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Atomic Digital Security Standard

An extendable smart contract standard for digital security issuance and automated regulatory compliance.

Overview

The Atomic Digital Security Standard (DSS) is a permissioned, ERC-20 compatible digital security that enforces transfer restrictions based on an upgradable RegulatorService contract. Once deployed, the RegulatorService can be replaced and configured to maintain ongoing compliance with securities regulations e.g. the enforcement of KYC/AML requirements, accredited investor checks, trading lock-up periods, tax laws, and other contractual agreements. The Atomic DSS architecture allows securities issuers to automate enforcement of a modifiable list of restrictions, while also providing the flexibility to update these restrictions to adapt to changes to regulations, governance, and/or business requirements that could emerge in the future.

Requirements

  • The Atomic DSS overrides standard ERC-20 functions transfer() and transferFrom() with additional checks to determine whether a transfer ought to be restricted. This is implemented by calling verify() from inside the current RegulatorService to supply the necessary restrictions logic.
  • The verify() function returns byte code that signals the status of a transfer and the specific reason for a restriction if it occurs. Additionally, the RegulatorService implements restrictionMessage() that returns a human-readable error message corresponding to a given byte code.
  • In order to allow for upgrading the digital security's restrictions logic, the Atomic DSS abstracts the RegulatorService by storing a reference to its contract address and implements replaceRegulator() that changes the pointer to a new RegulatorService.

Specification

Atomic DSS builds on the ERC-20 standard and provides additional functionality:

contract AtomicDSS is ERC20, Ownable {
event ReplaceRegulator(address oldRegulator, address newRegulator);

modifier notRestricted (address _from, address _to, uint256 _value);
modifier isContract (address _addr);

function replaceRegulator(RegulatorService _regulator) public onlyOwner isContract(_regulator);
function transfer(address _to, uint256 _value) public notRestricted returns (bool);
function transferFrom(address _from, address _to, uint256 _value) public notRestricted returns (bool);

function mint(address _account, uint256 _amount) public onlyOwner returns (bool);
function burn(address _account, uint256 _amount) public onlyOwner returns (bool);
function forceTransfer(address _from, address _to, uint256 _value) public onlyOwner returns (bool);
}

The RegulatorService contains all the restrictions logic and an error messaging system:

contract RegulatorService {
function verify(address _token, address _spender, address _from, address _to, uint256 _amount) public view returns (byte);
function restrictionMessage(byte restrictionCode) public view returns (string);
}