A Look at the New Security Token Standard – ERC-1404
The security token issuance platform, TokenSoft, raised eyebrows this week with their announcement of the ERC-1404 security token protocol. Security tokens adhere to strict guidelines pertaining to their ownership and transference. Recognizing the need to integrate these features directly into their protocol, TokenSoft developers created the ERC-1404 standard. TokenSoft spent the last year developing their new security token standard. Developers took cues from the firm’s long list of clientele and business partners. Developers worked hand-in-hand with security law firm experts, major exchanges, and startups looking to utilize security token offerings (STOs) in their fundraising campaigns.
In a public statement, TokenSoft's Special Projects Division head, Lawson Baker explained how the future of the security token market depends heavily on creating an easy-to-use system that any company can utilize. He stated that interoperability is another primary concern that developers consider paramount in adoption. Security tokens provide users with a more robust experience when platforms are interoperable.
ERC-1404 is an open-sourced Ethereum-based protocol that integrates securities laws directly into the tokens construction. The ERC-1404 protocol enables a number of unique features. These features include integrated token lock-up periods, Know Your Customer (KYC) integration, Anti-Money Laundering (AML) systems, Private real-estate trusts, and Delaware General Corporations Law Shares compliance.
Another unique feature is the ability to send human-readable messages when token transfers revert. Reverted token transactions are transactions that did not go through for some reason. The transparent nature of the project is such that it allows the token user the ability to understand why a token reverted. This feature is sure to remove some of the mystery behind why these errors occur within the platform.
In addition to releasing the project's code to the public, TokenSoft created a helpful website that showcases the advantages of their new token standard. TokenSoft hopes to see their new standard become commonplace in the ever-growing security token sector.
Security Token Standards are Growing
TokenSoft isn't the only development team looking to corner the security token market. Already, Ethereum developers launched the ERC-725 identity protocol which complies with KYC regulations. Identity-based tokens could be the next big thing in the cryptospace as regulators look to shed light on the industry.
Polymath is another token issuance platform which decided to produce a new security token standard. Polymath‘s platform utilizes the T-20 protocol to accomplish much of the same tasks as its Ethereum-based counterparts. Polymath’s T-20 doesn’t utilize Ethereum’s blockchain. Instead the platform created its blockchain specifically for the job of integrating security token procedures. This decision helped Polymath gain traction over the last few months.
TokenSoft Positions for the Future
TokenSoft's latest move positions the firm perfectly for future security token usage in the space. Security tokens fill a much-needed desire to move the cryptomarket towards a more regulated atmosphere. Platforms such as TokenSoft push crypto adoption to increased level by providing traditional investment firms the ability to participate in the cryptospace.