The Ethereum community has ratified the ERC-3643 Ethereum Improvement Proposal (EIP), marking it as an established standard for the compliant tokenization of real-world assets (RWAs).
As of Dec. 15, the proposal has reached its definitive status, indicating that it has undergone thorough review and consensus within the Ethereum community. This process mirrors the development of other well-known standards like ERC-20.
ERC-3643, a standard proposed in 2021, is designed for various applications, including securities tokenization, RWAs, payment systems, and loyalty programs. It leverages a self-sovereign identity (SSI) framework to validate users’ eligibility for a token, offering anonymous yet verifiable credentials, according to the proposal’s backers.
This newly approved standard builds upon ERC-20 and introduces two critical permission layers to bolster security and compliance. The first layer scrutinizes the identity and eligibility of the transaction recipient, using ERC-734/-735 standards to confirm the presence and authentication of necessary claims by trusted issuers. The second layer imposes global restrictions on the token, such as limits on daily token volume and the maximum number of token holders, ensuring regulated circulation.
Tokenizing assets involves transforming the value of physical or digital assets into blockchain-based digital tokens. This process promises enhanced liquidity, swifter settlements, and greater transparency, opening up market access to a wider audience. Asset tokenization finds practical use in areas like real estate, art, finance, and intellectual property.