STP

In order to make this upgrade possible, we believe there needs to be a standard for security tokens that utilizes these benefits while satisfying regulations. With a standard in place, security token issuers, investors, exchanges, wallets, custody providers, and regulators can become comfortable with this technology, interoperability becomes easier, and adoption can be widespread. Similar to how the ERC-20 standard enabled the boom in utility tokens on the Ethereum blockchain, there needs to be a standard for security tokens.

The standard we have built at Good Securities is STP. STP is an extension of ERC-20 that introduces the ability to restrict transfers of blockchain tokens. ERC-20 tokens do not have any transfer restrictions and therefore can be freely traded by anyone. This is fine for so-called utility tokens. When dealing with securities, however, all securities holders must be KYC/AML verified, and there are many additional restrictions on the distribution and trading of securities. STP is the solution to this problem. It allows security token issuers to maintain regulatory compliance through transfer restrictions. And beneficially, it is backward compatible with ERC-20 making it interoperable with much of the existing blockchain infrastructure available today.