Protocols Used in Tokenization
Tokenization refers to the process of converting rights to an asset into a digital token on a blockchain. Various protocols facilitate this process, particularly in tokenization platforms. Here are some key protocols:
- Ethereum (ERC-20 & ERC-721): Ethereum is a leading blockchain platform that supports the creation of smart contracts. ERC-20 is the standard for fungible tokens, while ERC-721 is used for non-fungible tokens (NFTs), enabling unique digital assets like art and collectibles.
- Hyperledger Fabric: Designed for enterprises, Hyperledger Fabric allows the creation of private blockchains. Its modular architecture supports various tokenization solutions tailored to specific business requirements.
- Stellar: Stellar focuses on cross-border payments and offers a protocol that enables the issuance of tokens representing various assets. Its consensus mechanism allows for quick and cost-effective transactions.
- NEO: Known as the "Ethereum of China," NEO uses a dual-token system with NEO and GAS tokens. It provides robust support for smart contracts and token standards, making it suitable for tokenization.
- Tezos: Tezos employs a unique on-chain governance mechanism, allowing stakeholders to propose and vote on changes. This flexibility is beneficial for tokenization projects looking for adaptability.
Each of these protocols has unique features, making them suitable for different tokenization applications across industries.