The basic issuance flow described in the initialization section will result in an expiring NFT that can be transferred exclusively via the token manager program’s transfer method. This allows for three degrees of transferability:
- Permissioned transfer
- Permissionless transfer
If the issuer elects to make the token's transferability permissioned, they must specify a transfer authority that can approve transfers. The current holder can then only transfer ownership by invoking the transfer method which will require a signed receipt from the transfer authority. Examples of transfer authorities include individuals (the token issuer for example), a KYC authority where the prospective holder must have been approved by a KYC protocol, or a financial regulatory entity that approves holders of a given asset class.
If instead the issuer elects to make the token freely transferable, the transfer authority will not be required to invoke the transfer method.
In both cases, successfully invoking the transfer method will require a signature from the recipient of the transfer. This is due to the fact that the transfer method works by reassigning ownership of the current owner’s token account which removes the current delegate by default. A signature from the new owner is thus required to reset the token manager as a delegate before the token account is re-frozen.