What is ERC 3643? The Standard Set to Boost Tokenization!

The tokenization of real-world assets on the blockchain has been storming the Web3 ecosystem for several months and is expected to reach new heights with the advent of the ERC 3643 standard on Ethereum. This new standard will facilitate the creation of tokens associated with real-world assets. Here's everything you need to know in this article.

What is ERC-3643?

The result of many years of work by Ethereum developers, ERC-3643 is a standard for the creation of real-world asset (RWA) tokens on the Ethereum blockchain and all other compatible networks.

More specifically, ERC-3643 is an open-source suite of smart contracts that enables programming of the main actions related to real-world asset tokens to facilitate the development of future decentralized applications.

The goal of developing this standard is to eliminate or break down traditional barriers, particularly between the real world and blockchains, by simplifying legal aspects and ensuring necessary compliance, security, and transparency.

🔗 What is real-world asset (RWA) tokenization?

Key Elements of ERC-3643

• Representation: ERC-3643 tokens represent any real-world assets and contain all important data on asset ownership, legal details, and compliance.

• Compliance: ERC-3643 ensures compliance with local regulations and addresses fundamental issues raised by the tokenization of real-world assets, adhering to jurisdictional rules and providing clear guidelines on asset tokenization, thus avoiding legal breaches.

• Interoperability: A key feature of ERC-3643 tokens is their integration with decentralized finance (DeFi) protocols, enhancing their use cases in the blockchain ecosystem.

• Fractionalization: ERC-3643 supports fractional ownership, allowing physical assets to be divided into multiple elements, thereby making the asset more liquid and accessible to everyone.

• Scalability: The design of ERC-3643 makes tokens scalable, avoiding the need for developers to migrate to another smart contract if necessary. This allows the system to be flexible enough to evolve with the dynamic Web3 environment.

Applications of ERC-3643

As you can see, ERC-3643 enables the tokenization of real-world assets. This concerns many different use cases, some of which are already represented by major projects in the Web3 ecosystem.

Real Estate

By dividing real estate properties into tokens, investors can more easily gain exposure to the real estate market and receive a portion of the rents each month. ERC-3643 drastically facilitates this process by framing legal aspects to reassure investors.

Art and Collectibles

This standard facilitates the tokenization of artworks by fractionalizing ownership, increasing liquidity and accessibility in an art market known to be reserved for large wallets.

Shares of Companies or Startups

Offering company shares in the form of tokens for fundraising is one of the first use cases to have emerged. The implementation of the ERC-3643 standard brings a compliance dimension that should reassure companies interested in private fundraising on the blockchain.

The Case of Dowgo

The renewable energy market is booming. While investment in this market is traditionally reserved for insiders, with an entry ticket of around 100,000 euros, it will now be possible to invest from 1 euro without geographical restrictions thanks to Dowgo.

🔗 Discover our full article to understand everything about Dowgo

Conclusion

ERC-3643 represents an important step in the evolution of asset tokenization. While this trend was already developing, the implementation of this standard brings numerous advantages such as embedded compliance, increased liquidity, enhanced transparency, and improved accessibility. Moreover, it promotes interoperability and compatibility of real-world asset tokens with other protocols and applications on Ethereum and compatible networks.