Tokenized Securities Are Coming to EOS

Developer of trading systems Ed Silantyev has just announced his new project: the Financial Securities Protocol (FSP), the first of its kind on EOS.

Read Exclusive interview with Ed Silantyev here.

The purpose driving the creation of FSP is “asset self-sovereignty” by baking in compliance requirements into the asset itself thus making tokenized securities possible on EOS.

Coupled with FSP will be the Financial Securities Protocol Proposals: a platform for discussion on improvements to the protocol as made by the community.

The FSP aims to be the “blueprint for the Financial System 3.0.” Lightening-fast trading and efficient primary markets, along with our current largely cashless economy, ushered forth the Financial System 2.0. Now, as Silantyev writes, blockchain technology will bring in the 3.0 installment of financialization through what he calls asset self-sovereignty.

The EOS blockchain was chosen due to “consistently being the most active blockchain in Fall 2018.” FSP will build its core modules using EOS in order to “realize high-throughput scalable financial applications.”

FSP can best be broken up into modules. They are currently:

  • which defines the basic functionality of a financial asset.
  • fsp.regulator acting as the gatekeeper of the protocol, being able to block the transfer of securities not compliant.
  • providing a point of liquidity.
  • fsp.registry or the entry point into the network, responsible for KYC/AML checks.
  • fsp.communication is the “gossip module” and for essential communications.

fsp diagram

The importance of security tokens cannot be overstated. Now that EOS has its first security token protocol in development, its blockchain can join the growing sector that aims to tokenize traditional assets, ownership, equity, debts, and many other financial instruments currently a part of the broad category of “securities.”

Some analysts can even predict that the security token offering sector could exceed $200 billion in market capitalization by 2019. And still, there are countless platforms and broker-dealers who are paving the way to make this thriving new crypto sector a staple in the greater financial market.

The Financial Securities Protocol is a step towards this vision: towards the “Financial System 3.0.” For more information on tokenized securities, read our comprehensive guide on the exciting new digital asset category here.