The recurring daily lifecycle — NAV publication, yield accrual, holder re-screening, record update. The between-state where compliance fires every epoch.
"The fund administrator publishes today's NAV — the on-chain equivalent of the daily pricing feed from a fund accountant."
The NAV oracle pushes the updated net asset value to the settlement contract. For Hashnote USYC this is fully code-enforced — the Chainlink price feed triggers an automatic rebase. For BlackRock BUIDL and Franklin FOBXX the NAV update is policy-enforced: an authorized administrator submits the value after off-chain calculation and the contract accepts it on signature authority alone. This is the Monitor checkpoint (circle) — it observes and publishes but does not gate. If the oracle fails to publish within the expected window downstream steps stall but no assets are at risk. D9 (NAV integrity, SEC Rule 2a-5 fair valuation) and D16 (on-chain settlement, ERC-4626 convertToAssets) are the active domains.
"The fund distributes today's yield — the on-chain equivalent of the daily dividend credit to your brokerage account."
Once the NAV oracle has published, the yield accrual mechanism executes. For rebase tokens (USYC) the contract adjusts every holder's balance proportionally — no transaction required from the holder. For value-accruing tokens (BUIDL) the share price increases while balances stay constant. For FOBXX the BENJI token uses a transfer-agent model where fractional shares are adjusted off-chain and reflected in the token's unit count. Spans L3 Execution (the rebase/accrual contract) and L2 Consensus (the state transition that makes the new balances canonical). Fully code-enforced: the rebase function is permissionless and triggered by anyone after the oracle updates. D16 (programmable settlement via ERC-4626 vault math) is the operative domain.
"The compliance team runs the daily sanctions and accreditation check — the on-chain equivalent of the overnight batch that verifies every account holder is still eligible."
Compliance monitors re-verify every holder against updated OFAC SDN lists, accredited investor status, and jurisdiction restrictions. For code-enforced funds (BUIDL via Securitize, USYC via Hashnote) the ERC-3643 identity registry is the source of truth — if a holder's identity claim expires or they appear on a sanctions list the transfer restriction contract blocks all outbound transfers automatically. For policy-enforced funds (FOBXX) this check runs off-chain through Franklin Templeton's transfer agent. This is a Gate checkpoint (octagon): unlike the Step 1 Monitor, a Gate can freeze a position. If a holder fails re-screening the gate closes — no redemptions, no transfers, no yield claims until the compliance issue resolves. D1 (accredited-investor identity, SEC Rule 506(c)), D2 (sanctions screening, 31 CFR Part 501 and GENIUS Act §4(a)(2)), and D8 (licensing of transfer agent) all fire.
"The back office reconciles the books — the on-chain equivalent of the daily recordkeeping update that syncs your custodian's ledger with the transfer agent's golden record."
The updated position — post-yield, post-re-screening — is recorded in the fund's books of record. For tokenized funds the on-chain state is (or should be) the golden record. In practice, the transfer agent, the fund administrator, the custodian, and the distribution platform each maintain their own ledger; this step reconciles them. This is the Obligation checkpoint (diamond): it doesn't gate or monitor, it creates a regulatory filing obligation. The daily position record feeds 1099 reporting, tax lot tracking, wash sale calculations, and regulatory filings (Form N-PORT for money market funds, filed monthly). Where the TradFi lifecycle treats reconciliation as a pain point, tokenized funds have a structural advantage: the on-chain state is a shared, immutable audit trail. D11 (recordkeeping — SEC Rule 17a-4, Investment Company Act §31) and D12 (regulatory filing — Form N-PORT, IRS §6045 for 1099-INT/DIV and tax lot tracking) fire.
Resolved 4 steps across 1 chain(s). 0 threshold(s) triggered. Frameworks: Common Reporting Standard / FATCA.
Coverage notes: 5 disclosed gap(s).