Tokenization Mechanisms and Token Issuance (ERC-20 and NFT)

At the core of the platform is the tokenization of physical diamonds—the process of converting each stone into a digital asset on the blockchain. Diamore uses a combination of NFTs and fungible tokens to represent gemstones:

• NFT Certificate: Each individual diamond entering the system receives a unique NFT (Non-Fungible Token) that contains the stone’s metadata — characteristics such as carat weight, color, clarity, cut, the GIA certification number, a unique laser-inscribed code, and more. The NFT serves as a digital certificate of ownership for a specific physical diamond stored with a custodian. It verifies the diamond’s authenticity and its binding to the NFT, although the NFT itself can be “frozen” in custody for security purposes.

• Fractional ERC-20 Tokens: To enable fractional ownership and liquidity, Diamore issues fungible tokens in the ERC-20 standard (or equivalents, depending on the blockchain). These can be referred to as Diamore Diamond Tokens (dTokens). Each dToken represents a share of the overall diamond portfolio (or of a specific diamond pool). Essentially, a dToken functions as a digital share in the Diamore diamond fund — it grants proportional ownership in the portfolio’s value and rights to income distribution. Token issuance occurs when assets are deposited in custody and verified by the NFT certificates. The total number of dTokens issued is directly tied to the appraised NAV of the portfolio at the time of issuance. These fractional tokens can be freely traded among investors, offering liquidity that traditional ownership of physical diamonds lacks.

This hybrid approach combines the authenticity of individual diamonds via NFTs with the ease of trading provided by fungible tokens. At Diamore, each NFT confirms that a real GIA-certified diamond underlies the token, while the ERC-20 dToken allows any investor to own a small portion of the diamond portfolio — effectively holding several "digital carats."

Example of the Tokenization Process: Before tokenization, Diamore selects diamonds from trusted suppliers, conducts GIA certification, and engraves each stone with a unique code. The diamonds are then deposited in a secure vault, and digital assets are issued on the blockchain: each diamond is represented by an NFT linked to its certification, while the portfolio's total value is reflected in the issuance of fractional tokens. This entire chain — from acquisition to storage — is recorded in an immutable blockchain ledger, ensuring full transparency and reliable ownership tracking.