is held under institutional custody (off-chain), while economic ownership is managed onchain

This structure enables precise ownership accounting while supporting large-scale distribution.

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3. Two-Layer Market Architecture

3.1 Primary Market — Initial Distribution

The primary market is designed for capital formation and distribution efficiency.

Key characteristics:

• LiveArt acquires and custody-holds a physical artwork

• A fixed supply of RWA tokens is issued against the asset

• Tokens are offered at a predefined initial valuation

• Distribution may occur simultaneously across multiple blockchain networks

Unified Global Supply

Although primary distribution may take place on multiple chains, token supply is global and unified:

• There is one canonical supply cap per artwork

• Cross-chain coordination is handled via Layer-0 messaging infrastructure

• Issuance on multiple networks does not result in duplicated supply

This allows LiveArt to leverage the investor base and distribution channels of multiple ecosystems without fragmenting ownership.

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3.2 Token Architecture and Custody Model

The protocol separates ownership representation from trading liquidity to ensure clarity, safety, and market efficiency.

Canonical RWA Token (Locked Asset)

• Represents the underlying ownership interest

• Non-transferable during active trading

• Locked in a custody smart contract upon purchase

Wrapped Artwork Token (Liquidity Instrument)

• Minted 1:1 against locked RWA tokens

• Fully backed at all times

• Freely transferable and chain-native

• Used exclusively for secondary market trading

This separation ensures:

• Clear asset backing

• Elimination of double-spend or synthetic exposure

• Clean unwind during settlement or buyout events

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3.3 Cross-Chain Distribution Flow (Illustrative)

Example scenario:

• An artwork has a total supply of 1,000 tokens

• Issuance is split across multiple networks (e.g., Base, BNB Chain, Ethereum)

• A user purchases tokens on one chain

Operationally:

1. Purchased RWA tokens are locked in the custody contract

2. An equivalent amount of wrapped tokens is minted

3. Wrapped tokens are bridged to the designated liquidity chain

4. The user receives tradable wrapped tokens on that chain

At all times, the system maintains a 1:1 reserve relationship between locked RWA tokens and circulating wrapped tokens.

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4. Secondary Market — Trading and Liquidity

Secondary market activity is intentionally consolidated onto a limited set of high-liquidity blockchains to avoid fragmentation.

Trading Venue Characteristics

• Wrapped tokens trade on decentralized exchanges (AMMs)

• Open market price discovery via supply and demand

• Continuous trading availability

• No protocol-imposed exit restrictions

Liquidity Provision

• Third-party liquidity providers may supply pools

• Market depth and pricing are organically determined

• The protocol does not guarantee prices or liquidity

This model mirrors traditional capital markets by separating issuance venues from liquidity venues, optimizing both.

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5. Buyout and Asset Resolution Mechanism

The protocol includes an optimistic buyout framework enabling full asset acquisition while protecting token holder interests.

Buyout Process

• A buyer proposes to acquire 100% of the underlying asset

• The proposal includes:

  • Full valuation price (with premium)

  • Required settlement assets

  • Protocol fee (denominated in $ART)

• Funds are deposited into an escrow settlement contract

Challenge Period

• During a predefined maturity window, any participant may acquire the buyer’s position at the same valuation

• If no challenge succeeds, the buyout finalizes

Settlement

• Wrapped tokens become redeemable for proportional proceeds

• Tokens are burned or retired post-settlement

• Ownership of the physical asset transfers off-chain

This mechanism ensures:

• Transparent price formation

• Fair exit for minority holders

• Clean terminal resolution for the asset

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6. Institutional Design Principles

The LiveArt protocol is built around the following principles:

• Unified supply, multi-channel distribution

• Custody-first architecture

• Liquidity consolidation over fragmentation

• Explicit settlement and unwind paths

• Compatibility with regulated market structures

The result is a system that behaves less like a speculative crypto primitive and more like digitized capital market infrastructure for cultural assets.