Community Forex Questions
What is ERC-884, and how does it differ from other Ethereum token standards like ERC-20?
ERC-884 is an Ethereum token standard designed specifically for digitising company shares in compliance with Delaware corporate law. Unlike ERC-20 (a general-purpose fungible token standard), ERC-884 incorporates legal and regulatory requirements for equity ownership, including:
Transfer Restrictions – ERC-884 enforces KYC/AML checks by allowing only whitelisted addresses to hold or trade tokens, unlike ERC-20, which permits permissionless transfers.
Shareholder Rights – It includes functions for dividend distributions, voting, and corporate actions, which ERC-20 lacks.
Compliance with Delaware Law – ERC-884 aligns with the Delaware General Corporation Law (DGCL), enabling legally recognised digital share issuance.
Non-Fungibility – While ERC-20 tokens are interchangeable, ERC-884 tokens represent unique ownership stakes (like traditional shares), making them semi-fungible.
Key Differences from ERC-20
ERC-20: Open, permissionless transfers; no built-in compliance.
ERC-884: Restricted transfers, KYC integration, and legal enforceability.
ERC-20: Used for utility tokens (e.g., cryptocurrencies).
ERC-884: Designed strictly for equity tokenisation.
ERC-884 bridges blockchain efficiency with regulatory compliance, but has seen limited adoption due to complexity and competition from hybrid standards like ERC-1400. It remains a niche solution for legally compliant stock tokenisation.
Transfer Restrictions – ERC-884 enforces KYC/AML checks by allowing only whitelisted addresses to hold or trade tokens, unlike ERC-20, which permits permissionless transfers.
Shareholder Rights – It includes functions for dividend distributions, voting, and corporate actions, which ERC-20 lacks.
Compliance with Delaware Law – ERC-884 aligns with the Delaware General Corporation Law (DGCL), enabling legally recognised digital share issuance.
Non-Fungibility – While ERC-20 tokens are interchangeable, ERC-884 tokens represent unique ownership stakes (like traditional shares), making them semi-fungible.
Key Differences from ERC-20
ERC-20: Open, permissionless transfers; no built-in compliance.
ERC-884: Restricted transfers, KYC integration, and legal enforceability.
ERC-20: Used for utility tokens (e.g., cryptocurrencies).
ERC-884: Designed strictly for equity tokenisation.
ERC-884 bridges blockchain efficiency with regulatory compliance, but has seen limited adoption due to complexity and competition from hybrid standards like ERC-1400. It remains a niche solution for legally compliant stock tokenisation.
ERC-884 is an Ethereum token standard designed for shareholder governance in Delaware corporations, enabling compliant tokenised equity on the blockchain. Unlike ERC-20 (a general-purpose fungible token standard for payments and utility tokens), ERC-884 ensures legal compliance with Delaware corporate law by embedding real-world shareholder rights into the token. Key differences include:
Legal Compliance – ERC-884 tokens represent actual equity shares, requiring identity verification (KYC/AML) to prevent unauthorised transfers, unlike ERC-20’s permissionless nature.
Transfer Restrictions – ERC-884 enforces rules (e.g., whitelisted addresses) to comply with securities laws, while ERC-20 allows free transferability.
Corporate Features – It includes voting rights and dividend distributions, making it suitable for legally recognised stock issuance, whereas ERC-20 lacks such governance mechanisms.
In contrast, ERC-20 is widely used for decentralised finance (DeFi) and ICOs but doesn’t address regulatory requirements for equity tokens. ERC-884 bridges blockchain efficiency with traditional corporate governance.
Legal Compliance – ERC-884 tokens represent actual equity shares, requiring identity verification (KYC/AML) to prevent unauthorised transfers, unlike ERC-20’s permissionless nature.
Transfer Restrictions – ERC-884 enforces rules (e.g., whitelisted addresses) to comply with securities laws, while ERC-20 allows free transferability.
Corporate Features – It includes voting rights and dividend distributions, making it suitable for legally recognised stock issuance, whereas ERC-20 lacks such governance mechanisms.
In contrast, ERC-20 is widely used for decentralised finance (DeFi) and ICOs but doesn’t address regulatory requirements for equity tokens. ERC-884 bridges blockchain efficiency with traditional corporate governance.
Apr 24, 2025 02:36