ERC-3643 vs ERC-3525: SFT vs Security Token Frameworks

Purpose-built for securities: Includes native on-chain compliance via the T-REX protocol for KYC/AML, investor whitelists, and transfer restrictions. This matters for tokenizing real-world assets (RWA) like equity, funds, or debt where legal enforceability is non-negotiable.

Semi-fungible structure: Each token has a unique ID (like an NFT) and a numeric value slot (like an ERC-20). This enables complex financial positions like bonds with decaying principal, insurance policies, or loyalty points with tiers within a single contract.

Proven in production: Used by institutions like Tokeny and Swarm for security token offerings (STOs). The standard is backed by the Tokeny T-REX SDK, providing a full-stack solution for issuers. Choose this for projects requiring immediate, vetted infrastructure.

Designed for programmable value: Its slot-based architecture allows tokens to interact seamlessly with DeFi primitives like AMMs, lending pools, and derivatives. Projects like Solv Protocol use it for convertible vouchers and financial NFTs. This matters for building on-chain capital markets.

Issuer-centric model: Provides issuers with on-chain tools to pause transfers, force transfers for corporate actions, and manage cap tables. This is critical for maintaining regulatory compliance post-issuance and handling events like dividends or shareholder votes.

Extensible data schema: The slot attribute allows developers to attach custom logic and metadata, enabling tokens that represent multi-dimensional assets (e.g., a game item with durability + level). This enables innovation in gaming, credentials, and layered finance.

Built-in on-chain compliance: Features mandatory identity verification (via ONCHAINID), investor whitelists, and transfer restrictions. This is critical for security tokens and real-world asset (RWA) protocols like Tokeny and Swarm that must enforce jurisdictional rules.

Complete off-chain legal wrapper: The T-REX protocol provides a full suite of legal documents and agent roles (Issuer, Agent, Controller). This reduces integration risk for institutions deploying equity tokens or debt instruments, as seen with Backed Finance and Mantra's ONDO.

Slot/ID structure enables complex state: Each token has a fungible 'slot' (e.g., a bond series) and a unique 'ID' (e.g., a specific bond). This allows for financial NFTs representing dynamic positions, used by Solv Protocol for convertible bonds and Yield Guild Games for vesting schedules.

Single-contract efficiency: Bundles multiple token states (value, metadata) into one contract, reducing gas costs for batch operations. Its ERC-3525Receiver standard enables seamless interaction with DeFi protocols, making it ideal for liquidity positions and in-game asset layers.

Heavy off-chain dependency: Relies on trusted third-party agents for compliance actions, introducing centralization points. The complex suite of contracts (Proxy, Identity, Compliance) increases audit surface and integration time versus simpler ERC-20/721 standards.

Limited mainstream wallet/DEX support: While powerful, SFTs are not natively recognized by most front-ends (e.g., MetaMask, Uniswap V3). Requires custom integration, creating higher development overhead for projects not already in the Solv or ERC-3525 ecosystem.

Native multi-dimensional data: Each token has a value slot, enabling complex financial logic like bond coupons, insurance policies, and loyalty points within a single contract. This matters for building DeFi primitives and real-world asset (RWA) representations where state changes are frequent.

Composability with ERC-721: Inherits NFT properties (unique IDs, ownership) while adding fungible value layers. This enables seamless integration with existing NFT marketplaces (OpenSea) and wallets (MetaMask). This matters for hybrid asset models like in-game items with stackable power or fractionalized high-value NFTs.

On-chain permissioning engine: Built-in identity verification (via ONCHAINID) and transfer restrictions enforce KYC/AML. This matters for security token offerings (STOs) and institutional RWAs where legal compliance is non-negotiable. Adopted by institutions like Tokeny and Swarm.

Exhaustive control matrix: Provides granular roles (Agent, Controller) and recovery mechanisms for lost keys. This matters for corporate governance and fund management where multi-signature controls and audit trails are required. The framework is governed by the ERC-3643 Association.

Higher implementation overhead: Managing the slot and value logic requires sophisticated smart contract design. This matters for rapid prototyping where simpler ERC-20 or ERC-1155 might suffice. Fewer battle-tested implementations exist compared to mature standards.

Permissioned by design: The compliance layer introduces central points of control (Identity Managers). This matters for permissionless DeFi protocols seeking censorship resistance. Can limit composability with mainstream DeFi apps like Uniswap or Aave.