Testing & QA

Wallet Setup & Faucet
Other Asset types
E2E Scenario

Wallet Setup & Faucet

Step 1: Setup your wallet

I use Eternl which you can get here:

Before you create a wallet, switch to the "Pre-prod" network. You do this by clicking this button at the bottom right of the wallet app:

You'll then be shown this popup:

Select "Pre-production Testnet" and then click on "Add Wallet" to begin:

Follow the process carefully, and immediately note down your password, and your secret keys. Once you're done you'll be able to go to the "Receive" tab to copy your wallet address to clipboard for the next step.

Step 2 - Get some funds into your wallet

Before you can test our platform you'll need some test ADA. The faucet below will currently give you 10,000 ADA. Paste your wallet address into the form and you should receive those test funds in less than a minute:

https://docs.cardano.org/cardano-testnets/tools/faucet

Other Asset types

Let's generate an NFT

Step 1: Create NMKR Studio Account

NMKR Studio is an easy-to-use application that enables you to create, manage, and sell NFTs at scale. Native to Cardano, where it has minted millions of NFTs, NMKR now supports minting on multiple chains.

For Pre-production testnet, you can visit this link and create account.

https://studio.preprod.nmkr.io/

Step 2: Create & Mint your test NFT

- Create a new NFT project

note: images have to be .jpg or.png format

The next field fields are all optional but important when launching a commercial project. The project url is the website of the collection; the Description pertains to the NFT, a TokenName prefix is a name that goes before the number of a collection, and finally, the X (Twitter) handle of the project. The NFT reservation time is how long an account can have the asset in reserve before a purchase.

Go to Setup Wallets and input your wallet address

This wallet will be used to mint the NFTs.

CIP-25 is the original standard for Cardano NFTs, providing a fixed, immutable metadata format, CIP-68, on the other hand, is a newer standard that allows metadata to be mutable, meaning it can be updated over time

A new Policy ID creates a unique identifier tied to the provided wallet address, establishing a fresh collection for new NFTs. If a user selects an existing Policy ID, the new NFT will be added to an already-established collection.

Next, the Policyscript lock allows you to set a future date as a minting deadline. After this date, no additional NFTs can be crated under this policy ID, effectively locking the supply permanently and ensuring scarcity of your collection.

Finally, a user can configure the NFT metadata. This information is embedded in the token and visible on Cardano, allowing compatible wallets in the ecosystem to read and display it within the NFT section when users view their NFTs.

- Managing the NFT

You can see this menu appears in the Projects section of NNKR studio. From this menu, a user can access the sale option in NMKR Studio by clicking on "Manage Project" for those interested in putting it up for sale.

The first choice Cardano Collection Token in the dropdown menu allows a user to create a royalty token. This will ensure that a percentage of every NFT resale goes to the wallet specified by the token's creator.

Here to mint token, you should buy MINT COUPONS on dashboard.

The next feature NMKR Studio allows is for the user to create discount conditions. Users can set up a series of discounts based on some criteria met by the buyers

E2E Scenario

Real World Assets (RWA) on Cardano Blockchain with L4VA

This document outlines how L4VA enables the tokenization, aggregation, and fractionalization of commercial real estate assets on the Cardano blockchain, along with the specific transaction types and smart contracts needed for each step of implementation.

The Story

Introduction

A commercial real estate investment firm, RealX Holdings, identified an opportunity to increase liquidity and accessibility in the traditionally illiquid commercial real estate market. They decided to use L4VA to tokenize their portfolio of commercial properties and create fractionalized ownership tokens that could be traded on the blockchain.

Holding Company Tokenization

RealX Holdings had several LLCs, each holding different commercial properties (office buildings, retail spaces, and industrial warehouses). They tokenized these holding companies by issuing share classes representing percentage ownership of each LLC. These share classes were then minted into NFTs on the Cardano blockchain.

Vault Creation

Using L4VA, RealX created specialized vaults for different asset categories:

Office Space Vault: Aggregating tokens from office building LLCs
Retail Space Vault: Aggregating tokens from retail property LLCs
Industrial Space Vault: Aggregating tokens from industrial warehouse LLCs

Each vault was designed to manage the aggregated tokens and enable fractionalized ownership through fungible tokens (FTs).

Investment Round

Investors were able to purchase fractionalized tokens from any of the vaults, gaining exposure to specific commercial real estate sectors without needing to buy entire properties. Each investor could contribute any amount of ADA, making commercial real estate investment accessible to a much wider audience.

Diversified Portfolio Creation

A financial influencer named Charlie saw an opportunity to create a more diversified commercial real estate portfolio. Charlie created a new vault on L4VA that aggregated tokens from all three sector-specific vaults (Office, Retail, and Industrial) into a "Commercial Real Estate Index" vault. This vault issued its own tokens representing exposure to the entire commercial real estate market, reducing risk through diversification.

Governance Decisions

Each vault implemented strictly defined governance systems allowing token holders to vote on a specific set of permitted actions:

Permitted Governance Actions:

Asset Sales: Proposals to list or sell vault assets at market price to generate liquidity or rebalance the portfolio.
Asset Acquisition: Proposals to purchase new assets that match the vault's whitelist using available ADA in the vault.
Asset Staking: Proposals to stake assets to generate additional yield for the vault.
Distribution to Token Holders: Proposals to distribute fungible token assets (including ADA) to fractional token holders through an asset claim and token burn process.
Vault Mergers (v2): Proposals to merge compatible vaults, requiring approval from both vaults' token holders, creating a new vault with combined assets and a whitelist restricted to the sum of the original whitelists.

Prohibited Governance Actions: To prevent potential fraud and maintain vault integrity, certain operations were explicitly prohibited by the smart contract:

Direct External Transfers: The governance system prevented proposals to send ADA or fungible token assets from the vault to specific external addresses.
Whitelist Expansion: Vaults could not expand their asset whitelist beyond their initial scope without a full protocol upgrade.
Non-Market-Based Transactions: All asset sales and purchases required verifiable market price validation.

This strictly defined governance system ensured that vault operations remained secure, transparent, and aligned with token holders' interests while preventing potential abuse.

Revenue Distribution

As the commercial properties generated rental income, this revenue flowed into the respective vaults. The governance system automatically distributed these returns to token holders proportional to their ownership, creating a steady income stream for investors while maintaining complete transparency.

Blockchain Implementation: Transaction Types and Smart Contracts

Transaction Type: Minting Transaction

Creates NFTs representing LLC share classes
Includes metadata about the commercial property details (location, size, income, valuation)

Smart Contract Required: AssetTokenizationContract (Contract Hash: 479f356943df735488e8f6ce7dd7dd9e757b68b9e01175da42031111)

Mints NFTs with property metadata
Links legal documents to the asset (property deed, LLC operating agreement)
Creates verifiable link between LLC shares and digital tokens

Implementation:

# Required functions from lib-assets.ts
createAsset("commercial_property", ["operating_agreement.pdf", "valuation_report.pdf", "title_deed.pdf"])

2. Vault Creation

Transaction Type: Minting Transaction

Creates new tokens representing specialized vaults (Office, Retail, Industrial)
Establishes governance parameters and fee structures

Smart Contract Required: VaultContract (Contract Hash: ac2bb90a5a34ee1a7fe5340b73932132df67afb54d90605be6a8329f)

Creates vault structure with specified parameters
Sets up token acceptance policies (which asset types can be deposited)
Establishes governance rules
Manages fractionalization mechanisms

Implementation:

deno run --env-file -A create_vault.ts

3. Asset Aggregation

Transaction Type: Transfer Transaction

Transfers LLC NFTs into appropriate sector vaults
Records ownership provenance

Smart Contract Required: AssetAggregationContract (utilizing VaultContract)

Validates asset type matches vault criteria
Records contribution details and ownership transfer
Updates vault composition

Implementation:

# Uses getVaultUtxo function from lib.ts
getVaultUtxo(vaultPolicyId, vaultAssetName)

4. Fractionalization

Transaction Type: Minting Transaction

Mints fungible tokens (FTs) representing fractional ownership of the vault
Associates FT supply with vault asset value

Smart Contract Required: FractionalizationContract (part of VaultContract)

Calculates appropriate token supply based on asset values
Enforces proportional ownership rules
Manages token supply updates when assets are added/removed

Implementation:

# Function from lib.ts to calculate token distributions
assetsToValue(vaultAssets)

5. Diversified Portfolio Creation

Transaction Type: Vault Creation + Transfer Transactions

Creates a new vault that accepts tokens from other vaults
Transfers tokens from sector-specific vaults to the diversified vault

Smart Contract Required: MetaVaultContract (extending VaultContract)

Handles vault-of-vaults structure
Manages nested governance rules
Calculates appropriate index token supply based on underlying vault tokens

Implementation:

# Uses multiple functions from lib.ts
generate_assetname_from_txhash_index(metavaultTxHash, outputIndex)

6. Governance Voting

Transaction Type: Voting Transactions

Records votes from token holders
Enforces voting weight based on token ownership
Executes approved actions within strict constraints

Smart Contract Required: GovernanceContract (part of VaultContract)

Validates voter eligibility based on token ownership
Enforces voting timeframes
Requires minimum participation thresholds
Validates that proposals match permitted operations
Rejects prohibited operations (e.g., direct transfers to external addresses)
Executes approved decisions automatically

Implementation:

# Function from lib.ts to track governance proposals
getUtxos(governanceAddress, minimumStake)

7. Asset Distribution

Transaction Type: Distribution Transactions

Creates asset claims for token holders
Requires token burn to claim assets
Distributes assets proportionally to token ownership

Smart Contract Required: DistributionContract (part of VaultContract)

Calculates distributions based on token ownership percentages
Creates secure claim mechanism requiring token burn
Validates distribution timeframes
Executes automatic distributions to token holders
Updates distribution records

Implementation:

# Asset claim and token burn process
createAssetClaim(vaultId, assetId, distributionAmount) + 
burnTokenForClaim(fractionalTokenId, claimId)

8. Vault Merging (v2)

Transaction Type: Complex Transaction

Requires approval from both vault governance systems
Creates new vault with combined assets
Burns original vault tokens
Mints new vault tokens for holders from both original vaults

Smart Contract Required: VaultMergerContract (extending VaultContract)

Handles complex multi-vault governance voting
Creates new vault with properly restricted whitelist
Manages asset transfers from original vaults
Calculates fair token distribution in new vault
Ensures continuity of ownership rights

Implementation:

# Implementation for vault merging
proposeVaultMerger(sourceVaultId, targetVaultId, newParams) +
approveVaultMerger(sourceVaultId, targetVaultId, approvalSignature) +
executeVaultMerger(sourceVaultId, targetVaultId, newVaultId)

9. DeFi Integration

Transaction Type: Collateralization Transactions

Uses vault tokens as collateral for lending platforms
Enables yield farming with vault tokens

Smart Contract Required: DeFiIntegrationContract

Creates compatible interfaces with other DeFi protocols
Manages collateralization ratios and liquidation parameters
Enables automated yield strategies

Implementation:

# Integration with external DeFi protocols
getUtxos(userAddress) + collateralizeAssets(vaultTokens, loanAmount)

L4VA System Architecture Diagram

flowchart TD;
  A[RealX LLC] --> |Mint NFT| B[NFT];
  C[L4VA] --> |Create Vault| V[🔒 Vault];
  B --> V;
  E[Investors] --> |Send Assets| V;
  V --> |Create Vote| F[Governance];
  F --> |Votes| V;


  V@{ shape: rounded}
  E@{ shape: rounded}

Transaction Types and Flow

Step	Transaction Type	Asset Involved	Smart Contract	Purpose
LLC Tokenization	Minting	Commercial Property NFT	AssetTokenizationContract	Create digital representation of LLC shares
Vault Creation	Minting	Vault Token	VaultContract	Create specialized vaults for asset categories
Asset Aggregation	Transfer	Property NFT → Vault	AssetAggregationContract	Move assets into appropriate vaults
Fractionalization	Minting	Fungible Tokens	FractionalizationContract	Create tradable fractional ownership tokens
Meta-Vault Creation	Minting	Meta-Vault Token	MetaVaultContract	Create diversified portfolio vault
Token Transfer	Transfer	Vault FT → Meta-Vault	VaultContract	Move tokens between vaults for diversification
Governance Vote	Voting	Governance Token	GovernanceContract	Record holder votes on proposals
Asset Sale	Market Sale	Vault Asset → ADA	VaultContract	Sell assets at market price
Asset Purchase	Market Purchase	ADA → New Asset	VaultContract	Buy assets from whitelist at market price
Asset Distribution	Claim + Burn	Token Burn → Asset Claim	DistributionContract	Distribute assets to token holders
Vault Merger	Complex	Vault A + Vault B → New Vault	VaultMergerContract	Combine compatible vaults

Implementation Workflow

This implementation demonstrates how L4VA facilitates the fractionalization, aggregation, and governance of commercial real estate assets on the Cardano blockchain. The key value propositions include:

Tokenization: Converting illiquid real estate into tradable digital assets
Fractionalization: Breaking down large investments into affordable units
Aggregation: Combining multiple assets into thematic vaults
Diversification: Creating index-like products across property types
Governance: Enabling democratic management of real estate portfolios within strict security constraints
DeFi Integration: Unlocking new financial use cases for real estate assets

By leveraging L4VA, creators with influence and ideas can aggregate large vaults by attracting existing tokenized asset holders to contribute to vaults with specific configurations that represent an investment theme or strategy. The creators can then apply utility to their tokens as part of their community or other decentralized applications.

To execute this implementation on the Cardano preprod network, we'll use the Blockfrost API (project ID: preprodGLOrJOlqUt1HBVbDhBTEh9oq7GVUBszv) and our custom scripts to interact with the smart contracts.

Testing & QA

Wallet Setup & Faucet

Step 1: Setup your wallet

Step 2 - Get some funds into your wallet

Other Asset types

Let's generate an NFT

Step 1: Create NMKR Studio Account

Step 2: Create & Mint your test NFT

E2E Scenario

Real World Assets (RWA) on Cardano Blockchain with L4VA

The Story

Introduction

Holding Company Tokenization

Vault Creation

Investment Round

Diversified Portfolio Creation

Governance Decisions

Revenue Distribution

Blockchain Implementation: Transaction Types and Smart Contracts

1. LLC Share Tokenization

2. Vault Creation

3. Asset Aggregation

4. Fractionalization

5. Diversified Portfolio Creation

6. Governance Voting

7. Asset Distribution

8. Vault Merging (v2)

9. DeFi Integration

L4VA System Architecture Diagram

Transaction Types and Flow

Implementation Workflow