Electronic trading systems developer Ed Silantyev has announced his new project: the Financial Securities Protocol. It is the first such protocol for tokenized securities on the EOS blockchain.
Developer of trading systems Ed Silantyev has just announced his new project: the Financial Securities Protocol (FSP), the first of its kind on EOS. The purpose driving the creation of FSP is “asset self-sovereignty” by baking in compliance requirements into the asset itself thus making tokenized securities possible on EOS.
Coupled with FSP will be the Financial Securities Protocol Proposals: a platform for discussion on improvements to the protocol as made by the community.
The Dawn of the “Financial System 3.0”
The FSP aims to be the “blueprint for the Financial System 3.0.” Lightening-fast trading and efficient primary markets, along with our current largely cashless economy, ushered forth the Financial System 2.0. Now, as Silantyev writes, blockchain technology will bring in the 3.0 installment of financialization through what he calls asset self-sovereignty.
The EOS blockchain was chosen due to “consistently being the most active blockchain in Fall 2018.” FSP will build its core modules using EOS in order to “realize high-throughput scalable financial applications.”
FSP can best be broken up into modules. They are currently:
fsp.security which defines the basic functionality of a financial asset.
fsp.regulator acting as the gatekeeper of the protocol, being able to block the transfer of securities not compliant.
fsp.exchange providing a point of liquidity.
fsp.registry or the entry point into the network, responsible for KYC/AML checks.
fsp.communication is the “gossip module” and for essential communications.
The importance of security tokens cannot be overstated. Now that EOS has its first security token protocol in development, its blockchain can join the growing sector that aims to tokenize traditional assets, ownership, equity, debts, and many other financial instruments currently a part of the broad category of “securities.”
The Financial Securities Protocol is a step towards this vision: towards the “Financial System 3.0.” For more information on tokenized securities, read our comprehensive guide on the exciting new digital asset category here.
What do you think of the announcement of the FSP? Will EOS become a hub for tokenized securities? Let us know in the comments below your thoughts.
Meet Tim. Tim is a co-founder of The Tokenist. Originally from Kalamazoo, Michigan, Tim is a mechanical engineer by training and has been investing his whole life. He started his career with GE in engineering and operations management where he held various leadership roles before leaving to pursue an MBA (he is a proud former co-chair of the Milton Friedman Group at Chicago Booth). After business school, Tim spent several years with Baird Capital where he made private equity investments in consumer and industrial companies. He left Baird to found Protective Technologies Capital in 2018, where he continues to make private equity investments in family businesses looking for help with succession planning. Tim lives in Chicago, where he enjoys watching Michigan football and basketball and traveling with his wife Kristen. Like Sia, he also likes telling jokes. However, his wife adamantly insists that he not share his “dad jokes” publicly so he reluctantly sticks to writing about finance and technology.