Upgradable and easy-to-deploy ERC3643 V4 for tokenized securities

In the midst of the FTX chaos, we shared our views on its impact on the tokenization industry. Like many builders in this space, we continue to develop solutions to solve market problems. And today, we are excited to announce the launch of the version 4 of the ERC3643 smart contracts, providing upgradability and easy deployment for tokenized securities.

The code of a smart contract cannot be changed once it has been deployed on a blockchain. This is a huge concern for securities issuers, as they need to have full control over their digital securities. As regulations and business needs evolve, additional logic must be added and being able to fix potential vulnerabilities is essential. Therefore, issuers of tokenized securities must be able to upgrade their smart contracts.

To this end, the new version of ERC3643 is made upgradable through the use of the proxy method. A proxy contract delegates its logic to an implementation contract, so it can be ‘upgraded’ by pointing to a new implementation contract.

The ERC3643 V4 points the token logic to a central contract called Implementation Authority. This contract stores the address of the implementation contract. To update the smart contract, the owner can set the address of the new version of the implementation contract and the token will adopt the new logic of this contract. Furthermore, multi-token issuers can point all tokens to the same Implementation Authority contract so that upgrades are automatically applied to all their tokens simultaneously.

In addition to upgradability, issuers or their authorized agents can leverage Onchain Factory to automate the deployment of the entire ERC3643 suite in 1 single blockchain transaction. The ownership of the smart contracts is given directly to the chosen stakeholder during the deployment, eliminating the dependency on any third-party. Finally, with Onchain Factory, a token can keep the same token address across all EVM blockchains for simpler multi-chain operations. This drastically reduces the dependency on a single blockchain network.

The release of ERC3643 V4 is our latest contribution to the standardization of tokenization for capital markets. These upgrades are open source. By making sure that the main token standard for security tokens is always up-to-date with the latest innovations, we accelerate the growth of the ecosystem. Furthermore, to ensure the highest level of security, ERC3643 V4 smart contracts are currently being audited by prestigious firms. The results will be shared publicly once they are available.