ERC-884

What is ERC-884?

ERC-884 is a token standard on the Ethereum blockchain specifically designed for tokenized securities. It extends the ERC-20 standard to meet the regulatory requirements for representing equity securities as tokens. This standard was proposed to facilitate compliant issuance and trading of security tokens on the Ethereum network.

Key Features

1. Identity Verification: Requires token holders to be verified for regulatory compliance.

2. Whitelist Management: Maintains a list of approved addresses for holding and transferring tokens.

3. Forced Transfers: Allows for token transfers by authorized entities, necessary for legal compliance.

4. Token Cancellation: Enables the cancellation of tokens, which is sometimes required in securities.

5. Dividend Distribution: Supports the distribution of dividends to token holders.

Core Functions

1. addVerified(): Adds an address to the whitelist of verified token holders.

2. removeVerified(): Removes an address from the whitelist.

3. cancelAndReissue(): Cancels tokens from one address and reissues them to another.

4. forcedTransfer(): Allows an authorized entity to transfer tokens between addresses.

5. isVerified(): Checks if an address is on the whitelist.

Advantages

1. Regulatory Compliance: Designed to meet securities regulations.

2. Enhanced Control: Provides issuers with necessary control over token transfers.

3. Transparency: Offers clear mechanisms for managing shareholder identities.

4. Flexibility: Allows for implementing various corporate actions like stock splits.

Use Cases

1. Equity Tokenization: Representing company shares as blockchain tokens.

2. Private Placements: Facilitating compliant private investment rounds.

3. Shareholder Management: Managing shareholder rights and communications.

4. Dividend Distribution: Automating the process of distributing dividends.

Challenges

1. Regulatory Landscape: Evolving regulations may require standard updates.

2. Privacy Concerns: Balancing transparency with shareholder privacy.

3. Interoperability: May not be fully compatible with all ERC-20 infrastructure.

4. Adoption: Requires widespread acceptance in the security token ecosystem.

Similar Terms

• ERC-20: The original Ethereum token standard that ERC-223 aims to improve.

• ERC-777: Another proposed improvement to ERC-20 with some similar goals.

• Ethereum: The blockchain platform that EIPs are designed for.

• Smart Contract: The underlying technology that enables token standards like ERC-223.