We are glad to announce that our TokenMint product now supports all major types of tokens.
Before we go into details, what does fungibility mean?
Wikipedia defines it as follows:
In economics, fungibility is the property of a good or a commodity whose individual units are essentially interchangeable.
For example, since one kilogram of pure gold is equivalent to any other kilogram of pure gold, whether in the form of coins, ingots or in other states, gold is fungible. Other fungible commodities include sweet crude oil, company shares, bonds, other precious metals, and currencies. Fungibility refers only to the equivalence of each unit of a commodity with other units of the same commodity and not to the exchange of one commodity for another, which is barter.
Most tokens, in many cases cryptocurrencies, on blockchains are fungible tokens.
A lot of things, however, are not fungible. Ownership over digital or physical assets is non-fungible. If we both have a pet of a certain breed and age. Or a vintage car of the same year, make and model, or house, we cannot interchange these and end up with the same situation after the switch. They are distinguishable and you must track the ownership of each one separately.
Partially fungible is closer to the fungible concept than non-fungible but adds metadata. For example, knowing when an individual token was minted allows vesting or lockup logic to be implemented for a portion of a token holders balance.
Tokens that represent securities often require metadata to be attached to individual tokens, such as the category of share or restrictions associated with the share. It can be used for token provenance (i.e. recording the previous owner(s) of tokens) or to attach data to a token which is then used to determine any transfer restrictions of that token.
In general, it may be that whilst tokens are fungible under some circumstances, they are not under others (for example in-game credits and deposited balances). Being able to define such groupings and operate on them whilst maintaining data about the overall distribution of a token irrespective of this is useful in modeling these types of assets.
TokenMint (or the generic distributed middleware Mint) now has the capability to create, manage and track each of these types. And can do so on public, consortium or private network setups based on Ethereum.
Fungible tokens: ERC20 standard.
The ERC20 standard is a standard for defining fungible tokens. The TokenMint solution supports ERC20 (and the backward compatible ERC777 advanced token standard) for the issuance, transfer, tracking and general management of fungible tokens. This token standard is the basis for any public Ethereum token and our clients have used TokenMint to put multiple of these tokens into production. The use cases range from putting fiat currency on private networks, issuing securities, fractional shares and subsidies.
Non-Fungible tokens: ERC721 standard.
The ERC721 standard defines how to deal with goods or crypto-collectibles on chain. TokenMint provides the same support for them as for the fungible tokens. Our clients have used this standard to put discount vouchers and limited series of physical goods on chain.
Partially Fungible tokens: ERC1410 standard.
ERC1410 defines how these partially fungible tokens work on the Ethereum network. They are uniquely suited for financial use-cases where regulations or financial constructs require additional metadata. (e.g. certain types of financial instruments in Germany have a unique number or vested shares over time) This is a new token standard and is in use by our clients to tokenize shares in SPV (special purpose vehicles) owning non-publicly traded shares of this worlds unicorns, essentially providing an alternative representation of these shares allowing them to be traded at a fraction of the cost while providing liquidity to the original owners.
Not just a bunch of tokens
Just deploying these tokens is not the full scope of the TokenMint capabilities. The distributed middleware provides complete wallet functionalities for token holders, a decentralised order book and matching engine to facilitate trading of these tokens and allows the flexibility to customize these tokens with custom rules like converting to different tokens on spending them, tracking repayments in the context of loans, on chain management and execution of transaction costs and even restrictions on to whom the tokens can be transferred.
If you want to know more, do not hesitate to contact us on [email protected] so we can help you put this solution in production for your use-case.