Blockchain and Token Standards Glossary
Atomic Settlement: Simultaneous exchange of tokenized asset and payment, eliminating settlement risk. A SAMA SAR CBDC could enable atomic settlement of Saudi tokenized real estate transactions — paying digital SAR and receiving property tokens in a single, indivisible transaction.
Custodian (Digital Asset): An entity holding private keys and digital assets on behalf of investors. CMA regulations require authorized custody arrangements for tokenized securities — investors do not manage their own private keys.
ERC-20: The basic Ethereum token standard for fungible tokens. Simple and widely supported but lacks built-in compliance features required for regulated securities.
ERC-3643: The institutional security token standard (formerly T-REX), designed specifically for regulated transferable securities. Includes built-in identity verification, compliance rules (transfer restrictions based on investor eligibility), and recovery mechanisms. The recommended standard for Saudi tokenized real estate due to its regulatory compliance features.
ERC-1400: A security token standard supporting partitioned tokens, enabling different classes of ownership (preferred, common) within a single contract. Relevant for tokenized real estate structures with different investor tiers or rights.
Gas Fees: Transaction processing costs on public blockchains (primarily Ethereum). Gas fees are paid by the transaction initiator and vary with network congestion. Permissioned chains (likely used for Saudi regulated tokens) can eliminate or fix gas fees.
Immutable Ledger: The blockchain’s core property — once recorded, transactions cannot be altered or deleted. For tokenized real estate, this creates a permanent, auditable record of all ownership transfers, rental distributions, and NAV calculations.
Layer 2 (L2): Blockchain scaling solutions (Polygon, Arbitrum, Optimism) that process transactions off the main Ethereum chain at lower cost and higher speed. Some tokenization platforms use L2 chains to reduce gas fees while maintaining Ethereum security.
Multi-Signature Wallet (Multi-Sig): A cryptocurrency wallet requiring multiple private key signatures to authorize transactions. Used in tokenized real estate for SPV treasury management — ensuring that no single individual can unilaterally access investor funds.
Net Asset Value (NAV): The per-token value calculated as: (total property value + accrued income - liabilities - fees) / total tokens outstanding. NAV is the fundamental valuation metric for tokenized real estate positions.
Oracle: A data feed connecting external information (property valuations, rental payments, construction milestones) to smart contracts. Oracles enable automated token actions based on real-world events — for example, distributing rental income when Ejar confirms tenant payment.
Permissioned Blockchain: A blockchain where access is restricted to authorized participants. Saudi tokenized real estate platforms are likely to use permissioned chains to satisfy CMA and SAMA regulatory requirements for controlled access and transaction monitoring.
Smart Contract: Self-executing code deployed on a blockchain that automatically performs predefined actions when conditions are met. In tokenized real estate: distributing rental income proportionally to token holders, enforcing transfer restrictions, and updating NAV calculations.
Token Burn: Permanent removal of tokens from circulation, typically executed when the underlying property is sold and proceeds are distributed. The smart contract “burns” the tokens, removing them from the blockchain.
Whitelist: A list of wallet addresses authorized to hold a particular security token. Required for regulated tokenized securities to ensure only KYC-verified, eligible investors can receive or trade tokens. CMA regulations require whitelist enforcement at the smart contract level — only addresses verified through NAFATH digital identity and CMA investor suitability checks can receive tokens.
Bridge (Cross-Chain): Infrastructure enabling token transfers between different blockchains. For Saudi tokenized real estate operating on permissioned chains, bridges could enable interoperability with public chains for wider distribution — though CMA regulatory requirements for controlled access may limit cross-chain functionality.
Decentralized Autonomous Organization (DAO): A blockchain-based governance structure where token holders vote on organizational decisions. While DAOs are common in DeFi, CMA-regulated tokenized real estate is unlikely to adopt full DAO governance due to requirements for identified management and regulatory accountability. Limited DAO-like features (token holder voting on property improvements or manager selection) may be permitted under specific CMA conditions.
Distributed Ledger Technology (DLT): The broader technology category encompassing blockchains and other shared, replicated, and synchronized digital data records. SAMA and CMA regulatory documents reference DLT rather than blockchain specifically, maintaining technology neutrality in their frameworks.
Hardware Security Module (HSM): A physical computing device that safeguards and manages digital keys for strong authentication. Institutional custodians of tokenized securities use HSMs to protect the private keys controlling investor tokens — providing military-grade security for digital asset custody.
Interplanetary File System (IPFS): A decentralized file storage protocol used to store tokenized real estate documents (property deeds, appraisals, Shariah compliance certificates) in a tamper-proof, permanently accessible format. Documents are referenced by content hash rather than server location, ensuring availability even if the tokenization platform experiences downtime.
Know Your Transaction (KYT): Ongoing monitoring of blockchain transactions to detect suspicious patterns. Complementary to KYC (Know Your Customer), KYT is required by Saudi AML/CFT regulations for platforms processing tokenized real estate transactions.
Stablecoin: A cryptocurrency designed to maintain a stable value relative to a reference currency. SAR-pegged stablecoins (if authorized by SAMA) could simplify tokenized real estate transactions by eliminating fiat-to-crypto conversion friction. Currently, SAMA has not authorized any SAR-denominated stablecoin, and tokenized RE platforms process transactions in fiat SAR.
See also: CMA Securities Rules | AML/CFT Compliance | Due Diligence Checklist | GCC Platform Comparison | CMA Terminology | Investment Terminology | SAMA Profile | REGA Wafi Terminology
Updated March 19, 2026