One of the pain points for custodial ownership of security tokens is that currently the only way to do this (applies to all ERC-20 tokens) is to take full ownership of the tokens.
This causes a bunch of problems, most noticably:
- incorrect ownership tables which mix beneficial and custodial ownership
- inability to distribute capital (e.g. dividends) to beneficial owners
- inability for beneficial owners to participate in goverance
This places constraints both on organisation based custody service providers, as well as DeFi protocols that need to take custodial ownership of security tokens for e.g. collateral purposes.
ERC-2258 proposes a new mechanism for custodial ownership wihich gives custodians similar guarantees, but solves the above issues.
Would love any feedback and thoughts on it!
Thanks,
Adam