Settlement & Legal Enforceability

Settlement on a blockchain is not the same as settlement under law. The former is a cryptographic fact; the latter is a legal fact. A properly architected RWA makes those two facts describe the same economic reality — but it does so deliberately, through a mechanism called dual registration.

Dual registration

In a dual-registered RWA, two records exist in parallel:

1. The legal register — an LP Interest Register, shareholder register, or CSD book-entry. Under the governing jurisdiction's law, this register is ownership.
2. The on-chain token — a programmable representation of the legal register position.

The two are synchronised by the issuer's transfer agent. An on-chain transfer triggers an off-chain register update. The register update is the legally operative event. The on-chain event is confirmation of it.

Settlement finality

On Ethereum, finality is probabilistic until ~64 blocks, then strong. On Canton, finality is deterministic within ~5 seconds. On Liquid, federated finality is achieved within ~1 minute. For an RWA, finality matters because the transfer agent needs to know when to update the register — too soon and you risk reorg-driven corrections; too late and the trade is lagging settlement.

Enforceability tests

A prudent investor asks three questions about enforceability:

1. Which jurisdiction's courts have authority? Usually the jurisdiction of the issuer, not of the blockchain.
2. Which document governs? The offering memorandum and LP agreement, not the smart contract.
3. Who is the counterparty? A licensed legal entity — in ALKN's case, Alkemya Metacore SCSp, Luxembourg.

Conflict of law

What happens if the smart contract says one thing and the LP Interest Register says another? In a well-architected RWA, the answer is specified in the offering document: the legal register prevails. The smart contract is an operational convenience, not a source of legal authority.

Default scenarios

• Issuer insolvency: LP holders rank per the LP agreement. Bankruptcy-remote structures protect the underlying assets.
• Custodian insolvency: Assets are held in trust / bailment, not on the custodian's balance sheet. Holder claims are preserved.
• Smart contract failure: The legal register is still authoritative. The token can be re-issued under a corrective event.
• Blockchain failure: The legal register survives. The issuer can migrate to another chain.