Ethereum Network Endorses ERC-3643 Standard; Revolutionizes Asset Tokenization
Summary:
The ERC-3643 Ethereum Improvement Proposal (EIP) has gained official endorsement from the Ethereum network. Serving as a standard model for legal tokenization of real-world assets (RWAs), ERC-3643 employs a self-sovereign identity framework to verify users' token eligibility, providing anonymous yet provable credentials. The standard, building upon the ERC-20 system, features two distinct authorization layers to bolster security and compliance. Asset tokenization, a promising trend in finance, is being explored by major firms including JPMorgan, Goldman Sachs, and Société Générale. The total market value for RWAs touched $342 billion in September.
The Ethereum network has officially endorsed the ERC-3643 Ethereum Improvement Proposal (EIP), testimony of its acceptance as a standard model for legal tokenization of tangible world assets (RWAs). In an announcement made on December 15, it was stated that the proposal has reached its final stage, indicating that it underwent comprehensive review, discussion, and approval from the Ethereum network community, making it parallel to how ERC-20 and other renowned standards were previously accepted.
ERC-3643 is a stipulated model for securities tokenization, RWAs, payment systems, and customer loyalty programs. It works by confirming users' qualification for a token via a self-sovereign identity (SSI) framework. This system offers anonymous yet provable credentials, according to the group behind the proposal. The accepted standard, initially proposed in 2021, is founded on the ERC-20 system and includes two distinct authorization layers to boost security and compliance. Layer one focuses on the identification and eligibility of the transaction receiver by using ERC 734/735 standards to confirm the presence of necessary claims on the identity and their authentication by trusted claim issuers. The other layer sets worldwide restrictions on the token, such as token volume per day and maximum number of token holders, to regulate and control token movement.
Asset tokenization is a process of turning the physical or digital asset's value into a digital token on a blockchain or decentralized ledger. Assumed advantages of asset tokenization involve enhanced liquidity, speedier settlements, transparency, and easier accessibility to different markets. Real-world uses could comprise fractional trading of real estate, art, financial assets, and intellectual property. Roland Berger, a management consulting firm, predicts that the market value for asset tokenization will increase to $10 trillion by 2030, a considerable increment from the existing value of approximately $300 billion.
Asset tokenization is being viewed by a diverse array of conventional and crypto-specialized firms as a significant financial trend. Prominent companies delving into the technology embrace JPMorgan, Goldman Sachs, and Société Générale. Figures from VanEck Research reveal the total market value for RWAs touched $342 billion in September regardless of the obstacles faced by the crypto sector.
Published At
12/15/2023 7:18:37 PM
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