# ERC-7578: Physical Asset Redemption

Source: https://www.eipsfordesigners.com/standards/ERC-7578
Agent brief: https://www.eipsfordesigners.com/standards/ERC-7578/agent.md
Machine-readable JSON: https://www.eipsfordesigners.com/api/standards/ERC-7578
Last reviewed: 2026-05-25
Last updated: 2026-05-25

| Field | Value |
| --- | --- |
| Status | Final |
| Chain | both |
| Category | Physical & Real World |
| Journey stages | Specialized Interactions |
| Detailed guide | Yes |
| Official specification | https://eips.ethereum.org/EIPS/erc-7578 |
| Discussion search | https://ethereum-magicians.org/search?q=ERC-7578 |

## UX Impact

Users holding physical-asset-backed NFTs can see verified real-world details: who issued it, who holds the physical item, where it's stored, legal terms, and declared value. Design implications: display token issuer, asset holder, storage location as structured fields, link to legal terms (IPFS), show jurisdiction and declared value prominently, design verification badges for issuer reputation. Design decisions: how much legal info to surface upfront vs expandable sections, whether to show issuer verification status, formatting currency/value display, handling missing optional fields gracefully.

## Summary

Users holding physical-asset-backed NFTs can see verified real-world details: who issued it, who holds the physical item, where it's stored, legal terms, and declared value.

## For Designers

- You can layout issuer, custodian, storage, and declared value as scannable rows above the fold.
- Your legal section can collapse behind View terms with IPFS link and jurisdiction chip.
- You can badge Verified issuer when reputation attestation exists.

## Applicability

### When to Use

- NFTs represent vaulted gold, watches, wine, or redeemable physical goods.
- RWA platform uses ERC-7578 metadata schema.
- Trust requires issuer and custody transparency.

### When to Avoid

- Pure digital art with no physical claim.
- Metadata lacks structured RWA fields.
- Regulatory review cannot support displayed claims.

## Problems It Solves

### Opaque RWA NFTs

Impact: critical

Old way: JPEG with vague description

New way: Structured issuer custody value fields

### Legal terms inaccessible

Impact: high

Old way: Buried broken link

New way: IPFS terms with jurisdiction

### Redemption status unknown

Impact: medium

Old way: Email support only

New way: On-app redemption tracker

## Anti-Patterns

### No issuer row on RWA detail

Severity: critical

Cannot assess trust

Instead: Issuer first row with verification badge

### Declared value without currency

Severity: high

Ambiguous amount

Instead: USD 12,400 formatted

### Legal terms only as raw IPFS hash

Severity: medium

Users cannot access

Instead: View terms button with fetch preview

## Design Decisions

### Legal terms upfront?

Recommendation: Collapsed with summary bullets upfront.

Rationale: Compliance accessible without wall of text.

### Currency display for value?

Recommendation: ISO currency plus formatted amount.

Rationale: Declared value needs unit clarity.

### Issuer verification tiers?

Recommendation: Verified / Unverified / Unknown badges.

Rationale: Binary verified-only hides nuance.

## States to Design

### Fully documented asset

Trigger: All key fields present.

User need: Trust and compare.

Design response: Complete summary card.

### Missing optional field

Trigger: Storage or terms absent.

User need: Not think broken.

Design response: Not provided gray state.

### Unverified issuer

Trigger: No attestation.

User need: Extra caution.

Design response: Unverified issuer warning banner.

### Redemption in progress

Trigger: User started claim.

User need: Track shipment.

Design response: Redemption status stepper.

### Redeemed — NFT burned or locked

Trigger: Physical delivered.

User need: See completion.

Design response: Redeemed archive state.

## Vocabulary

- Use "Issued by" instead of "Token issuer address": Entity name primary.

- Use "Stored at" instead of "Custodial storage URI": Location language.

- Use "Declared value" instead of "Oracle price feed": Legal distinction from market price.

## What to Prototype First

### Physical backing summary

Buyer diligence starts at structured fields.

Covers: Full metadata, Missing optional fields

- Issuer row
- Custodian
- Storage location
- Declared value
- Jurisdiction

### Legal terms expand

Lawyers need access; users need skim.

Covers: Terms linked, Missing terms

- Collapsed legal section
- IPFS link
- Jurisdiction badge

### Redeem physical flow

Holder claims real item.

Covers: Eligible, In transit, Redeemed

- Redeem CTA
- Shipping form
- Status tracker

### Unverified issuer warning

Not all issuers equal trust.

Covers: Verified, Unverified

- Issuer badge tier
- Verify issuer link
- Risk disclaimer

## Mental Model

### Token

Digital claim on physical asset.

### Issuer

Entity that minted claim — trust anchor.

### Custodian

Who physically holds the item.

### Declared value

Stated worth — not guaranteed market price.

### Redemption

Process to receive physical item.

## Seen in the Wild

- Courtyard: Physical collectibles vault and redemption UX. (https://courtyard.io/)

- 4K: Vaulted asset tokenization display patterns. (https://4k.com/)

- Tether Gold: Declared value and custody disclosure. (https://gold.tether.to/)

## On Monad

### RWA redemption txs

Ethereum: Redeem gas discourages claims

Monad: Lower fees ease physical claim flow

Design implication: Single-tap redeem start on Monad.

### Metadata refresh

Ethereum: Custody updates slow to show

Monad: Fast updates after custody change events

Design implication: Inline refresh on issuer status change.

## UX Patterns

### RWA Summary Card

Structured physical backing fields.

Components: IssuerRow, CustodianRow, ValueDisplay, TermsExpand

User flow:

- Open token
- Scan backing
- Expand legal
- Decide trust

Mockup registry key: `concept/physical-link` (React UI on the live standard page).

### Physical Redemption Tracker

Claim status from request to delivery.

Components: RedeemCTA, StatusStepper, ShippingForm

User flow:

- Tap Redeem
- Submit details
- Track steps
- Mark complete

Mockup registry key: `concept/physical-link` (React UI on the live standard page).

## Related Standards

- ERC-6672: Multi-redemption perks on same NFT

- ERC-721: Physical asset metadata extension

## Technical Notes

ERC-7578 RWA fields must distinguish declared value from market price; verify issuer when possible.