What Is ERC-884?
Each ERC-884 token defines a specific share in a Delaware company, according to David Sag’s standard.
ERC-884 issuers, on the other hand, must establish an off-chain private database to meet with securities legislation.
Blockchain Revolutionizing Share Management
Thanks to the new laws, companies in the US state of Delaware can now utilize blockchain technology to manage share registrations.
ERC-884 aims to use it where each token will be designated as a share of a corporation formed in Delaware.
ERC 884 additionally includes the following to comply with regulations:
- Token holders’ identities must be verified, and they must be whitelisted.
- There is no separate crowd sale contract to secure token owner whitelisting rather the ERC-884 requires whitelisting for all token owners. Although enabling crowd-sale contracts can utilize the whitelist to verify eligibility, the whitelist is still an essential element of the token contract.
- The corporation can compile a list of shareholders. According to regulatory regulations, it must allow the corporation to create the shareholder list required by Sections 219 and 220 of The Act. Also, information recording is required by regulators and record share transfers.
- Tokens can only have their total value, no partial value. Each ERC-884 coin must reflect a unique uncountable share that has been fully paid for. Data on partially paid shares does not need to be tracked. Likewise, an ERC-884 token does not need to be linked to a certain amount of shares. Knowing that a shareholder holds a certain amount of it is enough. Individually numbered shares are no longer essential in this circumstance.
- Shareholders who have misplaced their private keys or tokens must transfer them to a new address. A system must be implemented to enable shareholders who have misplaced their private key or lost access to their tokens to have their address revoked and their tokens re-issued to a new address.
- Implementing ERC-884 necessitates the use of an off-chain database to meet certain “Know Your Customer” (KYC) criteria. The implementer should be able to extract the identity and physical address of any ETH address, hash that information, and match the generated hash to the hash contained in the contract using the hash function, therefore ensuring the cohesion of their data.
- Because ERC-884 tokens are ERC-20 compatible, they may be exchanged on any cryptocurrency exchange that supports the trading of ERC-20 tokens, allowing the firm to avoid the use of a traditional mechanism.