The invention of tokens has led to an explosion in innovation, with thousands of tokens appearing on the scene in recent years. Security tokens represent “stakes” in companies, financial products, investments, and commodities, offering ownership rights in the value of these assets. Security Token Offerings (STOs) combine the technology of blockchain with the requirements of regulated securities markets to support liquidity of assets and wider availability of finance. STOs are typically the issuance of digital tokens in a blockchain environment in the form of regulated securities.
What is a blockchain
A blockchain is a shared, immutable ledger that facilitates the process of recording transactions and tracking assets in a business network. An asset can be tangible (a house, car, cash, land) or intangible (intellectual property, patents, copyrights, branding). Virtually anything of value can be tracked and traded on a blockchain network, reducing risk, increasing transparency and cutting costs for all involved.
Every business is reliant on information, and blockchain is ideal for delivering that information because it provides immediate, shared and completely transparent information stored on an immutable ledger that can be accessed only by permissioned network members. A blockchain network can track orders, payments, accounts, production and much more. And because members share a single view of the truth, you can see all details of a transaction end to end.
What is a token?
A crypto token is a virtual currency token or a denomination of a cryptocurrency. It represents a tradable asset or utility that resides on its own blockchain and allows the holder to use it for investment or economic purposes. It is a digital asset, and is essentially a computer program with built-in economic properties such as token supply, emission schedule and other such rules.
What is a token standard?
A token standard is basically a template for creating tokens – it sets out the characteristics and functions that all tokens using the standard share. This includes the rules that a smart contract must follow to be operational on the blockchain. These rules guide the design, development, behavior, and operation on a given blockchain protocol. The framework behind the creation and issuance of token types is different for each network, and so there must be guidelines for how these tokens are created and function. Instead of having to write the entire code for a new token from scratch, token issuers can copy an open-source template and make adjustments to suit their business case. The format name of a token standard is dependent on the Blockchain they are built on.
4 Ethereum Token Standards You Should Know
Ethereum Request for Comment (ERC) is essentially a set of technical documents containing guidelines on developing a smart contract. They define a specific set of functions for each token type and facilitate the interaction between applications and smart contracts.
What is the ERC-20 token standard?
These tokens rose to fame during the ICO frenzy of 2017 allowing thousands of entrepreneurs to spin up tokens in minutes. However, it came with an obvious weakness – the tokens are permissionless, which means that one can send them to any wallet anywhere in the world, without having to ask anyone for permission. Hence, the ERC-20 does not make the grade for stocks, bonds, and other securities where brokers are required to obtain personal details, like ID and Proof of Address, in compliance with AML restrictions.
What is the ERC-1404 token standard?
It is purpose-built for complying with AML regulations. In fact, it takes compliance one step further by baking it into the token. Thanks to its unique whitelisting function, an ERC-1404 token makes it impossible for someone that has not verified themselves to send or receive the token.
What is the ERC-721 token standard?
A data standard for creating non fungible tokens, meaning each token is unique and cannot be divided or directly exchanged for another ERC-721 token. The ERC-721 standard allows creators to issue unique crypto assets like NFTs via smart contracts.
What is the ERC-1155 token standard?
A token standard that enables the efficient transfer of fungible and non-fungible tokens in a single transaction. The distinctive feature of ERC1155 is that it uses a single smart contract to represent multiple tokens at once.
We Know Tokens
INX is unique in the role it plays within the security token and crypto ecosystem. In August 2020 INX was the first SEC registered security token to IPO on the blockchain. In July 2021 the INX Token was listed on the secondary market, making it available for trading to the general public.
Today INX ONE is the world’s first fully regulated platform, merging investing and trading in security tokens, cryptocurrencies, and capital raise offerings all in ONE place. INX ONE is shaping a new investors community by enabling access to multiple asset classes in a single platform.
The INX Digital Company inc. January 25, 2023
The INX Digital Company inc. is an expert in the field of finance, crypto and digital securities.
“INX” refers to The INX Digital Company, Inc., a holding company incorporated in Canada, and its affiliates. INX Limited, a Gibraltar incorporated company, offers technology and services to all its affiliated companies. Cryptocurrencies and related services are offered by INX Digital, Inc., a Delaware corporation headquartered in Gaithersburg, MD and registered with the Financial Crimes Enforcement Network and certain states as a money transmitter (NMLS 2094630). Security tokens and related services are offered by INX Securities, LLC, a broker-dealer/ATS registered with the SEC and member of FINRA/SIPC. Securities transactions, products, and services are offered by INX Securities, LLC, member FINRA and SIPC. For information relating to INX Securities, LLC, please visit Security Tokens | Broker Check | Customer Relationship Summary. INX relies on information from various sources believed to be reliable, including from customers and third parties, but cannot guarantee its accuracy or completeness. None of INX affiliated companies provide legal, tax, or investment advice. Cryptocurrency and security token holdings are speculative in nature and involve substantial risk, including the risk of complete loss. Past performance has no bearing on future performance and there can be no assurance that any cryptocurrency, security token, coin, or any other crypto asset will be viable, liquid, or solvent. Nothing in this or any INX communication is intended to imply that any of the digital assets or related services are low-risk or risk-free and you should conduct your own due diligence before investing.