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New players are entering the security token ecosystem every day. Ethereum has just entered the field of play when it reveals a suite of security token standards with the ERC-1400 protocol.
Ethereum continues to adapt to current trends in the cryptocurrency world. While many argued that Ethereum would slowly die and become irrelevant, it was shown to get up and punch. Ether has just gained second place in the market rating rankings. Recently they presented a suite of security token standards under ERC-1400.
The goal of tokens under ERC-1400 will work to provide different entities with a wide range of asset building standards. The aim is to offer companies various options for modeling, trading and managing the ownership of their tokenised security assets. This suite was created to motivate the issuance of security tokens on the Ethereum platform.
Erc 1594 is thought to be the security token of basic functionality. Many people fear that the token security boom will remove the decentralization of cryptocurrencies, but with this, both the smart contracts and the data will work without interruption. This fluid interoperability between smart contracts and data will be on the chain. The off-chain would require sign permissions that in turn reduce costs, improve workflows and simplify smart contracts. This will greatly increase the adoption of blockchain.
The trading of ERC 1594 will be seamless. The transactions will be controlled in the chain in the same way that we check the ERC-20 transactions on etherscan. This chain process will also check if the transaction is valid in terms of the amount the sender claims to have sent. The information provided on the chain will also prevent the sender from making transactions if they have not completed a KYC that will be required to negotiate security tokens.
ERC 1410 will serve the distribution balances. The blockchain provides transparency for cryptocurrencies and, based on the number of tokens in your possession, you will be divided into a specific category. An example of this will be this excerpt from the article by Adam Dossa:
"For example, suppose an investor has the following categories of shares:
- 30 tokens: blocked for 3 years, without voting rights
- 40 tokens – blocked for 1 year, with full voting rights
- 50 tokens – unlocked, full voting right
In order to government you would like to know that there are 90 tokens with voting rights, for the purpose of trading there is a balance of 50 tokens and for the evaluation purposes you care about the total of 120 tokens. "
Next is the ERC-1644 token. This token will allow a function that many people will find odd. A controller operation will give someone who is authorized to execute a transaction between addresses strongly. This is mainly necessary for court orders, fraudulent activities or lost private keys. This process would remain visible to the main token holder, and they can also prevent it if the action taken to carry out transactions with force has not been approved.
The ERC 1643 will provide a documentation program without problems. This feature will allow verified personnel to attach notarized documents to tokenized securities. Investors would be informed if such an event occurred. Each update will be registered with the hash number attached to the document that was uploaded. Every action is documented and date and time.
The ERC 1400 security token ecosystem is still growing. The new areas under investigation concern the distribution of dividends, the distribution of capital and reserved transactions.
This article was written with the help of Adam's Polymath Medium article. For a more in-depth look, feel free to read it here. Or visit Ethereums' official Github.
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