Glossary

Definitions for key terms used in the L3RS-1 specification.

Asset: A cryptographically represented unit of value, claim, right, or entitlement recorded on a distributed ledger system.
Asset Backing Type: The category of external value backing a reserve-backed asset. One of: FIAT, TREASURY, COMMODITY, REAL_ESTATE, EQUITY, DEBT, or MIXED. Declared at issuance and anchored in the Reserve Interface.
Asset_ID (I): A globally unique identifier derived from a deterministic hash of the issuer public key, issuance timestamp, and nonce. Remains invariant across all chains.
Asset State: The current lifecycle status of an asset. One of: ISSUED, ACTIVE, RESTRICTED, FROZEN, SUSPENDED, REDEEMED, BURNED.
Attestation Frequency: The declared frequency at which a reserve-backed asset must provide updated audit attestations. One of: REALTIME, DAILY, WEEKLY, MONTHLY, QUARTERLY, or ANNUAL. Failure to provide updated attestation within the declared frequency triggers a compliance rule.
Compliance Module (C): A deterministic rule engine evaluated prior to any asset state transition. Represented as a total decision function mapping events to ALLOW or BLOCK.
Conformance Class: One of four certification levels (CORE, ENHANCED, SOVEREIGN, CROSSCHAIN), each defining a cumulative set of mandatory implementation requirements.
Cross-Chain Certificate (CID): A hash-anchored proof constructed as H(Asset_ID ∥ StateHash ∥ ComplianceHash ∥ GovernanceHash ∥ Timestamp). Preserves asset state, compliance, and governance configuration across ledger environments.
Fee Module (F): The fee routing structure declared at asset issuance. Defines the base fee rate and allocation vector across up to five recipients (sovereign, validation, storage, operator, bridge). Allocations must sum to exactly 10,000 basis points. Immutable after issuance except via governance amendment.
Finality: The condition under which settlement is considered irreversible under the consensus rules of the underlying ledger.
Governance Override: A formally authorized state modification executed under legally defined or emergency circumstances. Requires valid cryptographic signature and, for restricted actions, a 2/3 quorum of registered governance keys.
Identity Requirement Level (ID): A field on every asset declaring the minimum identity verification required for transfer. Values: 0 (Unbound), 1 (Verified/KYC), 2 (Sovereign-Validated), 3 (Multi-Jurisdiction).
Identity Record (IR): A cryptographically anchored attestation structure containing: Identity Hash, Verification Authority, Jurisdiction scope, Expiry timestamp, Revocation flag, optional Attribute commitments, and optional Proof object.
Insolvency Priority: The claim seniority classification for a reserve-backed asset in the event of custodian insolvency. One of: SENIOR, SECURED, UNSECURED, or SUBORDINATED. Must match the priority defined in the Legal Mirror.
Jurisdiction (J): A legally recognized sovereign or regulatory authority under whose laws an asset is governed. Expressed as an ISO 3166-1 alpha-2 code. Immutable across chains.
Legal Mirror (L): A cryptographic hash reference to the governing legal documentation. Computed as H(document_bytes ∥ jurisdiction ∥ version). Stored on-chain; full document may be stored off-chain.
Legal Mirror Hash (LH): The cryptographic hash of the governing legal document, computed as H(document_bytes ∥ jurisdiction ∥ version). The full document may be stored off-chain. Only the hash is stored in the asset object. Immutable unless amended through the formal governance process.
Nonce: A unique per-sender transaction parameter that prevents replay attacks.
Reserve Interface (B): A backing verification structure required for assets representing claims on external value. Includes custodian identification, backing type, audit hash, attestation frequency, redemption logic, and insolvency priority.
Settlement: The atomic state transition in which compliance validation, identity validation, fee routing, governance checks, and state commit all complete successfully.
State Hash: A deterministic hash of current asset metadata and compliance configuration: H(Asset_ID ∥ balances ∥ compliance_state ∥ governance_state).
Verification Authority (VA): The identity of the entity that issued or validated an identity record. Represented as an identifier resolvable to a public key or certificate chain. Signature under the VA public key must verify for an identity record to be considered VALID.