SUPERIOR NETWORK

For years, the promise of tokenizing real-world assets (RWAs) has been a tantalizing prospect for the financial world. The idea of transforming illiquid assets like real estate, private credit, and intellectual property into transparent, tradable digital tokens is revolutionary. However, the initial assumption—that we could simply build this new financial future on a general-purpose blockchain like Ethereum—is fundamentally flawed.

While Ethereum is a brilliant, decentralized world computer, its architecture is designed for breadth, not the specific, demanding needs of regulated financial assets. For the serious, high-stakes business of RWA tokenization, a purpose-built infrastructure is not just an advantage; it is a necessity. This is where a Layer 0 DePIN (Decentralized Physical Infrastructure Network) like the Conduit Network provides a superior foundation.

Ethereum was designed to be a neutral, permissionless platform for a vast array of applications, from DeFi and NFTs to gaming and social media. This generalist approach, however, creates inherent limitations when applied to the highly regulated and performance-sensitive world of RWAs.

1. Prohibitive and Unpredictable Costs: Ethereum's transaction fees, or "gas," are determined by network congestion. This volatility makes it impossible for a business to build a predictable financial model. Imagine a real estate fund needing to distribute monthly rental income to 10,000 token holders. On Ethereum, the cost of this single operation could swing from a few thousand dollars to tens of thousands of dollars from one month to the next, making it operationally untenable.

2. Throughput Bottlenecks: As a shared global resource, Ethereum's transaction throughput is limited. During periods of high demand, the network can become congested, leading to slow confirmation times. Financial markets require speed and certainty of settlement, and the potential for multi-hour delays is a non-starter for institutional-grade assets.

3. "Bolt-On" Compliance and Identity: Ethereum is, by design, agnostic to the identity of its users. This means that all critical compliance functions—Know Your Customer (KYC), Anti-Money Laundering (AML), and investor accreditation—must be built and enforced at the application layer (Layer 2). This creates a fragmented and complex system where each application must build its own compliance "silo," and there is no guarantee that a token compliant in one application will be recognized as such in another.

The Conduit Network is not a general-purpose blockchain. It is a Layer 0 protocol, a foundational layer of the internet stack, specifically engineered to be the native environment for RWAs. Its architecture addresses the core shortcomings of generalist chains.

1. Predictable, Low-Cost Transactions: As a purpose-built network, Conduit is designed for stable and low transaction fees. This allows businesses to forecast their operational costs with precision, making high-volume operations like dividend distributions or royalty payments economically viable and scalable.

2. High Throughput and Financial-Grade Finality: Conduit is built for the performance demands of modern finance, offering the high throughput and rapid transaction finality required for institutional use cases.

3. Native Compliance and Identity Layer (The Killer Feature): This is the most critical distinction. Conduit integrates identity, KYC/AML, and regulatory compliance at the protocol level. This means that every wallet and every transaction on the network can be inherently compliant. It is not a "bolt-on" feature; it is part of the network's DNA.

• On Ethereum: A fund manager wants to ensure only accredited investors can hold their real estate tokens. They must rely on a custom smart contract at the application layer to manage a whitelist of approved addresses. If an investor wants to use that token as collateral in a different DeFi application, that second application has no native way to verify the investor's accredited status, creating friction and compliance risk.

• On Conduit: The investor's accredited status is part of their on-chain identity at the protocol level. The token itself can be programmed to be held only by wallets with this attribute. This compliance is universal across the entire network. Any application, from a lending protocol to a secondary marketplace, can instantly and programmatically verify that the holder is compliant, creating a seamless and secure ecosystem.

• On Ethereum: A corporation retires a carbon credit. The transaction is recorded, but verifying the identity of the retiring entity and ensuring compliance with specific jurisdictional reporting requires off-chain work and manual audits.

• On Conduit: The retirement transaction is not just recorded; it is intrinsically linked to the verified, on-chain identity of the retiring corporation. This creates a "golden record" for auditors and regulators, dramatically simplifying compliance and increasing the trustworthiness of the entire carbon market.

• On Ethereum: Distributing music royalties to thousands of rights holders would be a costly and complex batch process, with gas fees eating into the creators' earnings.

• On Conduit: Royalties can be streamed in near real-time to the verified, on-chain identities of the rights holders with minimal, predictable transaction costs. This creates a more efficient and transparent system that ensures creators are paid what they are owed, instantly.