CALIBER Framework: DePIN Tokenization

CALIBER: A Scalable Collateralization Registry System for DeFi (UCC Section 7)

Outside of T-bill products, existing RWA tokenization models struggle with tokenizing physical assets: they are often SPV-based ownership, with weak enforcement, making liquidation and risk management inefficient and often catastrophic for crypto-native participants.

USD.AI introduces CALIBER (Collateralized Asset Ledger: Insurance, Bailment, Evaluation, and Redemption) a new offchain-onchain framework utilizing Uniform Commercial Code (UCC Section 7). It is designed to enable direct asset ownership, enforceable redemption, and integrated insurance for DePIN hardware. As DeFi matures beyond money markets into capital markets, CALIBER ensures structured but uncompromised growth for USD.AI.

Due to the parameters around UCC 7, all representations must be in 1:1 form and therefore in an ERC-721 or equivalent format. ERC-20 representations, while more liquid, have elevated risk levels resulting from poor fractionalization designs, which can trigger securities laws and introduce complexities around asset redemptions.

CALIBER is a generalized framework for any offchain, hard asset(s)

CALIBER was initially designed to enforce on-chain ownership and financial structuring for AI hardware and DePIN assets. However, the framework extends beyond these categories, providing a standardized model for any off-chain asset representation.

By integrating enforceable ownership, embedded insurance, and instant redemption, CALIBER establishes a new benchmark for tokenized real-world assets. We invite protocols across industries, such as real estate, commodities, and hard assets, to adopt CALIBER as the foundation for secure, asset-backed tokenization before its full integration into on-chain structured product protocols.

DeFi’s future is not bringing structured products on-chain. It’s bringing the assets’ representations on-chain and leveraging DeFi’s financial engineering and derivative issuance capabilities. The real opportunity lies in using smart contracts to create programmable, composable, and liquid financial layers that extend beyond traditional structured finance, unlocking new markets and yield dynamics that are impossible in legacy systems. This starts with proper and robust tokenization of real assets, not their already-structured synthetic representations.

Feature	CALIBER (USD.AI)	Traditional RWAs (Private Credit)
Ownership	Direct 1:1 asset ownership (ERC-721 NFT)	SPV-based claims, no direct control (ERC-20s)
Enforcement	Instant repossession & resale (UCC Section 7)	Slow legal processes, debt restructuring
Liquidity	Moderate liquidity = AI hardware is resalable in default event	Real estate, private credit = slow liquidation, unknown value in default
Insurance	Scalable, with full warehouse coverage (via the tokenizing agent entity)	Fragmented, hard to insure SPV assets, deal-by-deal insurance structure/onboarding, unscalable
High compatibility	Borrowers use hardware as collateral without disrupting operations	RWA tokenization often locks the asset away in trusts or SPVs, limiting biz use
Default Process	On-chain auctions, 14-day redemption window	Court orders, bankruptcy/lengthy legal action, significant moral hazard costs

Key Parties

Borrower: Owns GPUs

Tokenizing Agent: Legal entity that tokenizes GPUs to enable onchain loan execution. Currently, Permian Labs is the only approved Tokenizing Agent for MetaStreet GPU loans.

Lender: The capital provider lending funds to Borrower, sUSDai holder.

Flow of Funds

Tokenization & Bailment

Similar to a “sale-leaseback”, in order to finance Borrower GPUs they must first be “sold” to the Tokenizing Agent, who then immediately passes back legal ownership to the Borrower via an “Electronic Document of Title”, pursuant to Article 7 of the Uniform Commercial Code (represented with an ERC-721 NFT). This establishes digital property rights, enabling the Borrower to post collateral digitally in order to borrow funds against their GPUs.

Simultaneously, the Borrower and the Tokenizing Agent execute a Bailment Agreement, naming Borrower as Bailee and the holder of the Electronic Document of Title the Bailor. This enables the Borrower to maintain all normal business operations (signing colocation agreements with datacenters, rental agreements with compute customers, etc) without any disruption.

Loan Execution

Once the GPU has been tokenized, the Borrower is free to borrow directly from the MetaStreet Protocol, using their Electronic Document of Title NFT as collateral. To execute the transaction, the Borrower posts their NFT collateral into the pool, withdrawing their loan in USDT. Then, the Borrower makes payments every 30 days to keep their loan current, according to the terms above (15% APR, 3-5 year principal amortization).

In the Event of Default

If Borrower fails to meet their loan payment requirements, (ie, interest & principal payment every 30 days), the Borrower would trigger an event of default. This will cause the NFT, which retains all rights to the underlying GPU, to be sold via auction. The new buyer of the GPU can then, with 14 days notice, sever the Bailment Agreement between the Tokenizing Agent and Borrower, and reclaim the underlying asset for their own purposes.