Architecting RWAs: Architecting RWAs: How We Built a Modular Policy Engine for Tokenized Assets

Source: Dev.to

Introduction

Hello devs, I am Dr. Anya Volkov, CTO at SQHWYD.

In the Web3 space, we talk a lot about Real World Assets (RWA). The market is exploding ($33B+ in 2025), but from an engineering perspective, RWA presents a massive headache: Compliance vs. Composability.

A standard ERC‑20 token is permissionless—anyone can send it to anyone. A tokenized Treasury Bill or a Real Estate share, however, is not permissionless. It requires strict transfer rules:

• Is the receiver KYC verified?
• Is the receiver in a sanctioned jurisdiction?
• Is the asset in a lock‑up period?

Hard‑coding these rules into the token contract creates a monolith that is hard to upgrade. Keeping them off‑chain sacrifices the trustlessness of the blockchain.

At SQHWYD, we solved this with a pattern we call the Dynamic Asset Matrix™ (DAM). Below is the architectural breakdown.

The Wrapper Pattern & Policy Hooks

We don’t embed logic into the asset token itself. The token acts as a “dumb” state container, while a Policy Engine enforces transfer rules via an interceptor (similar to OpenZeppelin’s _beforeTokenTransfer hooks).

Simplified logic flow

1. User A initiates a transfer to User B.
2. The Asset Contract pauses execution and calls the Policy Engine.
3. The Policy Engine queries the Identity Registry (on‑chain DID).
4. If IdentityRegistry.isVerified(UserB) == true and Policy.allows(CountryB) == true, it returns TRUE.
5. The Asset Contract executes the state change (transfer).

Pseudo‑Code Implementation

// The Policy Interface
interface IPolicyEngine {
    function checkTransferAllowed(
        address from,
        address to,
        uint256 amount
    ) external view returns (bool);
}

// The Asset Token (SQHWYD RWA Standard)
contract RealWorldAsset is ERC20 {
    IPolicyEngine public policyEngine;

    function _beforeTokenTransfer(
        address from,
        address to,
        uint256 amount
    ) internal override {
        require(
            policyEngine.checkTransferAllowed(from, to, amount),
            "DAM: Policy Violation"
        );
        super._beforeTokenTransfer(from, to, amount);
    }
}

Why Modular Design Matters?

• Upgradability – Regulations evolve. If Brazil updates its securities laws, we simply deploy a new PolicyEngine contract and point the asset token to it, without migrating token state.
• Interoperability – Different assets can share the same Identity Registry. A user KYC‑verifies once and can trade Real Estate, Carbon Credits, and Gold on our platform.

The Challenge of Cross‑Chain Identity

The next frontier is syncing identity state across chains (e.g., Ethereum ↔ Solana). We are using our Unity Layer™ (powered by MPC) as a trusted oracle for identity propagation, ensuring that a user verified on Chain A is recognized on Chain B instantly.

If you are interested in the deeper system design of our Dynamic Asset Matrix, check out our technical documentation.

Happy coding.

Dr. Anya Volkov – Chief Technology Officer at SQHWYD
www.sqhwyd.net