Architecture & Infrastructure

Spout is designed as a modular, end-to-end infrastructure stack for tokenizing and managing real-world financial assets on-chain—starting with AAA-rated corporate bond ETFs. Each layer of the stack serves a specific function to ensure compliance, transparency, and composability while preserving privacy.

1. Custody & Execution Layer

   Spout partners with regulated broker-dealers (e.g. Alpaca, Clear Street) to purchase and custody traditional financial assets like bond ETFs. These assets are held in segregated accounts, with regular reporting and audit trails that support proof-of-reserve logic and investor verification.

2. Tokenization Layer

   Each token issued by Spout is backed 1:1 by its underlying asset, with value tracked via daily NAV feeds. Tokens are minted on the Pharos blockchain—a performant, MoveVM-based chain purpose-built for programmable finance—with support for composability and cross-chain interoperability.

3. Privacy Layer

   Spout uses fully homomorphic encryption (FHE) to power confidential balances and transfers. This allows institutions and treasuries to maintain financial privacy without compromising regulatory auditability or on-chain programmability. It also enables use cases like confidential vault strategies and stealth collateral flows.

4. Oracle & Reporting Layer

   Daily asset prices and portfolio balances are synced via trusted oracles to reflect current NAV and enable minting, redemptions, and integrations with third-party protocols. Spout will publish transparent reporting—including proof-of-reserve attestations and custodial statements—to ensure user trust.