Book Image

Security Tokens and Stablecoins Quick Start Guide

By : Weimin Sun, Xun (Brian) Wu, Angela Kwok
Book Image

Security Tokens and Stablecoins Quick Start Guide

By: Weimin Sun, Xun (Brian) Wu, Angela Kwok

Overview of this book

The failure of initial coin offerings (ICOs) is no accident, as most ICOs do not link to a real asset and are not regulated. Realizing the shortcomings of ICOs, the blockchain community and potential investors embraced security token offerings (STOs) and stablecoins enthusiastically. In this book, we start with an overview of the blockchain technology along with its basic concepts. We introduce the concept behind STO, and cover the basic requirements for launching a STO and the relevant regulations governing its issuance. We discuss U.S. securities laws development in launching security digital tokens using blockchain technology and show some real use cases. We also explore the process of STO launches and legal considerations. We introduce popular security tokens in the current blockchain space and talk about how to develop a security token DApp, including smart contract development for ERC1404 tokens. Later, you'll learn to build frontend side functionalities to interact with smart contracts. Finally, we discuss stablecoin technical design functionalities for issuing and operating STO tokens by interacting with Ethereum smart contracts. By the end of this book, you will have learned more about STOs and gained a detailed knowledge of building relevant applications—all with the help of practical examples.
Table of Contents (9 chapters)

Stablecoin technical design overview

In this section, we will review the technical design of some major stablecoins, especially smart contracts.

Tether (USDT)

Tether stablecoins run on the bitcoin blockchain. These are designed in three layers, as shown in the following diagram:

Let's take a look at these layers:

  • Bitcoin Blockchain: Tether uses an embedded Omni consensus protocol to record Omni transactions in bitcoin transactions. Each Omni transaction has the same hash value in the blockchain.
  • Omni layer protocol: It includes Decentralized exchange, Omni Wallet, Tethers in Circulation, P2P transfer and storage, and Other features. Tether protocol can create the token and redeem the token from the circulation supply...