CHLOM License Exchange (LEX) — Detailed Purpose & Use Case Specification (Phase 3→4)

Owner: CrownThrive, LLC Date: 2025-08-08 Classification: Internal — Decentralized Licensing Marketplace Specification

1. Purpose & Vision

The CHLOM License Exchange (LEX) exists to fundamentally transform how licenses are issued, traded, enforced, and audited in a decentralized environment. It is designed to serve multiple verticals — from software and media rights to patents and compliance certifications — while embedding CHLOM’s compliance-first architecture.

Strategic Goals:

• Enable secure, transparent, and fully auditable license transactions.
• Support both primary issuance and secondary resale/transfer.
• Provide DAO-governed oversight while maintaining market efficiency.
• Integrate Zero-Knowledge Proof (ZKP) verification to enforce compliance without disclosing sensitive data.
• Ensure interoperability across multiple chains and industries.

2. Primary Use Cases

2.1 License Issuance

Scenario: A software vendor mints a new license NFT with jurisdiction-specific compliance metadata. Technical Flow:

1. Vendor calls the
2. Metadata is validated via off-chain API (gRPC + REST).
3. License NFT is added to the On-Chain License Registry.

2.2 Sublicensing

Scenario: An enterprise with an umbrella license sublicenses rights to subsidiaries. Technical Flow:

1. Parent license NFT spawns a child SFT.
2. DAO policy hooks verify sublicensing eligibility.
3. Registry updates lineage mapping.

2.3 Compliance-Driven Trade

Scenario: A buyer purchases a patent license that requires proof of compliance. Technical Flow:

1. Buyer triggers ZKP compliance check.
2. If verification passes, escrow releases NFT.
3. DAO audit log is updated.

2.4 Dispute Resolution

Scenario: A license is challenged for breach of terms. Technical Flow:

1. Dispute contract is triggered with supporting evidence.
2. DAO arbitration panel votes.
3. Resolution triggers either revocation or reinstatement.

3. Target Industries & Sectors

• Software & SaaS — perpetual and subscription licenses.
• Media & Entertainment — distribution rights, royalty tracking.
• Intellectual Property — patents, trademarks.
• Professional Certifications — compliance badges, KYC/AML licenses.
• DeFi & Web3 — DAO service rights, governance licenses.

4. Key Stakeholders

• License Issuers — Enterprises, content creators, software vendors.
• License Holders — Individuals, organizations, DAOs.
• Regulators — Compliance authorities, auditors.
• CHLOM DAO — Governance body managing marketplace parameters.
• Integrators — Platforms using LEX APIs for their own marketplaces.

5. Sample Smart Contract Stub (Rust for Substrate)

#[pallet::call]
impl<T: Config> Pallet<T> {
    #[pallet::weight(10_000)]
    pub fn mint_license(
        origin: OriginFor<T>,
        metadata: LicenseMetadata,
    ) -> DispatchResult {
        let issuer = ensure_signed(origin)?;
        ensure!(Self::is_compliant(&metadata), Error::<T>::NonCompliantLicense);
        let license_id = Self::generate_license_id();
        LicenseRegistry::<T>::insert(license_id, metadata.clone());
        Self::deposit_event(Event::LicenseMinted(issuer, license_id));
        Ok(())
    }
}

6. Technical Requirements

• On-Chain: Substrate-based license registry, ZKP verifier modules, atomic escrow.
• Off-Chain: API Gateway (REST + gRPC), search index, fraud detection AI.
• Security: mTLS, OAuth2, multi-sig for DAO treasury actions.
• Data Storage: IPFS/Arweave for metadata and audit logs.

Summary: This document defines the functional scope, industry applications, and technical pathways for LEX. It serves as the first in a series of deep technical guides to take LEX from concept to production, ensuring all developers, integrators, and governance members understand the vision and required execution steps.