1. EqMesh is composed of two distinct layers

1.1 Off-Chain Layer (EqMesh Infrastructure)

Responsible for:
• Broker connectivity
• account verification
• syncronisation
• execution
• status monitoring
• Strategy assignment and profit allocation
• Secure server-side crediting through authenticated admin keys
• Notification, reporting

1.2 On-Chain Layer (EQMT Smart Contract)

Responsible for:
• Token issuance (representing strategies)
• Balance accounting (profits only — no losses possible)
• Immutable audit trail via chain events
• Permissioned liquidation to client wallets
• maintaining a Zero custodial risk

2. Design Philosophy

The system is built around four guiding principles:
• Non-Custodial
  No user funds are ever held by EqMesh, only profits credited on-chain.
• Loss-Free for Clients
  Strategies may experience draws or losses, but no negative value is ever pushed on-chain.
  Users can never owe money.
  Profits are safe, even in the event of bankrupcy or failure of brokers, banks, traders, or even EqMesh itself.
  Funds can even be accessed by the Token owner without accessing EqMesh website or any other related services.
• Tamper-Proof Profit Distribution
  All credits and liquidations are executed through immutable blockchain events.
• Privacy-Preserving Architecture
  Brokers hold the user’s confidential financial and identity data.
  EqMesh stores only the email, 2FA status, and blockchain mapping.

3. EQMT Smart Contract Architecture

3.1 Token Model

3.2 Strategy Structure

struct Strategy {
    uint16 fcid;        // internal reference
    string sanity;      // metadata
    string uuid;        // off-chain ID
    uint256 equity;     // accumulated on-chain profit
    bool active;
    address owner;
    uint256 tokenId;
}

3.3 Multi Contract chain

Ongoing development is not halted once deployed, future updates resulting in new Contracts being created and Tokens being moved seamlessly without client interaction. Clients can then Recycle (4.2) old tokens ensuring funds are never lost. additionally a contract chain is maintained in the deployed source code, making tampering impossible and preserves the chain spanning multiple contracts.

3.4 Verification

On-Chain contracts are always verified via third party services, publicly available on Github and the EqMesh website.

4. Contract Operations

4.1 Liquidation (Client Only)

4.2 Recycle (Client Only)

4.2 Crediting

When strategy profit > 0 and the strategy parameters are met, the backend calculates profit share and sends the share directly to the token via creditEQMT(). Event is logged for transparency. This also ensures that clients never receive negative credits — losses are absorbed completely off-chain.

4.3 Minting

Creates a new EQMT token representing the strategy. This action is triggered after the client provides collateral (USD/ETH off-chain). Collateral is not tokenized and does not appear on-chain.

4.4 Closure/Burn

disable or destroy Tokens, accumulated funds stay the property of the client, only new credits are no longer being received. This functionality ensures a clean exit without putting funds at risk.

4.5 Reassignement

allows to emergency assign Tokens, as a security layer to prevent fund losses on orphan wallets.
this functionality however requires off-chain interaction to authorize and proof of stake and ownership.

4.6 Event Logging

A unified event model logs: Mint, Credit, Liquidation, Reassignments, Closure, Burn
All events include: UUID, TokenId, Action, Amounts, involved Addresses and Metadata.
This allows EqMesh and anyone outside to reconstruct and/or audit complete historical timeline and the whereabouts of funds.

5. Off-Chain Backend Architecture

• Broker Account Integration
• Brokers verify account ownership via email/API
• EqMesh only receives:
  reference ID (fcid)
  account status
  optional read-only statistics
• EqMesh never stores:
  Passwords
  KYC documents
  This separation increases regulatory compatibility and reduces liability.

5.1 Strategy Tracking and Profit Calculation

Off-chanin tracking includes
• affiliated trade results in real-time
• Profit share models (splits) to be applied
• possible changes in agreements
• positive profit deltas to be forwarded on-chain
• Losses to not reduce token value

5.1 Security Enhancements

• Optional EqMesh 2FA (for dashboard access)
  this is so clients can create a artificial split of credentials.
• Email-only identity footprint
• No sensitive data in EqMesh systems
• No custodial wallet or fund pooling

5.2. Smart Contract Security

• Non-transferable NFTs prevent unauthorized resale
• protected Admin-only functions
• Full transparency through immutable events
• Liquidation allowed only by token owner
• No reentrancy or unsafe call patterns

5.3 Backend Security

• No client funds handled
• No password or secret storage
• Broker authentication handled externally
• Client keeps 100% control of on-chain assets
• No downside risk — token never decreases in value
• Withdrawals only require wallet signature

Advantages of the EqMesh Model participants

Clients
• Full transparency
• No losses, only profits
• Immediate withdrawal capability
• Non-custodial
• Enhanced privacy

Traders
• Clear Equity rules
• all variables are predefined
• no fees
• broker provides access and liquidity
• profit splits instantly avaiable.

Brokers
• No integration risk
• No data sharing
• Simple verification process

EqMesh
• Zero exposure to client funds
• Reduced regulatory footprint
• Clean separation of responsibilities
• Scalable infrastructure
• Clear audit logs on-chain

Conclusion