Chapter 4. Trust Infrastructure

Trust Infrastructure

Participant funds must be protected until promises are fulfilled, and that protection must be completed by a structure, not centralized trust.

4.1 Escrow-Based Fund Protection

Problems of Existing Crowdfunding

Problem	Result
Full payment immediately upon funding	Impossible to control fund usage
Absence of intermediate verification	Progress opaque
Ambiguous responsibility upon failure	Participant loss inevitable

Trust Design Principles of This Platform

✅ 3 Major Trust Principles:

1️⃣ Funds protected until promise fulfillment — Funding Complete ≠ Immediate Payment. Released only when step-by-step conditions are met.

2️⃣ Verification is a distributed structure — Platform sole judgment ❌ DAO + External Audit + Community Confirmation.

3️⃣ All processes recorded on-chain — Condition setting → Fulfillment status → Fund release. Transparency = Basis of Trust.

Smart Contract Escrow

Escrow: A structure where a third party holds funds between transaction parties and delivers them only when conditions are met.

In this platform:

• ❌ Centralized third party (Bank, Platform)

• ✅ Smart Contract acts as Escrow

Advantages:

Feature	Effect
Auto Execution	Immediate processing upon condition fulfillment
Immutable	Rules cannot be manipulated after deployment
Transparency	All history disclosed on-chain
Decentralization	Specific entity cannot control

4.2 Milestone-Based Verification Structure

Upon funding success, funds are not paid at once. Conditions are set for each project progress stage and released sequentially.

3-Stage Fund Release (Milestone-Based Release)

1

Phase 1: Project Initiation (30%)

Deadline: Within 30 days after funding.

Conditions:

• Production plan DAO approval

• Team composition complete & KYC

• Detailed schedule on-chain disclosure

• Budget execution plan submission

Verification:

• DAO Vote (Approval 60%+)

• Platform Operation Team Tech Review

Failure:

• Automatic full refund to participants

• Issuer Trust Grade Drop

• Re-application ban for 6 months

2

Phase 2: Intermediate Milestone (40%)

Deadline: Roadmap 50% point.

Conditions:

• Proof of filming/production progress

• Intermediate result disclosure

• Budget execution history disclosure

• Subsequent schedule update

Verification:

• External Audit (Check progress)

• DAO Verification Team field check

• Participant Vote (Approval 60%+)

Failure options (Participant Vote):

• Option A: Immediate Refund

• Option B: Deadline Extension (60 days, one time)

• Option C: Transfer to Alternative Team

3

Phase 3: Final Completion (30%)

Deadline: Final closing date.

Conditions:

• Final output distribution complete

• Distribution channel confirmed/contract

• Performance measurement Oracle linkage

• Final report disclosure

Verification:

• Participant Community Final Check

• Platform Oracle Verification

• External Audit Eligibility Check

Failure:

• Remaining amount → Insurance Pool

• Participant compensation token payment

• Issuer permanent restriction

Ratio Setting Logic:

• Phase 1 (30%): Initial initiation funds (Contract, Team, Equipment)

• Phase 2 (40%): Actual production costs (Core activity)

• Phase 3 (30%): Distribution · Marketing (After final confirmation)

4.3 Failure Scenario Response

Fund Processing by Scenario

🔴 Scenario 1: Funding Failure (Target not met)

Soft Cap (50%) not met	Automatic Full Refund
Fee	Platform 2% excluded (or waived depending on policy)
Period	Within 7 days after closing

🟠 Scenario 2: Phase 1 Failure (Initiation not met)

Not met within 30 days	Full (100%) Refund
Fee	Operating cost 2% excluded
Penalty	Trust drop + 6 months ban

🟡 Scenario 3: Phase 2 Failure (Production stopped)Remaining funds 60% → Participant Vote:

• Option A: Immediate Refund (60%)

• Option B: Deadline Extension (1 time, 60 days)

• Option C: Project Transfer (Alternative Team)

🔵 Scenario 4: Phase 3 Complete, Performance not met

Output complete, Target not met	Insurance Pool Partial Compensation
Compensation Ratio	10~30% (Proportional to achievement rate)
Issuer	Trust drop, Re-participation conditions tightened

4.4 SPV · DAO · Platform Role Separation

Trust structure is not completed by technology alone. By clearly distinguishing the roles and responsibilities of each participating entity, participants can clearly understand to what extent their choices are protected and what they must judge for themselves.

3-Party Structure

┌──────────────────────────────────────────────┐ │ ① Platform Operator (K-RWA Platform Corp.) │ │ Role: │ │ • Tech Infrastructure Provision │ │ • Matching Service │ │ • Data Aggregation · Verification │ │ • Platform Fee Collection │ │ Responsibility: │ │ ✅ Tech Stability │ │ ✅ Info Intermediation · Transparency │ │ ✅ User Data Protection │ │ What it does NOT do: │ │ ❌ Investment Solicitation │ │ ❌ Profit Guarantee │ │ ❌ Principal Refund Responsibility │ │ ❌ Project Performance Responsibility │ └──────────────────────────────────────────────┘

┌──────────────────────────────────────────────┐ │ ② DAO (Governance) │ │ Role: │ │ • Project Approval/Rejection Vote │ │ • Escrow Step-by-step Approval │ │ • Dispute Arbitration · Policy Change │ │ • Insurance Pool Usage Approval │ │ Composition: │ │ • Platform Token Holders (Weighted) │ │ • Verified Participants (Reputation) │ │ • Industry Experts (Invited) │ │ Decision Making: │ │ • On-chain Vote (Snapshot) │ │ • Quorum: 10% of total participation │ │ • Pass: Approval 60%+ │ └──────────────────────────────────────────────┘

┌──────────────────────────────────────────────┐ │ ③ SPV (Established per Project) │ │ Role: │ │ • Actual Production Contract Execution │ │ • Escrow Fund Execution │ │ • Liquidity Supply Execution upon Perform. │ │ • Tax Filing · Legal Responsibility │ │ Corporate Form: │ │ • Domestic: LLC / Partnership │ │ • Overseas: Delaware LLC / Singapore entity │ │ Lifecycle: │ │ • Established after Funding Success │ │ • Operated during Project Period │ │ • Liquidated after Performance Settlement │ └──────────────────────────────────────────────┘

Fund Flow Path

Participant Wallet (Token Purchase)

Platform Smart Contract (Escrow Lock-up)

Escrow Contract (Step-by-step Condition Met)

SPV Corporate Account (Actual Execution)

Production Company / Creator (Production Complete) Distribution Channel (YouTube · OTT · Distribution)

Performance Occurs :

SPV → DEX Liquidity Supply (Participant Choice)

Participant Autonomous Value Realization

Core:

• Platform does not directly hold funds

• All funds pass only through On-chain Escrow or SPV

• Platform acts only as information intermediary

4.5 Issuer Verification System

3-Step Issuer Approval Process1

Step 1: Application Submission

Required Documents:

• Business License

• Portfolio (Past works)

• Project Detail Plan

• Budget Statement

• Team KYC

Minimum Qualification:

• Movie: Short film 1+ OR Career 2 years

• Music: Released songs 3+

• YouTuber: Subscribers 1,000+

Step 2: Platform 1st Review

Checks:

• Legal Eligibility

• Feasibility

• Past History Check

• Risk Assessment

Outcomes:

• ✅ Pass → Step 3

• ❌ Reject → Reason Disclosure

• ⏸️ Hold → Additional Materials Required

3

Step 3: DAO Community Vote

Disclosed Info:

• Project Overview

• Issuer Profile

• Budget · Funding Goal

• Past Performance

Voting:

• Voting Period: 7 days

• Participation Qualification: Platform Token Holder

• Pass Criteria: Approval 60%+

Result:

• ✅ Approved → Funding Open

• ❌ Rejected → Re-application after 3 months

Trust Grade System (Trust Score)Score Calculation Factors:

Project Completion Rate	30%	Milestone Fulfillment
Performance Achievement Rate	25%	Actual vs Target
Participant Satisfaction	20%	Community Evaluation
Schedule Compliance Rate	15%	Roadmap Deadline
Transparency	10%	Info Disclosure Quality