> For the complete documentation index, see [llms.txt](https://s0x.gitbook.io/docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://s0x.gitbook.io/docs/primary-issuance/roles-and-permissions/tierer.md).

# Tierer

Within the tokenization engine ecosystem, tierers play a pivotal role in establishing and modifying the standardized transfer restrictions outlined by the Rain protocol for both the associated NFT and ERC20 tokens. These tier restrictions, governed by the ITier interface, enable efficient assignment of membership levels to addresses, accommodating up to eight distinct tiers such as bronze, silver, gold, and more.

An essential application of tiering in custodial assets lies in managing regulatory requirements, such as KYC/AML restrictions. The Rain protocol incorporates a versatile Verify contract, agnostic to backend systems, which seamlessly integrates KYC/AML approvals into ITier contracts.

ITier contracts offer flexibility beyond traditional "approve lists" by allowing them to function as "block lists" for more decentralized asset management. An example of this approach can be observed in USDC, where all addresses are permitted to transfer funds by default, while freezing only those explicitly flagged by law enforcement agencies.

In cases where a user, who already possesses tokens, no longer meets the tier requirements, either due to tier loss or changes in the tier contract itself, their assets are frozen but remain associated with their address. At this juncture, two scenarios emerge for the movement of these assets. Firstly, the user can be reinstated to the minimum tier required to regain access to the assets. Alternatively, a confiscator can take control of the frozen assets, as elaborated below.

It is important to note that tierers do not directly determine the users who can interact with the tokens. Instead, they define contracts responsible for implementing access restrictions and stipulate the minimum tier level necessary to engage with the assets.

The level of centralization within a system significantly influences the extent of control over tiering logic, allowing for potential modifications over time. In highly centralized systems, tight control can be exerted, enabling adjustments to tiering criteria. In contrast, more decentralized systems have the option to establish tiering structures and subsequently renounce administrative privileges, or even entirely remove tier restrictions, fostering a greater degree of decentralization.

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