How it works
From a published series to a distribution, in five steps.
1. A series is published
The issuer creates a token for the series. Its terms are stored on the token itself, where anyone can read them: the structure (akad), maturity, currency, expected profit rate, unit size, the jurisdictions it is not offered in, the holding cap, and the share of tangible assets with its as-of date.
2. An investor is approved
Every sukuk account starts frozen. An investor verifies their identity, the operator's API reads the result and the document's country, and only then does the compliance authority register the investor onchain and open their account. The issuer's key cannot do this: minting and approval are separate keys.
3. The investor subscribes
Payment and delivery are two instructions in one transaction, signed by the investor and the issuer. Either both happen or neither does. A subscription cannot half-settle.
4. Units move between approved investors
A holder can send units to another wallet. On every transfer, Token-2022 calls Tsamara's compliance program, which refuses the transfer unless the recipient is a registered investor, in a jurisdiction the series is offered in, and still within the holding cap afterwards.
5. The distribution is paid
The issuer pays the periodic distribution in stablecoins, pro rata to holdings. Each batch of payments is marked onchain with the series and the period, so paying the same period again skips what is already paid.
The rule and what enforces it
| Rule | Mechanism |
|---|---|
| The terms are public | Token metadata stored on the mint |
| Only approved investors can hold units | Accounts are frozen by default; the compliance authority opens them |
| The issuer cannot decide who holds | Mint authority and freeze authority are separate keys |
| A recipient must be a registered investor in an allowed jurisdiction | The transfer hook checks the recipient's investor record |
| No investor can receive more than the holding cap | The transfer hook checks the recipient's balance after the transfer |
| A subscription cannot half-settle | Payment and delivery are in one transaction |
| Distributions are pro rata and not paid twice | Integer math from indexed holdings; period-marked batches |
The hook does not run when units are minted, so on a primary subscription the holding cap is checked by the operator's API rather than by the program. That gap is tracked as issue 21.