What is an ERC-884 Token?
ERC-884 is an Ethereum token standard designed to allow Delaware corporations to issue and manage shares as digital tokens on the blockchain.
This standard ensures compliance with Delaware corporate laws, enabling businesses to store shareholder identities, regulate token transfers, and maintain transparent ownership records.
By leveraging blockchain technology, ERC-884 enhances efficiency, security, and legal adherence in equity management.
Key Features of ERC-884 Token Standard
Verified Shareholders: Token holders must pass identity verification and be whitelisted to comply with regulations, ensuring a legally recognized shareholder registry.
Regulated Transfers: Only eligible investors can trade ERC-884 tokens, with whitelisting mandatory for all owners to meet securities laws.
Transparent Ownership Records: The blockchain securely logs ownership changes, dividends, and stock splits, simplifying legal compliance under Delaware corporate law.
Lost Key Recovery: If private keys are lost, shareholders can revoke access and reissue tokens to a new address, preventing asset loss.
Off-Chain KYC Compliance: Requires off-chain identity verification, ensuring regulatory alignment while maintaining privacy through hashed shareholder data.
Advantages & Challenges of ERC-884
Advantages of Using ERC-884 Tokens
Legal Compliance: Aligns with Delaware law, simplifying regulatory processes and ensuring companies meet legal requirements for digital stock issuance.
Cost and Time Efficiency: Reduces the costs and time involved in traditional share issuance by automating processes and eliminating excessive paperwork.
Enhanced Security: Uses blockchain's decentralized record-keeping to protect shareholder data and prevent fraud or unauthorized alterations.
Challenges of Using ERC-884
Regulatory Uncertainty: Adoption outside Delaware may face legal complications, as different jurisdictions have varying regulations on tokenized shares.
Scalability and Costs: Ethereum’s network congestion and transaction fees may impact the efficiency of ERC-884 token management.
Adoption Barriers: Businesses may be slow to adopt ERC-884 due to the need for regulatory clarity and technological integration within existing corporate frameworks.
