Skip to main content

​
Core Components

Sonar connects three key concepts to enable compliant token sales:

Entity

The compliance identity an individual or organization that completes KYC/KYB verification and receives eligibility to participate in sales.

Wallet

The blockchain address linked to a verified entity and used to execute onchain purchases with signed permits.

Purchase Permit

The authorization permit signed proof that a wallet can purchase on behalf of an eligible, verified entity.

​
How It Works

Sonar bridges compliance verification and onchain execution through purchase permits, signed proofs that a wallet can purchase on behalf of a verified entity that passes all eligibility check as defined by the sale.

​
The Purchase Flow

  1. Entity Verification: Users complete KYC/KYB and receive verified entity status
  2. Wallet Connection: Verified entities link their blockchain wallet addresses
  3. Purchase Authorization: Sonar generates signed permits for eligible purchases
  4. Onchain Execution: Your smart contract validates permits and executes purchases
Purchase permits are short-lived (10 minutes), sale-specific, and tied to both the entity and wallet address for maximum security.

​
Offchain Mechanism Architecture

A critical aspect of Sonar’s design is that pricing and settlement logic runs offchain in Sonar’s backend, not in the smart contract. The smart contract serves as an escrow and record-keeping mechanism:
  • Records committed funds and bid data
  • Validates purchase permits
  • Stores final allocations
  • Processes refunds and proceeds
This separation provides flexibility to change pricing and settlement strategies without modifying contracts, while maintaining the security of on-chain fund custody.

​
Terminology

Understanding the terminology used throughout the documentation:
TermDefinition
CommitmentFunds pledged by a participant during the sale. General term for any sale type.
BidA commitment that includes a price (used in auctions). Contains both amount and price.
AllocationThe portion of a participant’s commitment that is accepted after settlement.
RefundThe portion of a participant’s commitment that is returned (commitment minus allocation).

​
Compliance & Security

Sonar handles the complex compliance requirements automatically:
  • KYC/KYB Verification: Entities complete identity verification appropriate for their jurisdiction
  • Risk Screening: All wallet addresses are screened against sanctions lists and high-risk activity
  • Purchase Limits: Flexible purchase limits for different entity types
  • Continuous Monitoring: Compliance checking throughout the sale process

​
Sale Lifecycle

Token sales progress through five distinct phases:
  1. Setup - Configure sale parameters, deploy contracts, integrate frontend
  2. Commitment Phase - Users commit funds, Sonar issues purchase permits
  3. Cancellation Phase (optional) - Cooling-off period for regulatory compliance
  4. Settlement Phase - Compute final allocations and record on-chain
  5. Distribution - Deliver tokens and process refunds

Sale Lifecycle Details

See the complete end-to-end sale process with timing and responsibilities