Here at securities.io, we believe that tokenized securities are the future of crypto. While there will always be a place for utility tokens, they will eventually be supplanted as the most common tokens by their security counterparts.
Much as there are various standards that utility tokens are built upon, the same holds true for security tokens.
ERC-1404 : Simple Restricted Token Standard
Developed by TokenSoft, this new standard was recently announced by CEO, Mason Borda. It is open-source and tailor designed to serve those operating under compliance requirements. It is known as ERC-1404.
In their press release, Borda commented, “We’ve spent the past year gaining insight from issuers, top securities law firms and major exchanges to better understand their token compliance needs…Now, we’re excited to deliver a standard that comprehensively addresses those needs, and provides the tools necessary for issuers to adhere to global banking and securities laws.”
The token builds upon the popular ERC-20 standard by adding multiple additional features. This is done through the ability to apply transfer parameters within a smart contract.
– When tokens can be transferred
– How many can be transferred
– Conditions needed to allow transfer
These changes are achieved through simple lines of code as demonstrated in their announcement.
Led by a duo of experienced professionals, TokenSoft is a promising company. Their goal is simple: To help companies wishing to tokenize their securities along their path. They are able to provide a launching platform that ensures security and adherence to enforced regulations.
TokenSoft is not the first company to venture down their path. They stand next to other well-known names striving for the same goal. Here are a few:
Each of these companies are actively laying the groundwork needed to allow seamless tokenization in the future. As these trendsetters navigate the waters and create a blueprint on how to efficiently achieve their goals, look for an increasing number of companies to jump on board.
More to Come
As interest in security tokens soars, companies interested in creating one need a means to do so. Companies like TokenSoft, and those discussed earlier are filling that need. Through the creation of these token standards, they are building the foundation needed for the next step in the world of crypto.
Lawson Baker of TokenSoft understands this, and stated in their press release, “The future of security tokens requires compliance with relevant laws, interoperability, and a user experience that works for all skill levels…By supporting ERC-1404, token issuers, exchanges and wallets can deliver a great user experience to investors while ensuring compliance.”
ERC-1404 isn’t the first security token protocol, and it won’t be the last.