The early security token industry lacked standardization, so every security token was built differently. This created unnecessary friction where every market participant — especially custodians and exchanges — needed to perform not only business due diligence on every token they supported, but also technical due diligence.
To tackle this problem, Polymath proposed a unified standard for security tokens on Ethereum, with the goal of ensuring a token’s code met specific requirements and organizations could integrate it without costly and time-consuming technical due diligence. This standard, ERC 1400, is a collection of other standards integral to creating a security token and has since been adopted by organizations including ConsenSys and BNP Paribas.
ERC 1400 was built on Polymath’s earlier ST20 protocol and Polymath Token Studio creates tokens using the standard. It also laid the foundation for Polymesh.
Learn more about ERC 1400.