Colored coins represent assets on top of blockchain technology. Their value is the issuer's promise to redeem them for assets that they represent.
Technically, the intention here is not to integrate into the core code. In Exscudo ecosystem, colored coins are marked to represent existing crypto or fiat currencies and assets.
In EON network, the Gateway element of the ecosystem issues colored coins for specific user accounts. The network monitors the quantity and precision of coins, but coins’ essence (the equivalent of assets) does not make any difference for the network. It means, the network only stores the identificator of this or that colored coin which numerical component is equal to the amount of represented assets belonging to the user the coins have been issued for.
After the initial emission, users can modify the overall amount the coins. To reduce or to increase the overall amount of the colored coins, a user makes a corresponding transaction: either withdrawing represented assets to external networks, or depositing them into EON network. The new emission operates in the account of the user, adding or removing coins from it.
In Exscudo ecosystem, the value of colored coins is determined by the issuer. The issuer of the colored coins is the Gateway receiving information about rates from Exscudo Exchange in real time.