Skip to main content
Built on mainstream public blockchain infrastructure, ArtStar tokenizes physical artworks under the ERC-20 standard and establishes an on-chain compliance management contract framework. This architecture preserves transaction transparency while delivering institutional-grade asset security and compliance control.

Tokenization Architecture

ERC-20 Tokenization Standard

ArtStar uses the ERC-20 standard as the base protocol for asset tokenization.
ParameterConfiguration ValueDescription
Decimals18High precision to support flexible fractional ownership
SymbolARTS / asset-specific symbolEasy for market recognition and exchange listings
Total SupplyAnchored to physical asset valueFixed in aggregate through the compliance management contract

Tokenization Workflow

Physical asset valuation -> Legal structuring -> Smart contract deployment -> KYC/AML verification -> Token issuance
  1. Asset Preparation: Conduct professional valuation of the physical artwork and design the legal structure, such as an SPV or direct tokenization.
  2. Custody Arrangement: Appoint a qualified custodian to safeguard the physical asset and ensure the asset is securely ring-fenced.
  3. Contract Deployment: Deploy token contracts that comply with ArtStar standards on BNB Chain (BSC).
  4. Identity Verification: Investors complete KYC/AML procedures and their wallet addresses are added to the whitelist.
  5. Token Distribution: After compliance checks pass, tokens are securely distributed to investor wallets.

Compliance Contract Framework

ComplianceManage Contract Architecture

ArtStar has built a complete on-chain compliance contract framework that delivers institutional-grade compliance control through signature-based authorization.

On-Chain Signature Verification

The compliance management contract uses ECDSA signature verification to ensure that only properly authorized actions can be executed:
// Core signature verification logic
function _verifySignature(
        address user,
        bytes memory signature,
        uint8 operation,
        uint256 expireTime
    ) internal virtual returns (bool) {
        if (block.timestamp > expireTime) revert SignatureExpired();

        bytes32 messageHash = keccak256(
            abi.encodePacked(block.chainid, address(this), user, txNonce[user], operation, expireTime)
        );

        bytes32 ethSignedHash = MessageHashUtils.toEthSignedMessageHash(messageHash);

        address recovered = ECDSA.recover(ethSignedHash, signature);

        if (recovered != owner() && subAdmins[recovered].permissionLevel != PERMISSION_SIGNATURE_MANAGER) return false;

        txNonce[user]++;

        return true;
    }

Whitelist Management

FunctionDescriptionPermission Requirement
Address OnboardingAdd investor addresses that passed KYC to the whitelistCompliance administrator
Batch UpdatesSupport batch addition or removal of blacklisted addressesCompliance admin + multisig
Status QueryQuery an address’s compliance status in real timePublic interface
Automated ChecksAutomatically validate both counterparties during transfersInline contract logic

Compliance Parameters

ParameterConfiguration ItemDescription
Investment LimitsMin/Max InvestmentUSD limits for a single investment
Raise LimitsMin/Max RaiseTarget fundraising range for an issuance round
Lock-Up PeriodLock DurationVesting or holding period after token delivery
Transfer RestrictionsTransfer RestrictionsTransfers involving blacklisted addresses are prohibited

Blockchain Infrastructure

BNB Chain Multi-Layer Architecture

ArtStar selects BNB Chain as its primary deployment network and benefits from its mature infrastructure:
ChainRoleKey Characteristics
BSC (BNB Smart Chain)Main networkScalable, low cost, secure, and production-ready
opBNBScaling layerHigher TPS and lower gas, suitable for high-frequency activity

Chain Selection Considerations

ConsiderationBSC AdvantageL2 Option
Gas FeesVery low (about $0.05/tx)Can be reduced by another 10x-100x
Transaction Speed~3-second block timeNear-instant confirmation
EcosystemMature and tooling-richRapidly evolving
Use CasesStandard trading and stakingHigh-frequency trading and small-ticket assets

Security Architecture

Layered Security Controls

┌────────────────────────────────────────────────────────────┐
│                     Security Architecture                  │
├────────────────────────────────────────────────────────────┤
│  Layer 1: Smart Contract Security                         │
│    - Professional security audits by independent firms    │
│    - Formal verification                                  │
│    - Bug bounty program                                   │
│                                                            │
│  Layer 2: Access Control                                  │
│    - Multi-signature wallets for sensitive operations     │
│    - Timelock protection for critical actions             │
│    - Role-based access control                            │
│                                                            │
│  Layer 3: Compliance Verification                         │
│    - KYC/AML identity verification                        │
│    - On-chain signature verification                      │
│    - Whitelist controls                                   │
│                                                            │
│  Layer 4: Asset Custody                                   │
│    - Physical assets: qualified custodians / trustees     │
│    - Digital assets: MPC + HSM cold storage               │
└────────────────────────────────────────────────────────────┘

Smart Contract Audits

ArtStar smart contracts must go through the following security assurance process:
  1. Internal Code Review: Multiple rounds of review performed by the development team.
  2. Third-Party Security Audit: Independent blockchain security firms, such as Trail of Bits, CertiK, or OpenZeppelin, review the contracts.
  3. Formal Verification: Critical logic is mathematically validated where appropriate.
  4. Testnet Validation: Contracts are thoroughly exercised on test networks before mainnet deployment.
  5. Bug Bounty Program: A continuous bug bounty program remains available after launch.

Multisignature Governance

Operation TypeSignature RequirementDescription
Parameter Changes2/3 multisigUpdate limits, lock-up duration, and similar parameters
Whitelist ManagementSingle admin signature + loggingDay-to-day operational action
Asset Migration3/5 multisigHigh-risk action requiring multiple approvals
Contract UpgradeTimelock + multisigIncludes a 48-hour delay window

Asset Custody Framework

Physical Asset Custody

Custody ElementDescription
Custodian QualificationLicensed professional custody institution
Physical SecurityProfessional vaults, fire and water protection, and surveillance
Insurance CoverageAdequate property insurance coverage
Periodic AuditIndependent verification of the physical asset’s existence

Digital Asset Custody

Custody MethodTechnical ImplementationApplicable Scenario
MPC WalletPrivate key sharding through multi-party computationInstitutional asset management
Hardware Security Module (HSM)Dedicated hardware security chipHigh-security storage
Multisig WalletJoint control by multiple partiesLarge-value asset operations

Compliance and Regulatory Framework

International Compliance Standards

ArtStar aligns with the following international compliance standards:
Compliance AreaStandard / RegulationImplementation Approach
KYCFATF RecommendationsIdentity verification + address whitelisting
AMLFinancial Action Task ForceTransaction monitoring + suspicious activity reporting
Securities ComplianceHong Kong SFO / relevant jurisdictionsERC-3643-compatible design
Data ProtectionGDPR / PDPOMinimal on-chain data + encrypted storage

Independent Regulatory Review

The ArtStar community will appoint internationally recognized independent professionals to conduct periodic independent regulatory reviews of physical assets. The review results will be disclosed to the public in a timely manner.
  • Review Frequency: Quarterly or annual independent audits
  • Review Scope: Physical asset existence, integrity, and custody compliance
  • Disclosure: Transparent and public review reports

Evolution of Compliance Token Standards

The ArtStar tokenization architecture is compatible with the following token standard evolution path:
StandardTypeApplicable ScenarioCompliance Capability
ERC-20Fungible tokenCurrent model for fractionalized artBasic compliance through whitelist controls
ERC-3643Permissioned tokenScenarios with higher compliance requirementsNative KYC/AML and investor eligibility controls
ERC-1400Security tokenInstitutional-grade security tokenizationPartitioned transfers and attached legal documentation
Evolution Strategy: ArtStar adopts a modular design that can progressively upgrade token standards in response to regulatory requirements, enabling a smooth transition from ERC-20 to ERC-3643 or ERC-1400.

Technology Stack Overview

Technical ComponentTechnology ChoiceDescription
Smart ContractsSolidity + HardhatMainstream general-purpose contract stack
FrontendVite + React + TypeScriptModern Web3 application development
Web3 Librarywagmi + viemConsistent with ethers.js v6 best practices
Testing FrameworkHardhat + VitestFull-stack testing for contracts and components
Chain IDBSC Mainnet: 56 / Testnet: 97Configured for the BSC network
IdentitySupabase Auth / PrivyWeb3 identity with a familiar Web2-like user experience

References