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 Tokens or digitized assets 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.
At Blockchain App Factory, we are one of the pioneers in Security Token Platform Development. The tokens can be built on your own blockchain, enabling the transactions to be faster and more secure. The company has global access to accredited investors, who will fund by participating in Security Token Offering (STOs).
The Security Token Development team understands the need for the illiquid assets, such as real estate, to be converted into tokenized assets to raise funds for the projects.
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.
Features of Security Token Offering
The digitization of asset allows you to take control of illiquid asset into an equity issuance through a programmable code.
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 Security Token owned by the company would have the said asset liquified, so that it can be bought or sold at its set price.
The U.S Security and Exchange Commission (SEC) is responsible for encompassing the listing requirements of exchanges. STOs are fully compliant with SEC laws.
The Wallet is designed as a multi-signature, multi-device wallet on a blockchain with an elliptic curve cryptography, which makes the storage of funds secure.
Global Capital Investment
The Security Tokens provide trust and reliability for institutional investors to join in the crypto-market, leading to a larger pool of capital investment.
Greater market efficiency
Provide security to investors with its recognizable structure and its affiliated technological advancement, leading to investors gaining trust and their investment in the project.
There are no intermediaries between the company and investors, hence reducing the cost of commissions for the middleman.
The Security Tokens are developed on your own blockchain, thereby giving full control to you. No more worries of gas prices and changes in protocol or regulations.
The dividends from the investments will be automatically transferred to the investor’s wallet. The wallet is secured on the blockchain with Elliptic Curve Cryptography.
Similar to the shareholders, the security token holders have the right to vote in the decisions of the company, hence ensuring transparency.
Profit share rights
You can share the profits of the company with the token holders in the form of tokens, by directly depositing into the investor’s wallet.
The company buys the shares from the investors at the market price, hence re-absorbing part of the ownership distributed to the investors.
The company’s cash flow per share is on the smart contract, making it immutable. The company can be transparent about its earnings, per token, with its investors.
Holdings in another fund
The security tokens can be deposited into a fund or with a custodian service who can handle or hedge the funds in an efficient way.