# Semantic Layer

**Focus:** Meaning and interpretation. Specifies what the structured information means. Blockchain-agnostic, enables interoperability at the application level.

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**Objective:** To define and ensure the correct understanding and interpretation of data exchanged between different systems or blockchains.

**Description:** The Semantic Layer is crucial for ensuring that the data exchanged between different blockchains or systems carries the same meaning across all of them. This layer defines the shared vocabularies, ontologies, and context that allow for consistent interpretation of data, regardless of where it originates or where it's consumed. It ensures that a piece of information from one blockchain is understood in the exact same way by another blockchain, preventing misunderstandings or misinterpretations in crosschain operations. Provides consistent semantics, taxonomies, vocabularies, and ontologies to represent concepts used in cross-chain communications. Enables shared interpretations and machine-readable interoperability. It provides common interoperable "language".

**Layer owner:** Standards organizations, industry groups, consortiums that define common vocabularies or ontologies, and participating entities in the crosschain ecosystem that agree upon shared semantics, organizations or consortiums that set technical standards for crosschain operations.

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**Relevant standards:**&#x20;

* ISO 20022

**High level, wide ideas:**

* Common semantic models and vocabularies to represent regulated entities like securities, derivatives, loans, insurance, etc. This enables shared understanding of regulated assets across chains.
* Standardized semantics for identity, participants, and roles (e.g. investor, broker-dealer, custodian) along with relevant attributes. This facilitates compliance with KYC, AML regulations.
* Formal semantics for transactions, trades, and business events to enable common interpretation of activities and oversight.
* Semantic definitions and shared understanding of regulated jurisdictions, markets, exchanges, and economic zones.
* Extensible taxonomy and ontology to incorporate regulatory concepts like reporting, disclosure, accreditation.
* Formal representation of regulations, rules, policies to facilitate standards-based compliance across chains.
* Semantics for defining scopes, constraints, dependencies, and permissions across interoperability components.
* Metadata standards to communicate regulatory context, intent, and qualifications associated with cross-chain data flows.
