3.2 Custodial Vault Integration

For Tier I assets, custodial verification and vaulting are mandatory. Parax maintains partnerships with insured and audited vault operators across key jurisdictions to ensure physical custody security. Upon transfer to the vault, assets undergo a rigorous chain-of-custody intake process. This process includes multi-angle imaging with tamper-evident timestamping, serial number verification against manufacturer or official registries, and physical inspection conducted by licensed appraisers under continuous camera supervision.

Upon completion, the vault issues a digitally signed custody certificate. This certificate is submitted via Parax oracles and cryptographically hashed into the on-chain metadata of the corresponding NFT. The physical asset remains in secure custody throughout the tokenization period unless explicitly redeemed by the owner.

Data regarding custody location and vault provider is encoded within the asset registry and accessible via Parax’s APIs and smart contracts, enabling transparent tracking and auditability.

For assets that cannot be physically vaulted, such as real estate, Parax employs a legal custodianship model wherein licensed escrow agents or title-holding entities assume custody of the asset’s deed or ownership rights. These custodians perform title verification, lien assessments, and jurisdiction-compliant legal attestations. These attestations are likewise anchored on-chain to ensure traceability and enforceability.