Proposal of a Service Model for Blockchain-Based Security Tokens

Round 1

Reviewer 1 Report

This is an interesting proposition for a service model for Secutity Tokens, which appears that can contribute, under constraints, to enhanced asset market operation.   Overall, the recommendation is to accept pending the following amendments. 

1. A thorough proofreading exercise is needed as on occasion there are typographical errors that may alter context. Especially the absence of articles can have that effect 
2. The case for introducing a Service Model on its own right needs to be more acutely highlighted. The literature, which is well-reviewed here, suggests a number of alternatives and the authors need to make a clearer case as to the utility and value of their new service model. In particular, since the SM engages a number of stakeholders in the supply chain, the requirements should be set on how each of them is to interoperate with the model. That I s a costly change and hence it needs to be conclusively supported.
3. On the back of (1) above, where in Fig 1 the operational role of each entity is defined, more detail needs to be provided on the blockchain component (last bullet point); I.e. proposed type, architecture, status, governance. 
4. A phase or function for token burn may well be required as a function owned by the issuer (or other custodian) - reference to model governance is critical here. The authors are advised to consider this addition, or discuss the absence of it, offering alternatives or a discussion (supported by the literature) on why token burning may not be necessary or involved. 
5. Figure 2 assumes CBDC model is wallet-based. This may need to be clarified, as the service model may also need to address (or at minimum acknowledge) how it will interoperate with token-based CBDC where no wallet operator is involved. 
6. Each of the Scenarios (investing & trading) should be best followed by a review and critical evaluation of the model’s operation, especially in view of operating and functional features (other than security, which is  tackled in detail) such as scalability, throughput, finality and privacy preservation and resilience. That may either be part of the recommendations, or (as suggested above) part of a critical evaluation in each scenario.
7. On a higher level, recommendations should be provided as to how the service model can or should be reviewed and evaluated. While it may be early design days for proposing a full framework for assessment, it is crucial to propose a roadmap for assessing (and comparing in the fulness of the implementation) the model with other approaches.  

See above

Author Response

Please see the attachment.

Author Response File: Author Response.pdf

Reviewer 2 Report

1.  The article presents a service model to solve a problem with the 

existing investment service model, and identifies security threats to the service model and specifies 

security requirements countering the identified security threats for privacy protection and antimoney

laundering (AML) involving security tokens.

2. Related to the state of the art and related work - for you the section is called Related studies:

Please emphasize better if there are other similar researches in this field

and what are the advantages of your solution in balance to others.

+

Please make a COMPARISON based on some criteria - your model vs other solutions!

3. Your solution is a theoretical one - al least for now... 

Are there any practical implementation of your solution?  At least a demo, a beta version...

something practical... through which you can validate the solution...

4. YOU SAID:

"The proposed service model will be developed as an international standard by 

ISO/TC 307 (blockchain and distributed ledger technologies), and the security guideline

for the proposed service model will be developed as Korean ICT standard by TTA

(Telecommunications Technology Association) PG502."

BUT:

What are the evidence you have? in order to be accepted as international standard there are 

some steps, some evidence, validation...  are you sure?

5. What are the limitations of the paper/research? Please explain.

6. What are the future works plans?

7. The Conclusions section MUST be improved. YOU said:

Considerations to prevent excessive regulation - 

How did you come to these conclusions? without any validation of your model...?

Please explain!

Author Response

Please see the attachment.

Author Response File: Author Response.pdf

Round 2

Reviewer 2 Report

Author Response

Please see the attachment.

Author Response File: Author Response.pdf