EOS-Based Security Tokens Made Possible with New Protocol

In the race to unroll security tokens, the EOS network gained a chance to compete by creating a new type of digital asset to represent traditional financial securities.

EOS-based security tokens can be made possible with a new protocol, allowing for the creation of a digital asset to represent fully legal traditional securities. As recently announced by Ed Sylantyev, the Financial Securities Protocol on EOS will lead to the faster, cheaper and more secure representation of financial instruments.

The EOS network has already managed to compete with Ethereum when it comes to building distributed apps, or dApps. However, for tokenized securities, Ethereum is still the go-to solution, as the network is better-known.

In theory, any platform that allows for the creation of tokens is potentially useful to the issuers of financial securities. In practice, however, some platforms are too unknown, or illiquid. Platforms like NEO, QTUM, Stellar, WAVES and others have attracted some token creation, but not on a mass scale like Ethereum.

Security tokens are viewed as the next trend in digital assets in 2019, planning for significant expansion. For now, only limited applications of tokenizing real estate or physical artworks have been achieved. However, debt markets, stocks and other financial instruments may be suitable for tokenization.

The EOS network is currently a leader of daily transactions, reporting as many as 44 million transactions per day. It was for this reason that EOS was chosen in the FSP project. However, it is uncertain if all those transactions, as Blocktivity reports, are organic, or there is another reason for the high transaction count.

The EOS network has yet another advantage - the established technology for voting. Some forms of traditional financial assets also may involve a form of voting.

The proposed EOS security tokens will also have to compete with the newly proposed Ethereum standard, ERC-1400. Until recently, most tokens used the ERC-20 standard for fungible tokens. The new protocol for security tokens will include additional features to better reflect traditional assets in digital form.

Reading now