| Horacio Lampe
*(Real World Asset Tokenization) The evolution of real-world asset (RWA) tokenization has given rise to innovative standards, and among them stands out ERC3643, also known as T-REX (Token for Regulated EXchanges). This standard, analyzed in detail in the “Whitepaper ERC3643 The T-REXprotocol”, has been developed to address the issuance and management of authorized tokens in a manner compatible with current legislation, marking a milestone in regulatory compliance in the blockchain space.
The distinctive approach of ERC3643 lies in its “Conformity by Design” principle, where tokens can only be held by investors who rigorously comply with all regulatory requirements. This standard introduces key elements, such as the on-chain identity system (ONCHAINID) and the Eligibility Verification System (EVS), supported by the Modular Compliance (MC) smart contract. These elements allow issuers to maintain control over transfers and ensure compliance on the blockchain, providing secure and compliant transactions.
The ONCHAINID process is a digital identification mechanism on the blockchain that functions as a decentralized validation system, which focuses on establishing a regulated and secure environment for token transactions.
Each user has a unique identity, verified and registered on the blockchain. Smart contracts play a central role in the operation of the ERC3643. These self-executing programs on the blockchain manage, verify and execute agreements automatically, eliminating the need for intermediaries. They are essential for asset tokenization as they ensure efficient and secure execution of transactions, ensuring user privacy and security while complying with crucial regulations such as Know Your Customer (KYC) and Anti-Money Laundering (AML). This process paves the way for a regulated and transparent environment in the security tokens market, representing a significant innovation in financial markets. It facilitates identity management and eligibility verifications, consolidating itself as the backbone of asset tokenization.
In summary, the ERC3643 (T-REX) standard represents a new era in the tokenization of regulated assets, introducing innovative practices to ensure regulatory compliance on the blockchain. This advancement not only redefines the way tokens are issued and managed, but also sets a precedent for security and transparency in blockchain-based financial markets. Compliance by design and efficient integration with the ERC-20 standard confirm T-REX as a fundamental pillar in the evolution of tokenization.
Practical Example of Tokenization of a Property
To illustrate the practical application of the ERC3643 standard in real estate financing, let's consider the hypothetical case of tokenization of a residential property. In this scenario, the T-REX offers a solid framework for the issuance and management of real estate-backed security tokens.
- Token Issuance: Let's imagine that a company wants to finance the acquisition of a property by issuing tokens. Using the ERC3643 standard, the company can create security tokens that represent fractions of ownership. These tokens are issued on the blockchain, ensuring the transparency and traceability of each tokenized asset.
- Identity and Eligibility Verification: The T-REX ONCHAINID process is used to manage the identity of investors interested in acquiring these tokens. Each potential investor must go through a rigorous KYC and AML process, verifying their identity and eligibility to participate in transactions of this type.
- Smart Contract Compliance: T-REX smart contracts come into play to ensure regulatory compliance. These contracts automatically run verification of each investor's identity and eligibility before allowing any transaction. In addition, they establish the rules for the maintenance of the property and the distribution of income.
- Transparency and Liquidity: The issued tokens are traded on platforms compatible with the ERC3643 standard. Tokenized ownership offers transparency and liquidity, as investors can buy and sell their tokens on a secondary market, facilitating efficient entry and exit of investments.
- Profit Distribution:As the property generates income, the returns are automatically distributed to investors through smart contracts. This simplifies financial management and ensures that profits are distributed fairly among token holders.
- Continuous Compliance: Throughout the lifecycle of the tokenized asset, the T-REX ensures that transactions continually comply with evolving regulations. Any change in ownership or investors is transparently recorded on the blockchain, ensuring regulatory compliance at all times.
