There is a 90% drop in the number of people who invest through Initial Coin Offering (ICO). The reasons are fraudsters, exit scams, lack of regulations, and pressure from several government agencies like SEC. But, some strong alternatives like Security Token Offering (STO) have come to build the investors’ confidence.
Security token offerings are a modern way of trustable fundraising method which would replace the traditional IPO method. It is believed that crypto coins and tokens gain the confidence of the investment market and will see a serious shift with the development of STO. As government agencies back STOs, it becomes a reliable investment option than ICO.
STOs are an opportunity for everyone to a more accessible, affordable, and secure way to invest in an entity. If you are the entrepreneur or startup who wished to offer a Security token? Get expert consultation from Blockchain App Factory, an experienced STO development company, which also offers various other blockchain-enabled services
Let’s see the top 5 benefits of Security Token Offering:
VALUE
Security Tokens are often mistaken with Utility Tokens. Unlike utility tokens, which provides exclusive access to service or products in the blockchain network and do not possess any other value on their own. While security tokens are financial instruments which designed token assets, that gives ownership rights to:
- Company Property or Share
- Dividend Payments
- Credit Commitments
- Company property or share
- MORE LEGITIMACY
STOs are most often misinterpreted as “updated versions of ICO,” which is entirely wrong. Fundraising through ICO via the use of cryptocurrency is like sourcing capital, in return for pre-sold rights to access the service when the product is ready.
The key issue with Initial Coin Offering is the whole atmosphere lacks any regulation and no protection to investors and the investment made.
But it is not the case with STOs, some form of guidelines completely regulates it. It is a Tokenized Securities and some traditional laws applicable to that. It means all companies that apply for STOs should comply with government rules and regulations.
- 24/7 MARKET ACCESS
All the traditional exchanges and stock markets are tied to strict pre-defined working hours. Even when any important matter happens when the market is closed, none can make a yield out of it.
But Security tokens are available 24/7. So, one can trade assets round the clock and have a chance to any new updates or events in a timely manner.
- TRANSPARENCY
Blockchain technology provides a decentralized and uniform method of data tracking data and tampering with it due to its immutable ledger. This infrastructure helps to store the ownership of securities in a fully transparent and secure way.
- MORE LIQUIDITY
Blockchain technology helps to divide the traditional illiquid assets into asset tokens and these tokenized assets, such as art, real estate, or old monuments. Tokenization provides property access to average investors on big projects, which were traditionally owned by the people with large capital.
CONCLUSION:
Security Token Offering is growing in popularity among young startups and becoming an interesting alternative to traditional IPO and crowdfunding. STO offers a quicker, cheaper, and more flexible way to raise necessary funds for project development.
If you are the entrepreneur or startup who wished to offer a Security token? Contact Blockchain App Factory now for quick and reliable service.
Tokenization has turned out to be one of a couple of developing innovations to help with Visa security and PCI consistence.
security token offeringTokenization is an endeavor to alleviate the dangers characteristic in putting away card information.
Similarly that start to finish encryption secures information in travel, tokenization ensures information very still.
With information in travel is progressively focused by loathsome programmers (and standing out as truly newsworthy), it is not entirely obvious the way that information very still can be similarly inclined to robbery.As a procedure, tokenization replaces card information with a one of a kind "token" that goes about as a source of perspective pointer to that charge card information.
Utilizing this rationale, a Visa exchange sends this reference pointer token along the installment chain.
At the preparing end of the installment chain, the token is confirmed and the exchange handled, all without having uncovered any delicate cardholder information to the different systems along the installment chain.
ICO can be said as the mix of customary strategies and propelled systems.
The methodology is same as opening a financial balance, and afterward displaying it on a specific site page to individuals with the goal that they may send cash.Beginning mint piece offering (ICO) is fundamentally an unlawful method to gather crowdfunding by means of different cryptographic forms of money (fiat monetary forms in a couple of cases) and is worked by digital money associations to acquire the capital subsidizes required to execute the undertaking.
While in ICO, the speculators buy coins of the organization that can increment in worth if the business gets enhanced.The primary token deal, for example an ICO was directed by Mastercoin in July 2013.
In May 2017, there were approx.
20 contributions, and furthermore an ongoing internet browser Brave's ICO produced about $35 million in only 30 seconds.
Till the finish of August 2017, an aggregate of 89 ICO coin deals worth $1.1 billion had been directed beginning from January 2017.Speculators send Bitcoin, Ethereum or some other digital money to the given location and afterward in return, they get new tokens that can profit them enormously if the venture gets hit.ICO is essentially directed for digital money put together activities which depend with respect to decentralized method.
Facilitate a safe investment experience by starting a Security token offering.
The benefits include access to real monetary value through profits and dividends, sufficient liquidity, complete transparency due to the immutable blockchain network, and fast processing of transactions enabling quick settlement of funds.
