Token minting and capabilities

[szist]

Slightly related to Issue #12. There seems to be missing materials on actual capabilities in regards of interoperability and token minting approaches, especially in comparison with ERC-20 tokens:

• native scripts
• native scripts with mpcs
• plutus minting policies
• just locking tokens

As part of this issue, what would be the ideal capabilites that would be required by bridges? From eL | DcentraLab from discord

1. ability to freeze mints.
2. ability to freeze the tokens themselves.
3. ability to freeze the path of the bridge

Basically, having programmable tokens. Could this be handled by CIPs and extending token policies?

[jacktnho]

I think some of the most important features in ERC20 could be:

• approve() - one wallet can delegate a right to another wallet owner to operate / transfer the token (up to a certain amount) for itself.
• transferFrom() - allow a delegated third party (e.g. DEX or marketplace) to transfer tokens from one's wallet to another.

[CharityDA0]

Here is an example of token functionality requested for Cardano native tokens. Perhaps it can be included in the Smart Token proposal?

Title: CPS 101? - Cardano Improvement Proposal for Customizable Fees for Native Tokens

Abstract: CPS 101? proposes an innovative solution to introduce a customizable automated fee system for Cardano native tokens that can be easily executed by smart contracts on all exchanges. This proposal outlines two alternative methods for implementing the fee system - one utilizing a smart contract that controls the supply of tokens, and the other leveraging metadata of a special initial token during the mint.

Motivation: Automated fee systems have become increasingly popular in the cryptocurrency space as they incentivize token holders to hold onto their tokens and discourage frequent pump and dumps. They are also used to fund development and charitable giving. This functionality has been present on every major chain for years. However, Cardano’s current structure of native tokens makes it difficult to implement such fee systems, which rely on smart contracts to govern fees and distribution. This proposal seeks to introduce a method for implementing a similar automated fee system for Cardano native tokens, enabling greater flexibility and customization for token issuers.

Specification: Option 1 - Smart Contract-Based Fee System: To implement a smart contract-based fee system, we propose the following steps:

Create a smart contract that controls the supply of tokens and governs the behavior of the token.

Define the logic for deducting the fee from each transaction and distributing those fees to the appropriate parties within the smart contract.

Deploy the smart contract to the Cardano blockchain and associate it with the native token.

The smart contract will automatically execute and handle the fees and fee distribution whenever a transaction involving the token occurs.

Option 2 - Metadata-Based Fee System: To implement a metadata-based fee system, we propose the following steps:

Mint a special initial token that includes metadata defining the fee structure for the native token, much like the royalties done with NFTs on CIP-27.

When a user sends a transaction involving the native token, DEXs can easily implement the fee like done on NFT marketplaces.

Deduct the fee from the transaction amount, and distribute it to the appropriate parties.

Since the fee is specified in the metadata of the initial token, it does not require a smart contract to be associated with the native token.

Alternatively, the metadata could even point to a smart contract that handles the details automatically, making it more modular.

Rationale: By introducing a method for implementing a customizable automated fee system for Cardano native tokens, this proposal would enable greater flexibility and customization for token issuers. This proposal aligns with the overall goal of the Cardano ecosystem to provide a robust and flexible platform for building decentralized applications and tokens. Moreover, it will make it easier for communities to fund their projects democratically and incentivize token holders to hold onto their tokens. The proposal will make it possible for the Cardano ecosystem to attract a wide range of projects, from nation-states seeking to create their own digital currencies to charitable organizations wanting to fund their operations using the generated fees. The possibilities are endless, and the potential for innovation is vast.