diff --git a/docs/architecture/README.md b/docs/architecture/README.md
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--- a/docs/architecture/README.md
+++ b/docs/architecture/README.md
@@ -26,3 +26,4 @@ Please add a entry below in your Pull Request for an ADR.
 ### ADR Table of Contents
 
 - [ADR-002-Docs-Structure](./adr-002-docs-structure.md)
+- [ADR-003-Module-Sub-Accounts](./adr-003-module-sub-accounts.md)
diff --git a/docs/architecture/adr-003-module-sub-accounts.md b/docs/architecture/adr-003-module-sub-accounts.md
new file mode 100644
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+++ b/docs/architecture/adr-003-module-sub-accounts.md
@@ -0,0 +1,116 @@
+# ADR 3: Module Sub-Accounts
+
+## Changelog
+
+## Context
+
+In the design of a simple decentralized exchange, it is likely that a `ModuleAccount` will be used to store the liquidity used for fulfilling trades. 
+In the case of the uniswap, trading pairs do not share liquidity pools. A reserve pool of atoms may only be allowed to be traded for denom A and not denom B. 
+This would require multiple accounts since the atom is fungible coin. It is likely that trading pairs will be added over time, but `ModuleAccount`s cannot be dynamically created.
+`ModuleAccount`s must be declared upon Supply Keeper initialization. In addition to this they don't allow for separation of fungible coins within an account.
+
+We want to support the ability to define and manage sub-module-accounts.
+
+## Decision
+
+We will modify the existing `ModuleAccount` interface to support a heirarchical account structure.
+The `ModuleAccount`s defined upon initialization of Supply Keeper are the roots of family trees.
+Each `ModuleAccount` in a family tree may have zero or more children.
+A `ModuleAccount` with one or more children is considered a parent to each child.
+All `ModuleAccount`s have exactly one parent, unless they are the root of their family tree.
+
+`ModuleAccount` permissions will be renamed to `Attribute`.
+Each child's attributes must be a subset of their parent's attributes.
+There is no limit on the number of children a `ModuleAccount` can have.
+No `ModuleAccount`s can be removed from a family tree.
+A `ModuleAccount` name must not contain ":".
+A `ModuleAccount` address is the hash of its full path.
+A `ModuleAccount`s full path is the path of the `ModuleAccount` names used to reach the child.
+It starts with the root `ModuleAccount` name and is separated by a colon for each parent that follows until the child is reached.
+
+Example name: `root:parent:child`
+
+We will add a `TrackBalance` function which recursively updates the passive tracking of parent balances.
+A `ModuleAccount` has no pubkeys.
+The function `AddChildToModuleAccount` will be added to Supply Keeper, 
+It will validate that the granted attributes are a subset of the parent and then register the child's name with the Supply Keeper.
+
+### Implementation Changes
+
+Modify `ModuleAccount` interface in `x/supply`:
+
+```go
+type ModuleAccount interface {
+    GetName() string
+    GetAddress() string
+    GetAttribute() []string 
+    HasAttribute() bool
+    GetParent() string
+    GetChildren() []string
+    HasChild(string) bool 
+    GetChildCoins() sdk.Coins
+}
+```
+
+```go
+// Implements the Account interface.
+// ModuleAccount defines an account for modules that holds coins on a pool. A ModuleAccount
+// may have sub-accounts known as children.
+type ModuleAccount struct {
+    *authtypes.BaseAccount
+    Name        string    `json:"name" yaml:"name"`               // name of the module without the full path
+    Attributes  []string  `json:"attributes" yaml:"attributes"`   // permissions of module account
+    ChildCoins  sdk.Coins `json:"child_coins" yaml:"child_coins"` // passive tracking of sum of child balances
+    Children    []string  `json:"children" yaml:"children"`       // array of children names
+    Parent      string    `json:"parent" yaml:"parent"`           // full path of the parent name
+}
+```
+
+```go
+// Pseudocode
+func TrackBalance(name string, delta sdk.Coins) {
+    if name == "" {
+        return
+    } else {
+        self.Balance += delta
+    }
+    TrackBalance(chopString(name)) // chop off last name after last ":"
+    return
+}
+```
+
+**Attributes**:
+
+Attributes for a root `ModuleAccount` are declared upon initialization of the Supply Keeper.
+A child `ModuleAccount` must have a subset of its parents attributes.
+
+**Other changes**
+
+We will add an invariant check for the `ModuleAccount` `GetChildCoins()` function, which will iterate over all `ModuleAccounts` to see if the sum of their child balances equals the passive tracking which is returned in `GetChildCoins()`
+
+## Status
+
+Accepted
+
+## Consequences
+
+### Positive
+
+* `ModuleAccount` can separate fungible coins.
+* `ModuleAccount` can dynamically add accounts.
+* Children can have a subset of its parent's attributes.
+
+### Negative
+
+* `ModuleAccount` cannot be removed from a family tree.
+* `ModuleAccount` implementation has increased complexity.
+
+### Neutral
+
+* `ModuleAccount` passively tracks child balances.
+
+## References
+
+Specs: [ModuleAccount](https://github.com/cosmos/cosmos-sdk/blob/master/docs/spec/supply/01_concepts.md#module-accounts)
+
+Issues: [4657](https://github.com/cosmos/cosmos-sdk/issues/4657)