Security Token Offering Services
With ICO’s being used for pump and dump schemes with no path to redemption, it is becoming increasingly difficult for investors to establish trust and invest in any cryptocurrency project. This is where Security Token Offering comes in. Security Token or investment tokens are financial securities that are compliant with SEC regulations. They provide the investors with an array of financial rights, such as equity, dividends, profit share rights, buy-back rights, and much more. All the rights are written in the smart contract, and the underlying tokens are traded on the blockchain.
Difference between Security Token and Utility Token
A Security Token is backed by external, tradeable assets that give the power or authority to the investors, as they are the embodiment of shares of company stock.
A Utility token is not designed to be an investment; it represents the future access to a company's product or service, and it gives the token holders no rights or stake in the company.
Benefits of Security Token Offering
Fractionalization of larger assets
The STO is the representation of a company’s stock, so the concerned company can break their more substantial assets and provide it as STO to the token holder.
Increase in Liquidity
Every STO owned by the company would have the said asset liquified so that it can be bought or sold at its set price.
SEC laws compliant
The U.S Security and Exchange Commission (SEC) is responsible for encompassing the listing requirements of exchanges. STOs are fully compliant with SEC laws.
Lower issuance fees
For investors who need to get STOs to invest and gain returns, they can get it from any company that issues STOs under lesser issuance fees, when compared to ICOs.
Capital investment pool on the Global basis
As STOs provide trust and reliability for the investors to invest in any project, this advertently leads to a larger pool of capital investment for the said project.
Greater market efficiency
STO provide security to the investors with its recognizable structure and its affiliated technological advancement leading to investors gaining trust and their investment in the project.
With STO you can avail an array of benefits
- Voting rights
- Profit share rights
- Buyback rights
- Cash flow
- Holdings in another fund