Payment Modes

The Digital Transfer Agent (DTA) technical standard is designed for maximum flexibility, supporting three distinct payment and settlement models. This allows Transfer Agents, Fund Administrators, and Distributors to choose the workflow that best suits their operational needs, whether they are bridging traditional finance with onchain technology or operating a fully cross-chain native fund.

The payment model for a fund is defined by the Transfer Agent when they register the Fund Token with DTA Request Management.

Comparing the payment models

1. Offchain settlement

This model is designed for funds that handle payments through traditional, offchain channels (e.g., bank wires, direct peer-to-peer transfers). The DTA contracts act as a secure onchain coordination and token escrow layer, while the actual monetary settlement happens offchain.

Use Case: Ideal for tokenized traditional funds where distributors and transfer agents / fund administrators already have established payment relationships.

Workflow (Subscription):

Offchain settlement flow, where DTA Request Settlement escrows tokens until the Transfer Agent confirms offchain payment.

1. A Distributor submits a request on DTA Request Management.
2. The Transfer Agent processes the request.
3. DTA Request Settlement mints the corresponding fund tokens, subject to token-level compliance checks, and holds them in escrow within the contract. It then emits an event indicating that the onchain leg is complete and that offchain payment confirmation is required.
4. The Transfer Agent and the Fund Distributor settle the payment using their agreed-upon offchain method.
5. Once payment is confirmed, the Transfer Agent confirms completion of the request in their DTA Processing contract.
6. DTA Request Settlement releases the escrowed tokens to the Fund Distributor, completing the transaction.

Workflow (Redemption):

1. After the Transfer Agent processes the redemption request, DTA Request Settlement preemptively burns the fund tokens from the Distributor's address. It then emits an event to signal that the onchain portion is complete.
2. The Transfer Agent settles the payment to the Distributor through their offchain method.
3. Once payment is complete, the Transfer Agent confirms completion of the request. If successful, the request is marked as processed. If the payment fails, DTA Request Settlement mints new tokens back to the Distributor, making them whole again.

2. Local onchain settlement

This is the simplest, fully automated model. It is used when DTA Request Management, the DTA Request Settlement, the Fund Token, and the payment token all reside on the same blockchain.

Use Case: Perfect for digitally native funds operating within a single blockchain ecosystem.

Workflow (Subscription):

Local onchain settlement, where all interactions occur atomically on a single blockchain.

1. A Distributor submits a request.
2. The Transfer Agent processes the request.
3. DTA Request Management makes a direct external call to DTA Request Settlement on the same chain.
4. DTA Request Settlement atomically settles in a single transaction: it pulls the approved payment tokens from the Fund Distributor, mints the Fund Token subject to token-level compliance checks, and delivers the new shares directly to the Fund Distributor’s address. No manual completion step is required.

Workflow (Redemption):

1. After the Transfer Agent processes the request, DTA Request Settlement atomically executes the full settlement: it burns the fund tokens from the Distributor's address and transfers the corresponding payment tokens from its own balance to the Distributor.

3. Cross-chain onchain settlement

This is the most advanced model, leveraging Chainlink CCIP to enable seamless cross-chain fund management. It is used when DTA Request Management is on a different blockchain from DTA Request Settlement and the Fund Token.

Use Case: For global fund platforms that want to accept investments on a major chain like Ethereum Mainnet while managing the fund's assets on a more cost-effective blockchain.

Workflow (Subscription):

Cross-chain settlement, where a request on Chain A is fulfilled by the DTA Request Settlement on Chain B via a CCIP message.

1. A Distributor submits a request on Chain A.
2. The Transfer Agent processes the request on Chain A.
3. DTA Request Management escrows the payment tokens on Chain A.
4. It then constructs and sends a CCIP token-transfer message to the DTA Request Settlement address on Chain B. This message contains all settlement instructions and the payment tokens.
5. The DTA Request Settlement on Chain B receives the CCIP message and payment. It then automatically mints the Fund Token (also on Chain B), delivering the new shares to the distributor. There is no manual completion step required.

Workflow (Redemption):

1. After the Transfer Agent processes the request on Chain A, DTA Request Management sends a CCIP message with the redemption instructions to DTA Request Settlement on Chain B.
2. DTA Request Settlement on Chain B burns the fund tokens from the Distributor's address.
3. It then sends a CCIP token-transfer message back to DTA Request Management on Chain A, including the payment tokens from its own balance.
4. When the message arrives on Chain A, DTA Request Management transfers the received payment tokens to the Distributor's address, completing the redemption.