Bitcoin challenged the fiat currency the moment it stepped into the digisphere. The technology behind bitcoin and other crypto assets, Blockchain, disrupted decade-old industries. It is one of the most promising technologies that support crypto assets such as Ether, utility tokens and security tokens.
A few years later, the security tokens became the next big ‘talk-of-the-town’ in the blockchain revolution. They were launched as a new method of a fundraising strategy to upscale the startups. Originally, ICOs were thought to be shining stars of the space but given its number of scams, the address was issued in the form of STO.
The security token is still relatively a new concept. Before we proceed to discuss how to plan a road-map for security token offering (STO), we shall first explain what is STO, its categories are and what are the benefits of launching an STO.
What are security token offerings?
STOs are the legalized version of ICOs. They are the tokens based on cryptographic blockchain technology, representing financial securities such as Bonds, Stocks, Equities, Debts, Real Estate, Art piece, assets etc. through digital tokens. Security Token Offering has become one of the most popular ways of fundraising for blockchain projects. This method offers an optimised approach as compared to traditional crowdfunding platforms.
A security token offering platform offers huge benefits to the investors through STO Platform Development. To name a few, lower issuance fees and enhanced performance. That is why most of the startups have started using STO software or taking assistance from the sto development company to build an STO Website to list their tokens.
What are the categories of Security Tokens?
Security Tokens are being classified into three major types
- Equity Tokens
Equity tokens are issued by the company stock or capital. These tokens display the shares’ value backed by the organization. A company that sells physical goods and services can raise a good amount of capital with equity tokens. Proven, keep control and feel secure with regulations are some of the few benefits of equity tokens.
- Debt Tokens
Debt tokens represent debt assets, for example, real estate. Such types of tokens are issued by the company on the condition of reimbursement to attract debt investors. Composability, universality and OTC trading are some of the key benefits of debt tokens.
- Asset-Based Tokens
Asset-based tokens represent the ownership of different assets i.e. real estate or commodities. The assets are converted to tokens which further can be bought or traded. Accessible, cost-effective, transparency, divisible and immutable are a few of the major benefits of Asset-based tokens.
What are the benefits of launching STO?
Let’s know some of the key reasons why security tokens are more attractive to founders in comparison to the ICOs.
- Higher Success Rate
Security Token Offerings are quite beneficial and have a higher success rate. Where most ICOs have disappeared into the thin air, the track record of STOs shows a positive response. According to the research, STOs have a success rate of 99%. On one hand, where ICOs hardly sold their whitepaper, STOs have built a reputed place for themselves in the market.
Moreover, they are being well-regulated so there are better chances of remaining positive.
- Programmable
One can easily program Security Token Offerings. Compliance protocols can be easily embedded into the actual asset and in case of any modifications, can be revised. There is no limit to the types of rules and systems that a security token can be complied with.
- Woo global investors
Tokens can be easily purchased and traded by investors worldwide. Moreover, security tokens tend to be more liquid as compared to privately held shares, which can be time-consuming and expensive to trade-in.
STOs not only appeal to investors from stock markets or the AIM but also global investors who are looking to make a good return with greater liquidity, want to raise large sums quickly and spread awareness of their business across the world.
- Micro Investments
In Security Token Offerings, micro-investments are possible. This means they allow more and more people to participate in startup ventures that were restricted to accredited investors and venture capitalists.
No comments:
Post a Comment