Roadmap Only (Target Q2 2026). Constraint tokens do not exist today. No physical infrastructure, warehouse partners, or custody solutions are operational. This document describes future design intentions.
What Are Constraint Tokens? Constraint tokens are sector-focused tokens backed by physical warehouse receipts for the underlying commodities. Unlike synthetic indices (s-baskets), constraint tokens (x-baskets) represent actual ownership claims on stored commodities.
The core idea: Real-world supply chain constraints—access to critical materials—tokenized on-chain with verifiable physical backing.How They Differ from Synthetics Aspect s-basket (Synthetic) x-basket (Constraint Token) Backing None (price reference) Physical warehouse receipts Pricing Oracle feed NAV from inventory ledger Redemption None AP mint/redeem for physical Access HIP-3 perpetual Spot token (potentially perps) Counterparty Market solvency Physical inventory Use case Speculation, leverage Hedging, delivery, long-term
The AP Model Constraint tokens use an Authorized Participant (AP) model, similar to traditional ETFs:
┌─────────────────┐ ┌─────────────────┐ │ Warehouse │ ◄───── Deposit ──── │ Authorized │ │ Operator │ │ Participant │ │ │ ────► Receipt ────► │ │ │ Stores physical│ │ Institutional │ │ commodities │ │ entity │ └─────────────────┘ └────────┬────────┘ │ ▼ ┌─────────────────┐ │ Scape Protocol │ │ │ │ Mint x-tokens │ │ against receipt│ └────────┬────────┘ │ ▼ ┌─────────────────┐ │ Secondary │ │ Market │ │ │ │ Retail buys │ │ x-tokens │ └─────────────────┘
AP Functions Authorized Participants:
Deposit physical commodities → Receive x-basket tokens (mint)
Return x-basket tokens → Receive physical commodities (redeem)
Arbitrage price vs NAV to keep tokens on-peg
Retail users:
Access x-basket tokens on secondary market
Cannot directly mint or redeem
Cannot take physical delivery
Why AP-Gated? Physical commodity handling requires:
Warehouse relationships
Logistics capabilities
Regulatory compliance
Significant scale
Retail cannot efficiently handle these requirements. APs intermediate between physical markets and tokenized exposure.
Inventory Ledger The core innovation is an on-chain inventory ledger that tracks physical holdings:
What It Records Field Description Commodity Which material (Cu, Al, etc.) Quantity Amount held (in standard units) Location Warehouse/vault identifier Receipt ID Warehouse receipt reference Timestamp When recorded Attestation Auditor verification hash
Ledger Operations // Pseudocode - actual interface TBD interface IInventoryLedger { // AP deposits physical, receives receipt registration function registerDeposit ( address ap , uint256 commodityId , uint256 quantity , bytes32 receiptHash ) external returns ( uint256 depositId ); // AP redeems tokens, withdrawal recorded function registerWithdrawal ( address ap , uint256 depositId , uint256 quantity ) external ; // View total inventory for a commodity function totalInventory ( uint256 commodityId ) external view returns ( uint256 ); // View basket NAV function calculateNAV () external view returns ( uint256 ); }
Transparency The ledger enables:
Public verification of backing
Real-time NAV calculation
Proof of reserves without trusted third party
Audit trail for all deposits/withdrawals
NAV Calculation Token value is based on Net Asset Value (NAV) of the inventory:
N A V ( t ) = ∑ i = 1 n Q i ( t ) ⋅ P i ( t ) S ( t ) NAV(t) = \frac{\sum_{i=1}^{n} Q_i(t) \cdot P_i(t)}{S(t)} N A V ( t ) = S ( t ) ∑ i = 1 n Q i ( t ) ⋅ P i ( t ) Where:
Q i ( t ) Q_i(t) Q i ( t ) i i i t t t P i ( t ) P_i(t) P i ( t ) i i i t t t S ( t ) S(t) S ( t ) t t t n n n
Example For xSEMIS with 100,000 tokens outstanding:
Commodity Quantity Price Value Copper 500 MT $8,500/MT $4,250,000 Aluminum 300 MT $2,300/MT $690,000 Silicon 400 MT $2,500/MT $1,000,000 Tin 50 MT $25,000/MT $1,250,000 Silver 10,000 oz $25/oz $250,000 Total $7,440,000
N A V = $ 7 , 440 , 000 100 , 000 = $ 74.40 per token NAV = \frac{\$7,440,000}{100,000} = \$74.40 \text{ per token} N A V = 100 , 000 $7 , 440 , 000 = $74.40 per token Warehouse & Custody Partners TBD. No warehouse operators or custody providers have been selected. This section describes the intended model.
Warehouse Requirements Physical storage requires:
Secure facilities: For valuable commodity storageCompliance: Regulatory requirements for commodity storageInsurance: Coverage for stored materialsAudit capability: Third-party verificationLocation: Strategically positioned for logistics
Custody Model Options under consideration (TBD):
Model Description Trade-offs Direct warehouse Scape contracts directly with warehouses Simpler, more control Custody partner Third party manages warehouse relationships Expertise, but counterparty Hybrid Core commodities direct, specialty via partners Balanced
Commodity-Specific Considerations Not all commodities are equal:
Commodity Storage Complexity Notes Base metals (Cu, Al, etc.) Standard LME-approved warehouses Precious metals (Ag) Higher security Vault storage required Energy (Crude, Naphtha) Specialized Tank farms, hazmat Nuclear (U₃O₈) Highly regulated Licensed facilities only Rare earths (NdPr) Moderate Specialty storage
Mint & Redeem Process Mint (Physical → Token)
AP Deposits Physical
AP delivers commodities to approved warehouse.
Warehouse Issues Receipt
Warehouse verifies and issues warehouse receipt.
Receipt Registered
AP registers receipt with Scape inventory ledger.
Tokens Minted
Protocol mints x-basket tokens to AP based on deposit value.
AP Distributes
AP sells tokens on secondary market or holds.
Redeem (Token → Physical)
AP Returns Tokens
AP submits x-basket tokens to protocol for redemption.
Tokens Burned
Protocol burns tokens, reducing supply.
Withdrawal Authorized
Inventory ledger authorizes withdrawal.
Physical Released
Warehouse releases commodities to AP.
AP Takes Delivery
AP takes physical delivery or sells in commodity market.
Token Economics Creation/Redemption Fees Action Fee Purpose Mint (TBD — confirm) Cover verification, logistics Redeem (TBD — confirm) Cover withdrawal, logistics
Ongoing Costs Physical backing has ongoing costs:
Cost Description Funding Storage Warehouse fees Built into NAV or separate fee Insurance Coverage premiums Built into NAV or separate fee Audit Third-party verification Protocol expense
These costs may cause x-basket NAV to drift slightly from spot commodity basket value.
Risks Specific to Constraint Tokens Additional risks beyond synthetic indices.
Risk Description Warehouse risk Physical loss, damage, or fraud Custody risk Custodian failure or mismanagement Redemption risk Physical delivery delays or failures Regulatory risk Commodity-specific regulations Liquidity risk Thin secondary market Basis risk Token price deviates from NAV
Full Disclaimer Complete risk disclosures.
