Decentralized Asset Management Framework Using Hierarchical NFTs = 계층적 NFT를 활용한 분산형 자산 관리 프레임워크

다국어 초록 (Multilingual Abstract)

Non-Fungible Tokens (NFTs) have transformed digital ownership by enabling unique asset representation on blockchain networks. However, widely adopted standards such as ERC-721 and ERC-1155 operate under flat ownership models, limiting their ability to represent complex, compositional, and dynamically evolving real-world assets. While ERC-6150 introduced hierarchical parent-child relationships, it supports only static structures and lacks mechanisms for dynamic operations like splitting, merging, and fractional ownership redistribution. These limitations restrict NFT applicability in domains like real estate, supply chain management, and modular product ecosystems, where assets frequently undergo structural changes.
To address this gap, our work presents a decentralized asset management framework using hierarchical NFTs, built on the officially recognized ERC-7891 standard. ERC-7891 introduces a unified protocol for splitting and merging NFTs while preserving hierarchical consistency and traceability across asset lifecycles. The standard defines five core functions mintParent(), mintSplit(), mintMerge(), sharePass(), and burn() which enable structural transformations, controlled ownership transitions, and hierarchy-aware constraints. These functions ensure structural consistency, maintain ownership proportions, and provide transparent event logs for external verification through standard events Split and Merged. The protocol integrates ERC-6150 for hierarchical modeling and ERC-165 for interface detection, ensuring interoperability across decentralized applications. It is specified through the IERC7891 interface, while the ERC7891, reference implementation demonstrates practical feasibility and serves as a canonical model for adoption within the Ethereum ecosystem. Following rigorous community review, code validation, and the formal Ethereum Improvement Proposal (EIP) process, ERC-7891 was accepted into the Ethereum repository and recognized as an official standard, establishing a foundation for interoperable hierarchical asset management on public blockchains.
To demonstrate the practical applicability of the proposed framework, a Real-World Asset (RWA) application was developed on top of ERC-7891, enabling dynamic asset management through hierarchical NFTs. The system begins by minting a root token representing full ownership of an asset, which can then be split into fractional child tokens with defined ownership percentages. Each child token inherits metadata and a direct parent link, ensuring hierarchical lineage and traceability. Tokens can be split repeatedly to create deeper hierarchies or merged to consolidate ownership, supporting complex ownership transitions absent in existing NFT standards. The application also introduces a marketplace workflow that allows multi-token selection and purchase in a single transaction, automatically merging selected tokens for efficient consolidation. Hierarchy-aware burning constraints ensure systemic integrity by allowing only root tokens with complete ownership to be burned, preventing accidental loss of partial ownership. For transparency and immutability, metadata is stored on IPFS, while smart contracts implemented in Solidity and a Web3-enabled DApp provide an intuitive interface for minting, splitting, merging, trading, and burning NFTs.
Performance evaluation on Ethereum test networks confirmed that ERC-7891 delivers functional correctness, scalability, and gas efficiency. Gas consumption during hierarchical NFT transfers increased linearly with hierarchy depth, while minting, splitting, merging, and burning operations remained within practical limits. These findings validate the protocol’s suitability for enterprise workflows and real-world asset tokenization. By enabling fractional and composable ownership, ERC-7891 lowers barriers to participation in high-value assets, enhances transparency, and creates opportunities in domains such as real estate, supply chain provenance, and collaborative ownership models. Future research will focus on optimizing performance through Layer-2 scaling, enabling cross-chain interoperability, and developing marketplace primitives to standardize split-merge operations across platforms.

목차 (Table of Contents)

• 1. Table of Contents
• List of Figures v
• List of Tables viii
• Abbrebration ix
• I. Introduction 1
• 1.1 Background of the Study 1
• 1.2 Motivation for Using Hierarchical NFTs 2
• 1.3 Purpose and Scope of the Study 3
• 1.4 Problem Statement 4
• 1.5 Research Objectives 5
• 1.6 Methodology Overview 6
• 1.7 Structure of the Thesis 6
• II. Literature Review and Related Research 8
• 2.1 Blockchain Technology 8
• 2.2 NFT Standards 10
• 2.3 Comparative Study of Flat vs Hierarchical NFT Structures 12
• 2.4 Literature Review 15
• 2.4.1 Asset Tokenization 15
• 2.4.2 Fractional Ownership 17
• 2.4.3 NFT Market Trends 21
• 2.5 Summary and Research Gap 23
• III. Hierarchical NFTs with Merging and Splitting 26
• 3.1 Concept of NFT Hierarchies 26
• 3.1.1 Tree-based Structure 26
• 3.1.2 Real World Asset Mapping 27
• 3.2 ERC-6150 and Hierarchical Frameworks 28
• 3.2.1 Overview of ERC-6150 Specification 28
• 3.2.2 Core Features and Functionalities 31
• 3.2.3 Optional Extensions and Enhancements 32
• 3.2.4 Smart Contract Implementation Design 34
• 3.3 Dynamic Management of NFTs with Splitting and Merging 35
• 3.3.1 Design Of The Proposed Scheme 35
• 3.3.2 Implementation Of The Proposed Scheme 39
• 3.3.3 Discussion 47
• 3.4 Digital Products History management 47
• 3.4.1 Design of the Proposed Scheme 47
• 3.4.2 Implementation of the Proposed Scheme 53
• 3.4.3 Discussion 63
• IV. ERC-7891 Protocol 64
• 4.1 Overview of ERC Standards 65
• 4.2 Motivation for ERC-7891 65
• 4.3 Technical Concept and Design 66
• 4.4 Contract Architecture 68
• 4.5 ERC-165 Interface and Standard Detection 72
• 4.5.1 ERC-165 Interface ID for IERC7891 73
• 4.5.2 Implementation in ERC7891.sol 74
• 4.6 Testing and Validation 75
• 4.6.1 Compilation and Deployment 75
• 4.6.2 ERC-165 Interface Detection 75
• 4.6.3 Functional Validation 76
• 4.7 Submission and Acceptance Process of ERC-7891 83
• V. Real World Asset Application Using ERC-7891 88
• 5.1 Overview 88
• 5.2 System Architecture 89
• 5.2.1 External Storage 90
• 5.2.2 Server-Side Metadata Management 90
• 5.2.3 Smart Contract Layer 91
• 5.2.4 User-Side Interface 91
• 5.3 Working Procedure 92
• 5.4 Smart Contract Implementation Design 94
• 5.4.1 Hierarchical Token Functionalities 95
• 5.4.2 Marketplace Functions 97
• 5.4.3 User Management function 103
• 5.5 Implementation of IPFS for RAW Handling 105
• 5.5.1 IPFS Node Configuration 106
• 5.5.2 Metadata Creation and Validation 106
• 5.5.3 Uploading and Retrieving Metadata from IPFS 107
• 5.6 Blockchain Interaction Design 109
• 5.7 Implementation of the RWA Application 111
• 5.8 Evaluation 131
• VI. Conclusion 134
• References 137
• Appendix A: Full ERC-7891.md EIP markdown 143
• Appendix B. ERC7891.sol reference implementation 147
• Appendix C: IERC7891.sol Interface 149
• Abstract 151
• Publications 154