ERC-1400: New Token Standard that can Bridge the Gap between Crypto and Fiat Securities
There are many debates raging on various aspects of crypto token credibility. As far as Security Token Offerings (STO) are concerned, some fiat analysts believe that Security Tokens should not be legally classified as securities. The most common reason given for this claim is that these Security Tokens are often not backed by real-world assets.
The cryptosphere has developed a new solution to appease these analysts. Meet ERC-1400, a new token standard. ERC-1400 is currently being drafted, which means that it is under review by the Ethereum community. The community has proposed some important specifications to be added to existing token standards that will make Security Tokens more credible. ERC-1400 will comply with both ERC-20 and ERC-777 standards, and will ensure that Security Tokens comply with regulations.
Important Features of the ERC-1400 Token Standard
Blockchain developers Stephane Gosselin, Adam Dossa, Pablo Ruiz, and Fabian Vogelsteller (who originally proposed the new standard on Github) have developed the new standard’s major features, including:
· A standard interface to query, validate, and justify success and failure of transactions.
· Options for forced transfer (for legal and fund-recovery procedures.)
· The possibility of emitting of issuance and redemption in standard events.
· A mandatory ability to attach metadata (ie identity information) to a token holder’s balance.
· The possibility to modify metadata and transaction parameters on- and off-chain.
· Requirement of “signed” data to validate transactions on-chain.
· Limitless range of asset classes across representable jurisdictions.
· Compliant with both ERC-20 and ERC-777 standards.
What Do the New Features Mean in Layman’s Terms?
Although all industry professionals who deal with Security Tokens (such as the CINX token of the CINDX platform) can immediately understand the advantages of this new standard, let’s explore how these features add value to the current Security Token standardization for non-technical, everyday users.
First of all, the ERC-1400 standard will make security token (ST) transaction process more transparent, as there will be a standard interface to check the status of any transaction in real time. The process of crediting the tokens to a wallet can also be reversed, as forced transfer becomes is an option in case of legal mandates for fund recoveries.
Another way to say this is that once the proposed features are accepted by the Ethereum community, any transfer could be reversed or held back if there is any legal issue (such as money laundering) that diminishes the reputation of crypto token transfers.
This means that the chances of using crypto tokens for money laundering would be almost eliminated. In turn, STOs will become a more secure and safer process to launch legal and reliable crypto assets.
Another very important feature of the new standard will be the non-fungibility of tokens. This will allow account holders the right to accept or reject token transfers into his or her account.
In other words, ERC-777 tokens would be like securities that cannot be exchanged with other securities of the same status and value. These Security Tokens will be a non-exchangeable asset that can be utilized as securities once the ownership is granted to an individual.
The Benefits of ERC-1400 Standardization
Apart from making STOs more legitimate, the ERC-1400 standardization will make tokens a more dependable form of investment that can be treated with the same status as other kinds of securities.
CINX Security Tokens
Security tokens are of greater value and significance than utility tokens, the value and future prospects of which are quite limited. That is why CINDX, the world’s top ethical crypto asset-management firm, has opted to make its recently launched CINX token a Security Token.
The CINX token has all features that security tokens have. Its future utility and financial value are kept intact by the rules that have been laid out on CINX Prospectus. Thus, CINX tokens are more credible than utility tokens and other kinds of tokens that have not been classified as securities.
To know more about CINX Security tokens, please visit CINDX.io.
CCINDX is an investment platform that allows individuals to combine several crypto exchange accounts into one trading terminal, and gives them the option to connect to the best managers without having to transfer their funds. Moreover, implementation of blockchain-based transactions will allow the trading history to be saved, and a rating system will be used to differentiate the successful managers from the less successful ones.
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