Glossary

Key terms used throughout the Fabrica documentation.

B

Beneficial Owner

The person or entity that holds the property token and is entitled to all rights of ownership. Distinguished from the recorded owner (the holding entity), the beneficial owner has full control over the property as defined in the Operating Agreement.

Burn

The smart contract method (burn()) that destroys a property token, typically as part of the redemption process when off-ramping a property.

C

Chain of Title

The historical sequence of ownership transfers for a property, documented through recorded deeds. Validators verify chain of title during the on-ramp process to ensure clear ownership.

Confidence Score

A composite numeric score representing the level of validation for a property token. The score uses a positional digit system where each digit represents a different validation category. Reading from most to least significant: pastTitleAndLoad (thousands), operatingAgreementLevel (hundreds), onChainHistory (tens), basicValidation (ones). For example, a score of 2401 means pastTitleAndLoad=2, operatingAgreementLevel=4, onChainHistory=0, basicValidation=1. See Validation Process for details.

Configuration Object

Mutable data linked to a property token that can be updated by the owner(s). Stored on IPFS and referenced by the token. Contains proof of title, user descriptions, media, and other updatable property information. Not to be confused with Dynamic Traits, which are a subset of crucial data stored onchain via ERC-7496. See Configuration Object.

Crockford Base32

An encoding scheme used in Fabrica trust names to convert token IDs into compact, unambiguous strings. Excludes potentially confusing characters (I, L, O, U) and avoids accidental profanity.

D

Definition Object

Immutable data stored at token issuance that describes the property, including the property address, legal description, and links to legal documents.

Dynamic Traits

A subset of crucial token traits stored directly onchain via ERC-7496. Reserved for data needed for secure onchain operations, such as validator address and operating agreement reference. Distinct from the Configuration Object, which contains broader property metadata stored on IPFS.

E

Encumbrance

A claim or liability attached to a property, such as a lien, easement, or mortgage. Properties with encumbrances can be on-ramped but will have reduced confidence scores, and some functionalities (such as lending or marketplace sales) may be restricted.

EOA (Externally Owned Account)

A standard blockchain wallet controlled by a private key. When a property token is held by an EOA, the wallet owner is the beneficial owner of the property.

F

Fabrica Trust

A nominee trust structure used as the default legal wrapper for tokenized properties. The trust holds legal title while the token holder maintains beneficial ownership. See Fabrica Trust.

Functional Contract

A smart contract that temporarily holds a token without conferring beneficial ownership, such as escrow contracts or lending protocol vaults.

H

Holding Contract

A smart contract designed to hold property tokens where the controlling entity becomes the beneficial owner (e.g., a DAO or multisig).

Holding Entity

The legal entity (typically a trust or LLC) that holds recorded title to a tokenized property. The holding entity is the nominal owner in the local jurisdiction's property records, while the token holder maintains beneficial ownership.

I

Issue

The process of creating a new property token to represent a property. Issuance occurs after title review, identity verification, and recording at the local jurisdiction are complete. Technically implemented via the mint() smart contract method.

L

Legal Wrapper

The legal structure that connects onchain token ownership to real-world property rights. The primary wrapper type is the Fabrica Trust.

Lien

A legal claim against a property, typically for unpaid debts. Common types include tax liens, mortgage liens, and mechanic's liens. Liens affect confidence scores and may restrict token utility.

M

Mint

The smart contract method (mint()) that creates a new property token onchain, as part of the issuance process.

N

Nominee Trust

A trust structure where the trustee holds title on behalf of the beneficiary with minimal independent duties. The Fabrica Trust is a custom trust that resembles a nominee trust, specifically designed to connect offchain title to onchain token ownership.

O

Off-Ramp

The process of converting onchain property ownership back to traditional real estate ownership. Involves redeeming the token (via the burn() smart contract method) and transferring title out of the holding entity. Also called redemption.

On-Ramp

The process of converting traditional property ownership into an onchain NFT. Includes title review, identity verification, legal wrapper creation, and token issuance. Also called issuance.

Operating Agreement

The legal document that defines the rights and obligations of the property token holder. Stored as a reference in the token's definition object.

Operator

The entity that issues a property token. Anyone can permissionlessly issue tokens, though validators are the typical operators. The operator address is part of the token ID generation formula.

P

Property Token

An ERC-1155 NFT representing beneficial ownership of real property. Contains definition and configuration data, and is connected to physical property through a legal wrapper.

R

Redeem

The process of converting a property token back to traditional ownership. Redemption destroys the token (via the burn() smart contract method) and triggers transfer of title from the holding entity to the owner. Used interchangeably with "off-ramp."

Recorded Owner

The entity shown as owner in the local jurisdiction's property records. For tokenized properties, this is typically the holding entity (trust or LLC), not the beneficial owner.

T

Title Review

The validation process where a validator examines property records to verify ownership, chain of title, and encumbrances before on-ramping.

Token ID

A unique identifier for each property token, generated deterministically from a hash of chain ID, contract address, operator address, session ID, and operating agreement URI.

U

UUPS (Universal Upgradeable Proxy Standard)

The smart contract pattern used by Fabrica contracts that allows protocol upgrades while maintaining existing token data and addresses.

V

Validation

The ongoing process of verifying that onchain property claims match real-world records. Validators perform both initial verification and continuous monitoring.

Validator

An entity authorized to verify property ownership, issue tokens, and maintain confidence scores. Validators perform title review, identity verification, and ongoing monitoring. See Validators.