According to the authors, who presented their security token standard via Github, the new resulting token should be compliant with both ERC-20 and ERC-777 standards. On the other side, the token will differ from utility tokens as it will be backed by real-world assets. Also, the token will have to ensure a complex connectivity environment between on-chain and off-chain actors. Thus, the security token imposes a completely new standard.
Gosselin and his associates have defined a list of parameters that they think are needed for a standard to be implemented in the security token space:
Thus, the new standard imposes the ability to generate forced transfers when fund recoveries or legal actions are needed. Besides, the tokens have to be non-fungible or at least partially-fungible and must be able to transfer attachments or modifiable metadata to the partial balance of a token holder. In other words, according to the proposed standard, security issuers would have the possibility to reject or approve various transactions.
Also, as a partially-fungible token, holders won’t be able to exchange it with another token of the same type. A good example of non-fungible tokens is CryptoKitties, which rely on the ERC-721 standard.
ERC-1400 is currently in its draft phase, meaning that the Ethereum community accepted it as worthy of review. However, the final verdict should come after a longer period.
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