Token Standards

What are Standards?

Standards are a way of keeping interoperability across implementations so that smart contracts and decentralized applications remain composable. When a token satisfies all functionality set by a token-standard, it is said to be an ERC-N (N being the numeric identifier for the standard) token.

MTE (micobo Tokenization Engine) uses two important tokens standards, namely ERC-20 and ERC-1400.

ERC 20

The ERC-20 introduces a standard for Fungible Tokens, in other words, they have a property that makes each Token be exactly the same (in type and value) as another Token. For example, an ERC-20 Token acts just like the ETH, meaning that 1 Token is and will always be equal to all the other Tokens.

Basic functionalities that this standard provides are:

  • Transfer tokens from one account to another.
  • Get the current token balance of an account.
  • Get the total supply of the token available on the network.
  • Approve whether an amount of token from an account can be spent by a third-party account.

ERC 1400

ERC-1400 is a token standard developed by Polymath. As the use of smart contracts as security tokens accelerated, the requirements of having more than just technical operations also increased. Moving the issuance, trading and lifecycle events of a security onto a public ledger requires having a standard way of modelling securities, their ownership and their properties on-chain (EIP-1411).

A few additional functionalities revolving around securities that this standard includes are:

  • Perform forced transfer for legal action or fund recovery.
  • Attach metadata to a subset of a token holder's balance such as special shareholder rights or data for transfer restrictions.
  • Modify metadata at time of transfer based on off-chain data, on-chain data and the parameters of the transfer.
  • Require signed data to be passed into a transfer transaction in order to validate it on-chain.

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