What is a securitized token offering?
A Security Token Offering (STO) is a method of raising capital in exchange for value, such as equity, debt, or asset-backed securities. U.S. securities regulation applies to all securities, whether they are digital or traditional, which include digital asset securities (a.k.a. Security Tokens).
Why do companies issue tokens?
Tokenized equity refers to the creation and issuance of digital tokens or “coins” that represent equity shares in a corporation or organization. Tokenized equity is emerging as a convenient way to raise capital in which a business issues shares in the form of digital assets such as crypto coins or tokens.
What is the history of security token offering (Sto)?
The first security token offering was launched by Blockchain Capital (BCAP) on April 10, 2017. The STO raised $10,000,000 in a single day. Since then, STOs have continued to gain traction throughout 2018 and 2019 to this day.
What is an STO and why is it important?
But what is it, and why is it important? What Is An STO? STO stands for security token offering. It is a process similar to an ICO where an investor exchanges money for coins or tokens representing their investment.
What are the advantages of Sto tokens?
STO tokens are beneficial to the issuers, too. There is no need to proclaim tokens as being without any intrinsic economic value, and they typically have clearly defined stakeholder obligations regarding the token distribution, issuance procedure, and secondary trades. Other advantages that come with security tokens are:
What is the difference between an IPO and an STO?
With STOs, you are issued the tokens right in your wallet, so you are the sole holder of your security tokens in your wallet without hiring a custodian, which is cost-effective. #4. Unlike IPOs, STOs can be done in a highly automated way on the blockchain and can run over long periods to lure investors into it.