{"id":646,"date":"2018-07-30T14:06:30","date_gmt":"2018-07-30T14:06:30","guid":{"rendered":"https:\/\/blockchainappfactory.com\/blog\/?p=646"},"modified":"2020-10-12T14:53:01","modified_gmt":"2020-10-12T09:23:01","slug":"security-token-offering-the-next-trend-setter","status":"publish","type":"post","link":"https:\/\/www.blockchainappfactory.com\/blog\/security-token-offering-the-next-trend-setter\/","title":{"rendered":"Security Token Offering – The Next Trend Setter"},"content":{"rendered":"

 <\/p>\n

The digital world of blockchain has started moving from ICOs to the concept of STOs. As with any new technology, the movement of ICOs to STOs is a natural evolution of stable cryptomarkets. The cryptocurrency bubble of 2017 has burst in the first quarter of 2018, with more than 800 cryptocurrencies being dead and deemed to be fake. Investors have lost around $3.8 billion dollars by investing in shitcoins & scams. <\/span><\/p>\n

2017 Year of ICOs \u2192 2018 Year of STOs<\/b><\/span><\/p>\n

The latter part of 2018 is expected to witness the take-off of tokenized securities. The gamble on utility coins seemingly falling apart, as Bitcoin has lost 70% of its value by mid-2018. SEC will protect ordinary investors and prevent frauds, pump & dumps, and other scams. Security Tokens will increase compliance requirements, such as disclosures and filings, and help meet expectations of token-buyers. The legal precedents of traditional securities will apply to security tokens and subsequently protect token buyers\u2019 rights and expectations. <\/span><\/p>\n

Security Token Offering <\/b><\/span><\/p>\n

Many tokens or coins, including BTC & ETH, do not have any widespread utility in the business ecosystem. However, in many projects, the coins are like shares in an IPO. These are called Security Token and released with\u00a0Security Token Offering (STOs)<\/strong><\/a>. A security token is backed by tangible assets, such as profits, revenue, or any other collateral. The positioning of STOs is that it is <\/span>not a<\/span><\/i> utility token, but a security token. <\/span><\/span><\/p>\n

The cost of Security Tokens, abiding by regulatory compliance and regulatory frameworks, is cost-effective and more efficient with reduced interference from regulatory authorities, such as the SEC. \u00a0<\/span><\/p>\n

Security Token Trading Platforms<\/b><\/span><\/p>\n

The question that arises when any ICO has been launched and the coin or token has been purchased is <\/span>\u2018Where do I exchange it?<\/i><\/b>\u2019. The secondary trading and liquidity are reduced, as securities are subjected to restrictions and cannot be traded with ease like Utility coins. <\/span><\/span><\/p>\n

Exchanges, like OpenFinance Network, offer an all-in-one service alternative asset trading platform. They are open source with trading, clearing, and settlement services. In addition, the liquidity and asset transfer efficiencies are streamlined with the fully compliant trading of privatized security tokens. <\/span><\/p>\n

The Integration of Markets<\/b><\/span><\/p>\n

The merging of traditional financial markets with the crypto-market will contribute to the betterment of the investment market on the whole. The storm of peaking and subsequent drop of the crypto-market in late 2017 and early 2018 have washed away the blockchain landscape. When the storm had cleared, there were only a few projects with real repute and true value. The real use case and ability to denominate value turned Security token into a hybrid model with blockchain and it\u2019s accompanying benefits.<\/span><\/p>\n

Key Takeaways <\/b><\/span><\/p>\n