Five Simple Features that can Improve the Current Generation of Security Token Platforms

Jesus Rodriguez
Sep 18, 2018 · 5 min read
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1-JavaScript Interfaces

The programming models for most security token platforms is pretty rudimentary compared to some of the more mainstream blockchain protocols. As a result, we are still not seeing blockchain developers super excited about the security token space and no relevant third parties are building DApps on the current group of security token platforms. Obviously, this is also a reflection of the youth of the security token space.

2-A Smart Contract Catalog

As security token platform evolves, it’s almost certain that they will create different smart contracts that abstract many of the regulatory or integration components of crypto-securities. There are several classes of smart contracts such as compliance, integration with exchanges or integration with investor pools that are already relevant in security token issuances.

3-A Real Security Token Standard

The security token space is evolving fast enough that the need for standards is going from being a fancy requirement to a very relevant element of this nascent industry. Companies like Polymath have taken the charge producing the first iterations of security token standards but they can certainly use some help. The current wave of security token standards are hardly sufficient to model the behavior of the different types of crypto-securities in the real world.

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4-Disclosures Marketplace & Analytics

Professor Stephen McKeon often uses the term disclosure marketplace to refer to a model in which authorized third parties can report information relevant to a security token. From audit reports on the valuation of a real estate lease to financial information about a private company, disclosures are a key element to evaluate the performance of a security token. The lack of solid disclosure mechanisms is one of the elements preventing large institutional investors from fully participate in the security token space.

5-Programming Models and Developer Experience

The current programming experience of most security token protocols is relatively complex even by blockchain standards and very limited from a functional standpoint. I believe that’s one of the aspects preventing blockchain developers from jumping into the security token space. Companies like Securitize have started addressing this challenge with the release of their Developer Platform but more work is required in this area.

Other Features

I selected five capabilities that seem to have the right balance between being relatively easy to deliver( easy is not easy by blockchain standards 😉) and filling an important gap in the current group of security token platforms. Other aspects such as better tooling, identity-governance models, oracle enablement as well as the interoperability with foundational protocols such as Civic(identity), {SET}(derivatives) or 0x(decentralized exchanges) are also relevant. Security token platforms like Securitize, TrustToken and Polymath have been able to come a long way in a short period of time so, hopefully, we will see some of these features in the near future.

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Coinmonks is a non-profit Crypto educational publication.

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Jesus Rodriguez

Written by

Chief Scientist, Managing Partner at Invector Labs. CTO at IntoTheBlock. Angel Investor, Writer, Board Member of Several Software Companies

Coinmonks

Coinmonks

Coinmonks is a non-profit Crypto educational publication. Follow us on Twitter @coinmonks Our other project — https://coincodecap.com

Jesus Rodriguez

Written by

Chief Scientist, Managing Partner at Invector Labs. CTO at IntoTheBlock. Angel Investor, Writer, Board Member of Several Software Companies

Coinmonks

Coinmonks

Coinmonks is a non-profit Crypto educational publication. Follow us on Twitter @coinmonks Our other project — https://coincodecap.com

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