CHLOM License Exchange (LEX) — Settlement & Payout Engine Specification (Phase 3→4)

Owner: CrownThrive, LLC Date: 2025-08-08 Classification: Internal — Decentralized Settlement, Escrow, and Payout Framework for Licensed Asset Transactions

1. Purpose

This document defines the high-level architecture, security model, and implementation requirements for the LEX Settlement & Payout Engine. It ensures that funds and licenses are transferred only after compliance verification, dispute clearance, and DAO-governed rules are satisfied.

2. Core Functions

  • Escrow Management: Secure custody of buyer funds and license tokens until transaction completion.
  • Payout Orchestration: Automatic disbursement of funds to sellers upon verified completion.
  • Partial Release Handling: Supports partial payouts in milestone-based agreements.
  • Multi-Currency Support: Handles payouts in stablecoins, native tokens, or wrapped assets.
  • Fee Deduction Logic: DAO-configurable marketplace and compliance fees deducted on settlement.

3. Settlement Lifecycle

  1. Trigger: Compliance engine signals that trade conditions are met.
  2. Validation: Confirm ZKP proof validity, AI/ML score thresholds, and no active disputes.
  3. Release: Transfer license token to buyer and payout funds to seller.
  4. Fee Allocation: Marketplace and DAO treasury receive configured percentages.
  5. Event Logging: On-chain settlement event emitted with off-chain IPFS receipt.

4. Data Structures

  • Escrow Record:
{
  "escrow_id": "esc-987",
  "order_id": "ord-789",
  "buyer": "0xabc...",
  "seller": "0xdef...",
  "amount": "500 USDC",
  "currency": "USDC",
  "status": "locked"
}
  • Payout Instruction:
{
  "to": "0xdef...",
  "amount": "485 USDC",
  "fee_breakdown": {
    "market_fee": "10 USDC",
    "dao_fee": "5 USDC"
  }
}

5. Security & Compliance

  • Reentrancy Protection: Settlement functions wrapped with nonReentrant modifiers.
  • Multi-Signature Approval: High-value settlements require DAO multisig sign-off.
  • Immutable Audit Trail: All settlements logged on-chain and backed up via decentralized storage.
  • Sanctions Blocking: Final verification step before payout ensures no sanctioned entity receives funds.

6. AI/ML Integration

  • FraudGuard Final Scan: Runs Isolation Forest anomaly checks before fund release.
  • Dynamic Risk Scoring: Payouts adjusted or held based on updated AegisScore.

7. Developer Notes

  • Languages: Solidity (EVM) primary; Rust (Substrate) optional.
  • External Integrations: Stablecoin contract interfaces, oracle feeds for FX rates.
  • Code Example:
function releaseEscrow(uint256 escrowId, bytes memory proof) public nonReentrant {
    require(validateProof(proof), "Invalid ZK proof");
    require(checkRiskScore(escrowId) >= minThreshold, "Risk too high");
    _transferLicense(escrowId);
    _payoutSeller(escrowId);
    emit EscrowReleased(escrowId);
}

This engine ensures trust-minimized, transparent, and fully compliant settlement and payout processes for the CHLOM License Exchange.

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