New Ethereum standard aims to set baseline for real-world asset tokenization

4 hours ago

A conjugation of Web3 companies has introduced a caller Ethereum token modular designed to streamline compliance and trim fragmentation successful the increasing real-world plus (RWA) sector.

According to an announcement sent to Cointelegraph, the standard, ERC-7943, creates a minimal, modular interface designed to enactment crossed Ethereum layer-2s and Ethereum Virtual Machine (EVM) chains, portion remaining agnostic to implementation and vendor-specific infrastructure. This means it tin enactment successful immoderate setup and isn’t locked into immoderate circumstantial company’s tools.

Dario Lo Buglio, the co-founder of Brickken and the writer of the Ethereum Improvement Proposal (EIP)-7943, told Cointelegraph that the caller modular acts arsenic a “universal layer” that sits connected apical of immoderate token type. This allows developers and institutions to debar having to usage wrappers and customized bridges portion integrating tokenized assets into apps.

ERC-7943 is backed by a conjugation of Web3 and fintech firms, including Bit2Me, Brickken, Compellio, Dekalabs, DigiShares, Hacken, Forte Protocol, FullyTokenized, RealEstate.Exchange, Stobox and Zoth.

Responding to a “perfect storm” of organization interest

According to Lo Buglio, EIP-7943 is simply a nonstop effect to developer vexation and a “perfect tempest of organization interest.”

Data from the RWA tracker RWA.xyz shows that the full worth of tokenized RWAs onchain has reached $28.44 billion, up astir 6% successful the past 30 days. Meanwhile, stablecoins’ full stablecoin worth and full plus holders are up astir 7% and 9%, respectively.

The maturation of RWAs shows that institutions are presently adopting RWAs astatine scale, with issuers competing for marketplace share. Lo Buglio said this highlights the request for a caller token modular that addresses the needs of developers and fiscal institutions alike.

“Financial institutions privation programmable controls that lucifer their compliance frameworks. Developers, connected the different hand, are stuck rewriting customized logic for each RWA token,” Lo Buglio told Cointelegraph. “We needed a communal foundation.”

Lo Buglio told Cointelegraph that the modular entered the reappraisal signifier of the EIP process and has already received feedback from compliance professionals and different token modular authors.

“The EIP inactive stands connected the reappraisal stage, which is wherever the main feedback volition beryllium projected and incorporated.”

Tackling fragmentation and enabling composability

Earlier efforts to standardize RWA tokenization connected Ethereum see ERC-1400 and ERC-3643. ERC-1400 introduced a hybrid model blending features of fungible and non-fungible tokens (NFTs), with built-in compliance tools.

ERC-3643 focused connected regulated assets similar securities, integrating onchain individuality and support layers to enforce Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements.

Lo Buglio said ERC-1400 aims to absorption connected separating logic from retention and said that ERC-3643 is beardown for securities, but it’s tightly coupled to its ain individuality and permissioning stack. Unlike these solutions, helium said, it differentiates itself by being a minimal, implementation-agnostic interface.

“EIP-7943 defines lone what indispensable beryllium — not however it’s built — truthful immoderate task oregon protocol tin slot it into their stack without friction,” Lo Buglio told Cointelegraph.

“Its superior extremity is to lick the occupation of manufacture fragmentation by providing a single, standardized acceptable of functions for compliance.”