The Ethereum community has recently approved a new standard for compliant tokenization of real-world assets, known as ERC-3643. This proposal has undergone formal review, discussion, and agreement within the Ethereum community, similar to the process used to establish the ERC-20 and other popular standards in the past.
ERC-3643 is an alphanumeric code that facilitates several features such as managing RWAs, facilitating payment systems, and running loyalty programs. It verifies users’ eligibility for a token via a self-sovereign identity (SSI) framework, providing anonymous yet verifiable credentials. The approved standard, proposed in 2021 and built on top of ERC-20, incorporates two distinct permission layers to enhance security and compliance.
The first layer focuses on the identity and eligibility of the transaction receiver, utilizing ERC-734/-735 standards to verify if the necessary claims are present on the identity and are authenticated by trusted claim issuers. The second layer of tokenization implements global restrictions on the token itself, ensuring controlled and regulated token circulation.
Asset tokenization converts the value of an asset into a digital token on a blockchain or distributed ledger, increasing liquidity, speeding up settlements, and providing transparency and accessibility to various markets. It can be used for fractional trading of real estate, art, financial assets, and intellectual property.
Looking ahead, JPMorgan analysts have predicted a potential network upgrade for Ethereum could have a bullish effect on the crypto market in 2024. They believe that Ethereum will outperform Bitcoin and other cryptocurrencies and gain market share. The current support levels for the ETH coin price are at $1,783 and $1,567. The analysts also caution about the overall crypto markets but are optimistic about the forthcoming upgrade known as “Protodanksharding”, which could reduce transaction costs and increase the number of transactions per second. However, they also highlight the existence of two major resistance levels at $2398 and $2956, where the bears may be active.
In conclusion, the approval of ERC-3643 as a standard for tokenization of assets has significant potential for the Ethereum ecosystem. Additionally, with the optimistic prediction by JPMorgan analysts for Ethereum’s performance in 2024, the crypto community is eagerly anticipating the potential developments and opportunities in the Ethereum network.
It’s important to note that the views and opinions stated by the author and any individuals mentioned in this article are for informational purposes only and do not constitute financial, investment, or other advice. Investing in or trading in stocks, cryptos, or related indexes comes with a risk of financial loss.
The article was written by Adarsh Singh, a connoisseur of DeFi and blockchain technologies with a strong background in finance, including an MBA from a prestigious business school. Singh is dedicated to uncovering hidden gems in the crypto and NFT space and strives to make decentralized digital assets accessible to the masses.