Representation Models for Real World Tokenized Assets

When tokenizing a real world asset through the use of distributed digital assets, it is imperative to establish standards based on the unique characteristics of the asset. The assets fundamental properties should be carefully evaluated before choosing the appropriate token standard.

Technical Standards for Real World Assets Tokenization (RWAs)

ERC-20 standard
ERC-721 standard
ERC-3643 standard
ERC-1155 standard

ERC-20 standard : The ERC-20 standard is a set of rules for creating tokens on the Ethereum blockchain, ensuring compatibility with wallets, exchanges, and smart contracts.

ERC-20 tokens are fungible, meaning each token is identical and can be used interchangeably with any other token of the same type. These tokens are commonly used for creating digital representations of assets or for creating utility tokens that can be used to access a particular service or platform.

Key features of ERC-20 tokens include the ability to transfer tokens between addresses(value exchange between users), check the balance of tokens in an account, and approve the transfer of tokens by another account. These functions are implemented through a series of smart contract functions that comply with the ERC-20 standard.

ERC-721 standard: The ERC-721 standard is a set of rules for creating non-fungible tokens (NFTs) on the Ethereum blockchain. NFTs are unique tokens that can represent ownership of a specific asset or item, such as digital art, collectibles, or in-game items.

ERC-721 tokens are different from ERC-20 tokens in that each token is unique and cannot be exchanged on a one-to-one basis with other tokens of the same type. This uniqueness allows for the creation of digital scarcity, where each token has its own value and cannot be replicated or divided into smaller units.

Key features of ERC-721 tokens include the ability to transfer ownership of a specific token to another address, as well as the ability to query the ownership and attributes of a specific token. These functions are implemented through a series of smart contract functions that comply with the ERC-721 standard.

ERC-1155 Standard: The ERC-1155 standard is a set of rules for creating multi-token contracts on the Ethereum blockchain. Unlike ERC-20 and ERC-721, ERC-1155 supports both fungible and non-fungible tokens within a single contract. This flexibility allows for a more efficient and versatile token system, useful for applications like gaming, where both unique items and standardized currencies are needed. ERC-1155 tokens simplify the management of various tokens and reduce the cost and complexity of deploying multiple contracts.

Key features of ERC-1155 tokens include the ability to perform batch transfers, allowing multiple token types to be transferred in a single transaction, reducing costs and increasing efficiency. The standard enables unified storage, allowing multiple token types to be managed within a single contract. ERC-1155 supports efficient transfers by optimizing gas costs through batch transfers and unified storage. It also includes enhanced metadata capabilities for flexible and detailed descriptions and attributes for both fungible and non-fungible tokens. Moreover, ERC-1155 tokens are designed for interoperability, ensuring compatibility with existing standards and decentralized applications, facilitating seamless integration across platforms.

These functions are implemented through smart contract functions that comply with the ERC-1155 standard, enabling the creation of versatile and efficient multi-token systems on the Ethereum blockchain.

ERC-3643 Standard: The ERC-3643 standard is a set of rules for creating regulated security tokens on the Ethereum blockchain. Security tokens are digital assets that represent ownership or a stake in a real-world asset, such as stocks, bonds, or real estate.

ERC-3643 tokens are different from other token standards like ERC-20 or ERC-721 in that they are specifically designed to comply with regulatory requirements for securities. This compliance includes features for identity verification, whitelisting of investors, and transfer restrictions based on regulatory rules.

Key features of ERC-3643 tokens include the ability to enforce regulatory compliance directly within the token's smart contract. This includes the ability to restrict token transfers to only approved and verified addresses, ensuring that only eligible investors can hold or trade the tokens. Additionally, ERC-3643 tokens can implement mechanisms for handling regulatory reporting and auditing requirements.

These functions are implemented through a series of smart contract functions that comply with the ERC-3643 standard, enabling the creation of security tokens that can be legally and compliantly issued and traded on the blockchain.