Category: Blockchain

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Blockchain Financial Services Healthcare

Q&A with Ahmed Yassin of Avrio Invest

I recently sat down with Ahmed Yassin, founder of Saudi Arabian blockchain investment firm Avrio Invest. Blockchain in the Kingdom of Saudi Arabia is a relatively new phenomenon, but something which Assin believes will help the Gulf state modernize rapidly in the face of a changing global economy. Initially set up as a real estate investment fund, Avrio Invest together with Espeo Software now has ambitious plans to bring the significant cost-cutting aspects to the healthcare and government sectors.

Thanks for taking the time to talk to me today. What sparked your interest in blockchain initially and especially in real estate tokenization?

[There was a] real estate market collapse in Saudi Arabia in 2017 and then that’s when I came up with the idea of tokenizing real estate through the blockchain because of the benefit from creating a real estate fund through the blockchain. First of all, it opens the doors to foreign investment, which means investors don’t have to open a company in Saudi Arabia to own real estate and to develop real estate. We will obviously take that burden as Avrio Invest.

The difference between a blockchain fund versus a banking real estate fund is that there’s a minimum buy-in when you enter a real estate fund through a bank that could be $100,000 and it could be a $1 million to launch. With blockchain it can be as much or as little — it can be $100. So this opens the door to everyone. You know in Saudi Arabia you have to understand it’s a population of 31 million — not everybody can afford real estate. Real estate was really limited to middle and higher-income earners.

This solution opens the door to pretty much every type of income. And that’s how it came. So initially Avrio Invest was purely a blockchain real estate investment firm, but as time went on we started realizing no, it doesn’t necessarily have to just be real estate. It could be the medical sector and supply chain. It could be the governmental sector in regards to governmental services. And now it’s growing into something bigger than what we originally anticipated.

What are some of the key opportunities for the real estate market in Saudi Arabia? I know you mentioned that cryptocurrency allows more people to enter this market what other opportunities are there?

When we first started this, we needed to make sure that any of this was legal. In Saudi Arabia, we have what’s called shariah compliance. You have common law and religious law. I needed to find out if I tokenize real estate would this be legal. We couldn’t find a lawyer who understood blockchain for almost three months with help from Espeo — we had to get legal advice from the UAE. We found out that because the Avrio token would be backed by a real estate asset, it falls under shariah. Bitcoin is illegal because it’s not backed by anything. Avrio coin is legal because it’s backed by a tangible asset that can be liquidated at any time. This was one of our breakthroughs.

Saudi Arabia blockchain
Riyadh, Saudi Arabia

In regards to other opportunities, we’re confronting the Ministry of Health right now to turn it into a law where every hospital, every clinic, every insurance company, every pharmacy is on the blockchain so that the companies can keep track of everything the country can keep track of everything. There’s a huge opioid epidemic and there’s a huge epidemic in loss of records. Basically, hospitals are not communicating with each other. So there’s a long list of issues.

In Saudi Arabia, medical care is by law. If you’re an employee, you need to have it. You have insurance companies that are losing money. We strongly believe that the blockchain will solve the issue that Saudi Arabia has and this also falls in Vision 2030, which is to reorganize the medical sector. There’s a lot of money being lost by the government, by the hospitals, by the industry itself as a whole and we believe that this is a solution to the point where we’ve already started talks with the government in regards to this.

And there is interest in this but one of the biggest issues that we’re facing is that nobody knows what blockchain is. When you go to Dubai or Bahrain and you talk to people and you open the subject of blockchain at least two out of ten people will understand exactly what blockchain is most people will refer to bitcoin. In Saudi Arabia, zero. Nobody knows what it is. So we see that our biggest obstacle right now the worst thing is educating the market. We’re invested in marketing just to educate. If you look at our promotion videos, they’re purely educational, not on the product development level.

There’s bigger awareness for blockchain. When I registered the company in 2017, I didn’t think I was going to invest so much time and money in the project as I have. I thought it was just an idea and i didn’t know if it was going to materialize. It wasn’t until mid-2018 we realized, no this is something that has the potential to change the market. Because it really falls into Vision 2030, which is the most important thing right now. If companies are not in compliance with Vision 2030, they won’t succeed. Every aspect of Avrio fits into the vision of His Royal Highness Crown Prince Mohammad bin Salman.

How do you see blockchains changing Saudi Arabia in the next ten years? You’re removing a lot of the middlemen, right?

I believe it will be a huge contributor to both foreign investment and governmental services in regards to the medical, the educational sectors. I believe it will have a huge impact. In regards to the speed, that’s a delicate question. Although Avrio Invest is moving very quickly, you don’t know how the market will respond to it. At the end of the day, you’re speaking Chinese. You’re literally changing the way people do things.

In real estate, you’re going to receive a lot of tension because you’re removing a lot of the middlemen. removing the banks pretty much. Unless the bank gets on board. The problem is that this is a perfect solution for any bank. Yet they’re very slow. If you look at it in the United States or in Europe, banks are moving very slowly for some reason, which I find mind-boggling. Bankers tend to be very pessimistic on the technology and that’s because it risks putting them in an awkward position. The beauty of blockchain is that we validate, everything is transparent. So our biggest obstacle is with the bank. However, we’re very optimistic because one of the banks that we’re in talks with is co-owned by the government.

And we have a huge relationship with them because one of the companies I’m consulting for has the biggest real estate fund which is through a major local bank. But this is still early stages. We see the banks adapting to it really quickly. Our biggest obstacle. I would say for the real estate sector is basically the government approving the coin — the Avrio token.

You also mentioned discussions with the Saudi Ministry of Health, what sort of solutions do you hope to offer?

In regard to the Ministry of Health, it’s still at a very early-stage discussion. I’ll give you one example. When I was living in Canada or in the UK. Let’s say you go to a doctor and he will give you a paper slip. Then you go to to the pharmacy, the pharmacist would take that slip and give you the medicine. In Saudi Arabia, the pharmacies don’t take the prescription slip. So what the person does is he’ll go to several different pharmacies and buy several boxes. And then you have an issue.

Blockchain I believe will solve this issue. If the whole healthcare system is on the blockchain. For example, if a doctor decides to prescribe you a medication, he doesn’t give you a piece of paper, he puts it on the blockchain. All the pharmacies in Saudi Arabia would be connected to it. Once the pharmacies have given you your medication, it will be validated that a certain medication has been given to a specific person. You get the idea.

So people hoard medication? Or turn around and sell it?

Yes. In Saudi Arabia, the hospitals are not in contact with each other. You’ll have a patient go to one hospital and get treatment. A week later, he’ll go to another hospital and get medication again. One treatment contradicts the other and unfortunately, you have a death.

Connecting all of the hospitals, insurance companies, all of the pharmacies This is something the government needs to implement. I believe it will solve this issue when the whole healthcare system is on the blockchain.

What challenges does Saudi Arabia face in leveraging blockchain technology?

Saudi Arabia has to catch up. In a sense, we’re trying to outdo the UAE in blockchain implementation. And I think Saudi Arabia will succeed. We have the economy to do it. When we started Avrio Invest, though we realized that we wouldn’t be able to have anybody to code because there’s nobody inside Saudi Arabia to code. One of our biggest issues is that were not able to find any nationals to write blockchain code. Great programmers will make or break your company. That’s why we decided to partner with Espeo.

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Blockchain Finance Financial Services

5 things you should know about the IEO

Is the initial exchange offering, or IEO, the new form of fundraising? Like the initial coin offering before them, they have attracted the blockchain world’s attention. But are they really a sound alternative? In this post, I’ll dive into the technical, fundraising, business, security, and legal aspects of the token offering. Here’s what you need to know about IEOs.

Short for initial exchange offering, the IEO is one of the newest ways for blockchain startups to raise initial funds. But how do they work? Promising to avert some of the worst of the ICO phase, IEOs involve exchanges directly instead of inadvisable methods such as the token airdrop to distribute tokens. First, a startup sells tokens for users to spend as an internal currency or as a voucher to access their platform, and any discounts, services or products. The entire process depends on the demand for the new token, which funds the first stages of startup development.

Key to this model is that startups don’t sell tokens themselves, but rather collaborate with cryptocurrency exchanges who organize and execute the token sale. Exchanges such as Chinese exchange ZB.com are established companies with existing customers, so they can handle the promotion of the sale and secure customer accounts. Normally traders can immediately trade their tokens processing time has finished, but sometimes there are vesting periods for tokens – they are held for a certain time. Considering that IEO is mostly based on tokens with solely a utility/ payment function, rather than security features  (for example, share participation in a company), trading tokens is a method to grant liquidity for the platform, rather than an investment in a traditional and legal sense of the word. 

1. Technical aspects

To explore the technical aspects of IEO, I decided to consult my colleague Marcin Rzetecki, blockchain consultant at Espeo Software and vice-president of the Blockchain Polska Association (in Polish). He is well-known for his vast experience in IT and extensive knowledge of digital currencies.

According to Marcin, IEOs are presently the best way to raise money, especially compared to the ICO and STO. ICOs have lost people’s trust in the last months, as many of ICO-based projects were announced as scams or failures. The IEO is a breath of fresh air in his opinion and has several success stories to prove its credibility, such as BitTorrent, Celer Network and Matic Network, all of which have achieved success on Binance through an IEO. When asked about pioneers in cryptocurrency exchange, Marcin pointed out that, “there is no other exchange that has done its own blockchain, but Binance has achieved it. They have also made their own successful token — Binance coin. It allows you to spend it on the Binance platform.” 

Regarding technical aspects of IEOs, Marcin said, “investors don’t take much interest in a technical approach. For them, the new form of fundraising should be safer than before. I think Binance found the best solution. They have the entire ecosystem to the IEO such as its own blockchain, its own cryptocurrency, and proven publication processes for new projects. Generally, with Binance, things would be the easiest way on the technical background.” 

Theory aside starting an IEO is roughly similar to the ICO. Creating a solid business foundation, therefore, is the biggest challenge to tackle. Sylwia Rogowicz,  Lead project manager and co-founder of Espeo Software, shared what she believes will make IEO projects successful. 

“An excellent business model described in the white paper and well-prepared tokenomics [are essential],” she said. “From a technical perspective, both the token and the sale are prepared according to the business model, so it must be of great quality.”

Meanwhile, Hakan Atabaş, founder of Geliyoo (in Turkish) cites IEOs as a safe method of exchange and recommended it for startups. Of course, cost is something every startup wants to know. One downside to the IEO is the cost. The fees charged by exchange companies can range from $250,000 to $400,000 USD, according to Hakan.

2. Fundraising aspects

After covering the technical aspects of IEOs, let’s focus on fundraising and investment. I also spoke to Ethan Pierse, director of The CryptoAssets Institute, founder of Borderless Ventures to dive deeper into the subject. For him, the difference between IEOs, ICOs, and STOs from the investor and fundraiser point of view is purely about who’s selling the tokens.

“An IEO”, he said, “is just an ICO run directly on the exchange, nothing more. Exchanges run due diligence before accepting the IEO for particular projects.”

While IEOs gives many an opportunity to raise money for interesting projects, it is not 100% secure. It simply offers immediate utility, not future utility, which lets projects gain more visibility. In fact, during the crypto winter, only IEO projects became big fundraising hits. However, Ethan remains cautious. He questions how diligent the due diligence checks are.

“[It’s unclear whether] the exchanges are really doing very thorough due diligence or just taking the money for the IEO,” said Ethan, “including listing on their exchange.” 

Investors want valid projects, rather than pure ideas, which explains Ethan’s doubts. Ethan also points out that many people involved in ICOs and IEOs don’t understand the value of hard capital, because they raise money too easily.

When I asked him whether it is better to choose a big worldwide exchange or a local one, he said it all depended on a project. Local projects benefit greatly from local exchanges, while global projects thrive on the biggest worldwide exchanges such as Binance. 

Investor interest in the initial exchange offering may come from the feeling that they are somehow more legitimate. One huge plus generally is in marketing support. “Exchanges do provide visibility,” Ethan offered. “They’re creating content and visibility for your project and shifting it toward exchanges and your project. It also saves money for the project because part of the ICO fundraising would normally go toward listing the token on an exchange.” 

All in all,  if you aim to raise funds for an existing blockchain project and the token has immediate utility at issuance, an IEO is an option to consider for your business. 

3. Legal aspects

Of course, the elephant in the room for all blockchain projects is the complex, often unclear web of laws and questions of jurisdiction. To learn more about the legal aspects of IEOs, I talked to Pavel Vasilevski, who provides legal advice for the financial industry and has a vast experience in a blockchain stock exchange.

Pavel stressed that the jurisdiction of the platform chosen to conduct IEO on is very important, as “its reputation and regulation will have many repercussions on the performance of the offering.” He said that “from the IEO perspective, any legal entity located in Switzerland or abroad can conduct an IEO with a crypto exchange located in the same or another jurisdiction.” stockup.ch  is the recommended blockchain stock exchange of his choice, as he regards it as a trustworthy and ambitious project. According  to Pavel “the biggest challenge is to find a proper crypto exchange, which is able to conduct the IEO for a startup and willing to do everything compliant to the actual legislation.”

 4. Business Aspects

To learn more about IEO’s business potential I asked Ralf P. Gerteis, an entrepreneur, executive, and blockchain evangelist to share his thoughts on IEOs. According to Ralf, IEOs work out great for “comparably mature blockchain-based ventures, which have built up a lively community, a certain presence on social media and PR, a team that shows all necessary experience, skills and which brings a good level of reputation.” 

He thinks that IEOs make sense for products based on the strong utility of the token, especially if the company wants to develop a healthy ecosystem soon after listing. However, he predicts that the STO’s significance will increase after regulators hammer out all the legal issues. His recipe for initial exchange offering success? A careful plan, an available budget, and business maturity in all relevant aspects. 

5. Security aspects

Security comes first, so when On Yavin, CEO of Cointelligence, agreed to share his insight on IEO security, I was delighted. On says that in an ideal IEO project, everyone benefits from the arrangement: from a project team, which doesn’t have to spend too much time on marketing, through investors, who can participate in IEO projects, to exchange companies, which get their cut of proceeds. 

Nevertheless, conditions aren’t always ideal, and too often exchange companies have too much power in selecting projects and focus mainly on profits. Consequently, they ignore many great projects. On also warns against scammers, stating that “the scams can come from two fronts with an IEO: the project itself, or the hosting exchange.

Projects can be scammed by unscrupulous exchanges that don’t deliver what they promised.” He also mentioned that although exchanges should be doing due diligence, many of them don’t. What is one of the things to look out for when working with IEO? According to On, security. In his view, people “should look into what sort of insurance the exchange has for the funds it’s holding,” as exchanges are often on hackers’ radar. 

Conclusion

As with every new solution, it’s important to exercise caution. Beware of scammers, and always check whether the tool is the best match for your needs. The initial exchange offering is relatively easy to navigate and guarantees great visibility, so it could work if your project has good liquidity. A careful plan, an available budget, and business maturity in all relevant aspects should be enough to ensure your success in IEO projects, but each case is different. Minimize the risks to maximize the potential of IEO and you will discover a whole new world of business possibilities. 

After reaching out to several cryptocurrency exchanges, the cost to list an initial coin offering varies project to project. They tend to calculate based on trading volumes. For the technical review and development process, it’s also important to pick a solid partner. For more information on building and launching an IEO, drop us a line and we’ll guide you through the process. 

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Blockchain Financial Services

Key takeaways from the Crypto Valley Conference 2019

With the ever-changing world, new technologies — and ways to market them — are in constant flux. Many feel lost about how to actually market and steer a blockchain business in the digital era. This year’s Crypto Valley Congerence in Zug, Switzerland was full of enthusiastic people eager to meet others in the crypto sector. I sat down with Ian Simpson, managing partner of Sionik & Head of Communications of Crypto Valley Conference to hear his tips on successful crypto business management, branding, and marketing.

Originally from the US, Simpson moved to Switzerland in 2017 when the crypto market was just beginning to take off. Zurich, the center of the so-called crypto valley attracted investors, and entrepreneurs alike. Ian recalled that in these initial stages startups pushed boundaries and redefined what’s possible. The industry was booming, ideas became the most common currency, and the city was full of excitement for whatever the future brought.

Ian loved it so much that he decided to move to Zurich to experience the emerging industry with his own eyes. According to Ian, the biggest marketing challenges are people’s closed minds. He says that since the business boom in Switzerland happened so suddenly, it was a revolution to adapt to, rather than an evolution to stop. Such a turn of events let the industry progress surprisingly fast. Though many projects never became the next success stories, Switzerland did establish a reputation as a dynamic business hub in the digital era.

As new industries spring up and old business models fade away, navigating business becomes more adventurous than ever. Blockchain has changed the DNA of industries such as medtech and has helped many make strides in digital transformations. Can we learn to thrive in the digital era if technical revolutions seem to happen almost overnight? Are there any safe hubs for business, when marketing currents constantly change? Simpson suggests certain branding strategies frequently work. What is Ian’s take on the modern market, cryptocurrencies, and the business climate in Switzerland?

Tap into growing blockchain enthusiasm

The revolution in cryptocurrencies has brought interesting organizations to life — ones eager to disrupt existing models. The Crypto Valley Association is one of them. The Swiss non-profit is a multi-stakeholder organization with about 1200 members worldwide, and Ian’s professional base. There Ian handles marketing and event organization. Since the organization’s founding in 2017, people’s interest in cryptocurrencies has cooled after the initial craze, but the numbers of serious, committed business partners have only grown.

On the contrary, Ian said that at the Consensus conference in New York he attended in May 2019 didn’t have as many visitors as the previous year, however, people’s enthusiasm and commitment to blockchain technology seemed to have doubled. “Many see blockchain technology,” he said, “as a basis for the whole economy, and financial instruments.”

Despite the niche fervor, though, one of the factors holding blockchain projects back is a lack of broad knowledge. Without opening a wallet or acquiring a basic understanding of handling crypto assets, investing was too difficult for the average user. Thankfully, since then institutions understood blockchain’s potential and began to build systems to adapt to the new technology. In fact, Ian is optimistic about the future, he recalled people working very hard to bring things forward. Some strides we’re only now starting to see. This year’s Crypto Valley Conference together with Lucerne University of Applied Sciences organized the event bringing the world’s blockchain professionals together in one place.

Switzerland has positioned itself as a friendly place to set up and operate crypto businesses. Nevertheless, Simpson cautions that the Alpine nation can’t start a technological revolution alone. “It takes cooperation and collaboration among people and players all over the world, just like the technology itself,” Ian said. He also added that “Blockchain works because you have a network and because you leverage that network to create a distributed system.” While Switzerland can lead the world towards the digital future, the world has to follow suit.

Consider Switzerland as a base

For years, Switzerland defined itself as a business paradise and continues to attract entrepreneurs from all over the world. Is Switzerland’s future looking bright? Facebook’s recent Libra project — headquartered in Geneva — suggests that the only way for Switzerland is up. Switzerland is booming with potential and shows no signs of slowing. Do countries with flexible business regulations threaten Switzerland‘s strong market position? Not in Ian’s eyes. He says that setting companies in Malta or Gibraltar might be tempting, as these countries have been incredibly flexible in building new laws and frameworks for crypto and blockchain projects, but building a sustainable business should always be a number one goal. This is why in the eyes of investors and future clients, Switzerland is one of the best places for blockchain company headquarters.

While Simpson operates in Switzerland, he thinks there are other clusters of blockchain innovation. Central and Eastern Europe is one such region. He sees a lot of potential in people and their hunger to build and change things. According to Ian, Central and Eastern Europeans and Americans are similar in their disdain for silly regulations and bureacracy. “[There is this] ‘there might be limits, but we’ll find a way around them’ attitude, which is deeply embedded in people’s mentality.”

Believe in your why to find your how

Many business gurus say there is no golden formula for success and one-size-fits-all marketing strategies are nonsense. However, according to Simpson, there is one piece of advice that helps any business thrive. Ian’s recipe for success is simple. “When it comes to communication and marketing,” he said, “with the emerging technologies and innovation, the first thing you have to do is explain what it is and why it is needed. If you can’t do this, you can never sell anything to anybody. You can’t sell something that people don’t understand. The most important thing to establish a value proposition, and establish who is going to benefit from this. A product market fit is the most important thing!”

Make networking a priority

Have you ever skipped an important conference and thought it made no difference? Wrong! Networking helps to build trust and significantly increases your business reach. Ian’s advice is to attend business events and network as much as you can. By attending business events you are raising your own profile. He always tells his clients not to spend money on events that won’t raise their profile and trust level significantly. This year’s Crypto Valley Conference was a great opportunity to meet other visionaries, entrepreneurs, and business reps and build connections with the larger community.

Key takeaways

  1. Be open to feedback to adjust your product to market needs in the early stages
  2. Reach out to people, who have the problem you plan to solve and see if your product is actually a solution
  3. Always get to the people in the industry you are trying to disrupt or support (users, beta testers, etc.)
  4. Narrow your focus, and be very specific
  5. Be selective about markets you are going for
  6. Understand what worked and keep doing it
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Blockchain Financial Services

What you need to know about ERC token standards

Making sense of the ERC token types and what they do can be a bit confusing. Different token standards enable different features. From representing ownership of an asset to making trading easier, tokens are an integral part of any decentralized application. The utility of the Ethereum protocol is that it allows developers to build dApps on top of the underlying blockchain.

Unlike Bitcoin, which primarily functions as a payment system On the other hand, Ethereum opens up other use cases for blockchain technology. Business cases so far have tended to focus on intangibles such as cryptocurrency, transferring medical records or tokenizing digital assets. However, tokens can also stand in for of physical assets, such as real estate and luxury goods, or power supply chain tracking platforms. Each type of digital token serves a slightly different function and understanding the difference between ERC token standards can help you decide which one is best for your blockchain project.

Tokenizing assets is one of the main value propositions of the Ethereum blockchain. Smart contracts need cryptographic tokens to function. Gas — paid in the form of ETH tokens fuels the transactions on the Ethereum network. While the two most common types are the ERC-20 and ERC-721, others are emerging with new features and improvements. In this post, I’ll look at the main types and examine the use cases as well as the pros and cons of each.

ERC-20

Among the most common and functional ERC token types is the ERC-20. These were very popular in ICO projects because they made it easier to create and distribute tokens directly to user wallets. Additionally, end-users can freely trade and use them within token economies.  Simple functions allow developers to limit the total supply — a key consideration in a tokenomics model and allow users to transfer tokens easily. Smart contracts verify user funds and approve the transactions before finally writing the transaction to the blockchain. Inside the system, the tokens are of equal value and users can exchange them freely for other tokens.

These fungible digital tokens enable platforms to issue tokens users need to access a service. Like a kilo of wheat or a barrel of oil, fungible tokens are worth the same as other tokens in the ecosystem. This equal value encourages token users to earn and spend freely. One example Espeo helped develop is the derivatives trading app CloseCross (pictured above) which issues tokens that allow users to place bets on derivatives contracts.

For a case study of the CloseCross project, read more here.

Users pay in a number of tokens to place a bet and receive tokens back when they win. This, of course, provides an incentive for end-users but also helps power the system as a whole. Because it’s a trading ecosystem, we decided to implement ERC-20 tokens in the tokenomics model. CloseCross wants users to win and spend their tokens to access a service and sustain the dApp, not hoard them away.

ERC-20 Pros:

  • Widely used token standard and supported by a majority of exchange and wallets
  • Supported by most exchanges and wallets
  • Good for trading applications where fungibility is important

ERC-20 Cons:

  • High gas costs
  • UX has led some to send coins to smart contracts instead of crypto wallets.
ERC token standards

ERC-721

One of the other common ERC token standards is the ERC-721. Unlike the ERC-20, ERC-721 tokens are non-fungible. In other words, each token has a different value in the system. While ERC-20 tokens are the same value and act as currency on the platform, ERC-721 tokens are not. The point of these is to create unique, rare or editioned assets. ERC-721 tokens allow developers to tokenize assets of different values. The most famous example is the Ethereum dApp CryptoKitties.

Each cryptographic piece of digital art had unique features which gave them value. Some features are more desirable than others. While CryptoKitties got its fair share of ridicule, it demonstrates some of the usefulness of blockchain and of asset tokenization. Digital artists, for example, can use ERC-721 tokens to protect their original work from unauthorized copies.  

With ERC-721 tokens artists are able to tokenize digital work — creating cryptographic scarcity and protecting its value. Several startups such as Maecenas and Artory are already tokenizing physical art to ease provenance studies and facilitate sales. Outside of the art world, other firms such as Streetwire are tokenizing real estate for similar benefits. Essentially, ERC-721 tokens facilitate the transfer of unique assets. Development in

ERC-721 Pros:

In one of our product design workshops for our client Luxtrack, we developed a tokenomics model incorporating the ERC-721 token on their anti-counterfeit luxury goods platform. The token allows users to seamlessly buy and sell second-hand luxury items and be confident that the items are not knock-offs. Luxtrack tokens provide a scalable way for the company to build trust and expand a market rife with abuse. ERC-721 tokens enable the company to reassure consumers that the products they buy are authentic.

  • Allow artist to edition their work
  • Non-fungible tokens enable platforms that rely on scarcity and value to trade
  • Represent ownership of investments rather than functional tokens

ERC 721 Cons:

  • Slow adoption
  • Tricky to get UI/UX right

ERC-223

While this one is not a fully supported digital token, this token type addresses several of the UX shortcomings of other ERC token standards. Many people have sent coins to the wrong wallet address or worse, to a smart contract, losing those coins forever. Though many crusty developers might say it’s end-users’ fault for sending tokens to the wrong address, it could limit broad adoption among the general public. These unfriendly design features might turn non-technical people away.   

In short, the proposed ERC-223 alerts users who accidentally send tokens to a smart contract address and cancels the transaction. Users still pay the gas cost but save their ETH. Amigocoin is one of the only projects currently using the ERC-223

ERC-223 Pros:

  • Proposes friendly UX features that protect users from loss of funds
  • Backward compatible with ERC-20 token standard
  • Half the gas cost of ERC-20 tokens

ERC-223 Cons:

  • Not widely accepted by the Ethereum community
  •  Incompatible with many wallets

ERC-777

Just as the ERC-227 offers bug fixes for the ERC-20 token standard, the ERC-777 digital token proposes still more ways to improve blockchain usability. This digital token adds several more functions to the popular ERC-20 token standard. One of the most innovative is the option to mint or burn tokens, which may be a necessary feature depending on a project’s tokenomics model.  Of all the ERC token types, this one may also make the transfer of tokens much simpler.

Of course, as with the other more obscure ERC token standards, few projects have actually decided to implement the protocol. However, Ethereum applications could benefit from better design and more user-friendly options.

ERC-777 Pros:

  • Proposes improved usability

ERC-777 Cons:

  • Not widely accepted

Conclusion

As more and more ERC token standards emerge, each one will roll out new features and bug fixes for the existing tokens. Choosing which digital token to use in your blockchain project is essential to ensure your platform delivers the most value to end-users. Whether you’re launching an STO or tokenizing medical records, getting the tokenomics right is a vital step to launch a successful product.