What is an ERC-1400 token?

ERC 1400 token is a cryptotoken built on Ethereum blockchain. It differs from other tokens built on ETH (ERC-20, ERC-777), because of special requirements for Security tokens.

Accelerate the issuance and management of securities on the Ethereum blockchain by specifying a standard interface through which security tokens can be operated on and interrogated by all relevant parties.

Security tokens differ materially from other token use-cases, with more complex interactions between off-chain and on-chain actors, and considerable regulatory scrutiny.

Security tokens should be able to represent any asset class, be issued and managed across any jurisdiction, and comply with the associated regulatory restrictions.

Requirements

Moving the issuance, trading and lifecycle events of a security onto a public ledger requires having a standard way of modeling securities, their ownership and their properties on-chain.

The following requirements have been compiled following discussions with parties across the Security Token ecosystem.

  • MUST have a standard interface to query if a transfer would be successful and return a reason for failure.
  • MUST be able to perform forced transfer for legal action or fund recovery.
  • MUST emit standard events for issuance and redemption.
  • MUST be able to attach metadata to a subset of a token holder’s balance such as special shareholder rights or data for transfer restrictions.
  • MUST be able to modify metadata at time of transfer based on off-chain data, on-chain data and the parameters of the transfer.
  • MAY require signed data to be passed into a transfer transaction in order to validate it on-chain.
  • SHOULD NOT restrict the range of asset classes across jurisdictions which can be represented.
  • SHOULD be ERC20 and ERC777 compatible.

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