2. What Is the Core Operating Mechanism of BenPay RWA?

2.1 Core Model: Your Asset Value Is Clearly Visible

• Balance Display (What You See): Your balance is always displayed in a stable asset value unit (such as grams of gold), making it intuitive and easy to understand.
• Underlying Circulation (Handled by the System): What circulates on-chain is an internal token that gradually adjusts over time, which is used to automatically accrue management fees.
• Simple Explanation for Users: This works much like holding an asset certificate with a marked net value. The system automatically handles operational costs in the background, ensuring that the balance you see always reflects the true net asset value after fees.

2.2 Security and Compliance Safeguards

• Legal Ownership Confirmation: Each RWA project is supported by clear legal documentation defining the rights represented by the token. The legal enforceability depends on the relevant jurisdiction.
• Asset Custody: All physical or financial assets backing RWAs are securely held by independent, licensed third-party institutions (such as custodian banks or vault providers), ensuring proper risk isolation.
• Regular Audits: The 1:1 peg between custodial assets and on-chain tokens is regularly verified by reputable third-party auditing firms. Key audit conclusions are publicly available, and audit reports must remain valid within a 30-day period.

2.3 Full Lifecycle: From Issuance to Redemption

• Issuance: After passing compliance review, asset providers can use the “one-click issuance” feature to create the corresponding RWA tokens on-chain.
• Circulation: Tokens can be freely transferred and may later be used in DeFi protocols such as liquidity provision (LP), lending, and staking.
• Redemption: Holders may initiate redemption according to the rules. The smart contract locks the tokens, and once the offline physical asset or cash settlement is completed, the corresponding tokens are automatically burned.