# Tokenization Process

**Principle:** no evidence, no settlement. Data is signed at the source, verified by the protocol, minted into a proof token, then converted (when needed) into a market/ compliance asset.

**Chain:** **EDMA L2** handles execution and settlement; **Ethereum (L1)** anchors security and permanence.

Fees: all minting/conversions/transactions require $EDM.

* **Energy & Carbon**: 2% buyer + 2% seller for settlement transactions.
* **Commodity milestones:** 0.5% per tranche (with enterprise caps).
* In all cases, **50% of fees burn** (no EDM, no action).

### A) Energy flow — ETT → CLE / RECs

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### Capture & sign

Smart meters/IoT record generation (kWh), location, timestamp, source; data is cryptographically signed and sent to Edma.
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### Verify

**Oracles+AI** validate readings, de-dup, and cross-check where applicable (e.g., grid/operator feeds). Only valid data proceeds.
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### Mint proof (Edma L2)

Protocol mints **ETT** (non-transferable): **1 ETT = 10 kWh**. The proof is anchored back to Ethereum for auditability.
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### Consolidate to market units

When the account reaches **100 ETT**, the producer receive an additional 0.7 CLE = 0.7 MWh (tradable). ETTs are consumed/linked to prevent double counting.
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### Optionally certify

From ETT evidence, the producer may create RECs / Certificates of Origin as needed for compliance programs.
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### List & Settle

CLE/RECs are listed on the Edma marketplace (on Base). Buyer pays; settlement uses $EDM. Fees: 2% buyer + 2% seller; 50% burn.
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### Finality & record

If used for compliance, instruments are retired on-chain; all lineage (ETT → CLE/REC → buyer) is immutable and audit-ready.
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<img src="https://4141632533-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FvCX7EzuE9nwtTuIaxXGQ%2Fuploads%2F7BLOvc6K2d0BqgT0N0Yf%2Ffile.excalidraw.svg?alt=media&#x26;token=99a516c7-b1dc-458e-a9d7-bd4e0a6d067e" alt="" class="gitbook-drawing">

### B) Carbon flow — direct Carbon Credit NFTs

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### Capture & Sign

Project **MRV feeds** (IoT/satellite/field audits) submit signed evidence with project, methodology, baseline, and vintage.
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### Verify

Edma checks methodology consistency, baselines/leakage, and cross-registry duplication risks. Only verified reductions proceed.
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### Mint Proof  (Edma L2)

Edma mints a **Carbon Credit NFT** per verified ton (unique serial + full metadata). The NFT is anchored to Ethereum for permanence.
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### List & settle

NFTs trade on the marketplace; settlement in **$EDM** with the same fee/burn rules. Buyers can **retire** NFTs on-chain to claim reductions.
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### Finality & Audit

Retirement creates a public, immutable trail from evidence to claim, suitable for auditors and stakeholders.
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<img src="https://4141632533-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FvCX7EzuE9nwtTuIaxXGQ%2Fuploads%2Fadm4GbCV1qL4RDRl0uav%2Ffile.excalidraw.svg?alt=media&#x26;token=25882a4e-2c13-418b-bb4f-f69abf0ec4d1" alt="" class="gitbook-drawing">

### C) Commodity trading rail — EMT & milestone settlement

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### Contract on-chain

Buyer and supplier e-sign a smart contract (specs, Incoterms, milestones, dispute rules). Funds are committed per the deal structure; **$EDM** covers protocol fees.
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### Capture milestone evidence

Port authority logs “on board,” customs/warehouse confirms “cleared/received,” lab issues assay/CIQ. Each event is signed at the source.
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### Verify & mint (Edma L2)

For each verified event, the protocol mints an **EMT** (Event/Milestone Token, non-transferable) tied to that shipment and contract.
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### Release by proof

Upon EMT issuance, the smart contract releases the corresponding payment tranche automatically. No EMT, no release.
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### Completion & record

Final delivery EMT closes the contract; settlement history, proofs, and disbursements are anchored to Ethereum for audit and finance
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<img src="https://4141632533-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FvCX7EzuE9nwtTuIaxXGQ%2Fuploads%2FmxjJHHbmZnm8JeixCeTe%2Ffile.excalidraw.svg?alt=media&#x26;token=a052eba4-dc25-4da2-99f9-e625e8867a02" alt="" class="gitbook-drawing">

### Why this works

* **Evidence-first:** ETT (energy) and EMT (trade) are proof-only; they don’t move, so they can’t be double-sold.
* **Market-ready:** Value flows through CLE, RECs, Carbon Credit NFTs—the tradable layer—with $EDM as the settlement currency.
* **Scalable & credible:** Transactions run on **EDMA L2** for speed/cost; proofs and final states are anchored on Ethereum for security.
* **Deflationary by design:** Every conversion and trade consumes $EDM; half of fees burn, tying network growth to token scarcity.

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<img src="https://4141632533-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FvCX7EzuE9nwtTuIaxXGQ%2Fuploads%2FtC0e3aQra3cA8TwhVYf3%2Ffile.excalidraw.svg?alt=media&#x26;token=b95ef483-c448-469b-b7fb-a192d0b373a5" alt="" class="gitbook-drawing">

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Edma’s tokenization process bridges the gap between energy,  manufacturers, buyers, financial markets, and ESG compliance, creating a **more accessible, efficient, and scalable** real-world asset ecosystem.
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