An open standard for security tokens
The TokenSoft engineering team is proud to announce its open-sourced contribution to the Ethereum Improvement Proposal repository with the introduction of “ERC-1404: Simple Restricted Token Standard.” ERC-1404 is designed for security tokens, tokenized securities and other tokens that carry complex compliance requirements.
ERC-1404 is a token standard developed with corporate governance, banking, and securities laws in mind. It is fully open source, which is paramount to ensuring its security, quality and interoperability.
“We’ve spent the past year gaining insight from issuers, top securities law firms and major exchanges to better understand their token compliance needs,” said Mason Borda, founder of TokenSoft. “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.”
ERC-1404 carries all of the same benefits of an ERC-20 token — simple, easy to deploy and interoperable with the entire Ethereum universe — with a few key improvements that allow issuers to enforce regulatory transfer restrictions. The new standard adds two basic functions:
// The Simple Restricted Token Standard Interface
contract ERC1404 is ERC20 {
// returns a restriction code,
// where 0 is reserved for success
function detectTransferRestriction (
address from,
address to,
uint256 value
) public view returns (uint8);
// returns a message string
// — a human-readable message for the passed restriction code
function messageForTransferRestriction (
uint8 restrictionCode
) public view returns (string);}
With just a few lines of code, token issuers can enforce transfer restrictions within their smart-contract, enabling them to control when those tokens can be transferred, how many tokens can be transferred, and under what conditions. It’s that simple. This function can be extremely valuable in many situations, including when issuers are looking to confirm if the token recipient is whitelisted, or checking if a sender’s tokens are frozen in a lock-up period.
“The future of security tokens requires compliance with relevant laws, interoperability, and a user experience that works for all skill levels,” said Lawson Baker, Head of TokenSoft’s Special Projects Division, Project Zero. “By supporting ERC-1404, token issuers, exchanges and wallets can deliver a great user experience to investors while ensuring compliance.”
TokenSoft has introduced this open standard as a way to push the industry forward, towards global adoption. This standard is meant to be used by anyone, anywhere, who is looking to launch a compliant token.
The TokenSoft team hopes you like it, and encourages you to contribute to its Ethereum Improvement Proposal.
Contribute to the discussion and standard here: https://github.com/ethereum/EIPs/issues/1404
Visit the ERC-1404 website for more information here:
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Disclaimer
This release is for informational purposes only, does not constitute an offer or solicitation to sell securities, and shall not be construed as legal advice in any jurisdiction. Certain information set forth in this release contains “forward-looking statements” under applicable securities laws. TokenSoft undertakes no obligation to update forward-looking statements if circumstances or management’s estimates or opinions should change, except as required by applicable securities laws.
