Bitcoin challenged the fiat currency the moment it stepped into the digisphere. The technology behind bitcoin and other crypto assets, Blockchain, disrupted decade-old industries. It is one of the most promising technologies that support crypto assets such as Ether, utility tokens and security tokens.

A few years later, the security tokens became the next big ‘talk-of-the-town’ in the blockchain revolution. They were launched as a new method of a fundraising strategy to upscale the startups. Originally, ICOs were thought to be shining stars of the space but given its number of scams, the address was issued in the form of STO.

The security token is still relatively a new concept. Before we proceed to discuss how to plan a road-map for security token offering (STO), we shall first explain what is STO, its categories are and what are the benefits of launching an STO.

What are security token offerings?

STOs are the legalized version of ICOs. They are the tokens based on cryptographic blockchain technology, representing financial securities such as Bonds, Stocks, Equities, Debts, Real Estate, Art piece, assets etc. through digital tokens. Security Token Offering has become one of the most popular ways of fundraising for blockchain projects. This method offers an optimised approach as compared to traditional crowdfunding platforms.

A security token offering platform offers huge benefits to the investors through STO Platform Development. To name a few, lower issuance fees and enhanced performance. That is why most of the startups have started using STO software or taking assistance from the sto development company to build an STO Website to list their tokens.

What are the categories of Security Tokens?

Security Tokens are being classified into three major types

• Equity Tokens

Equity tokens are issued by the company stock or capital. These tokens display the shares’ value backed by the organization. A company that sells physical goods and services can raise a good amount of capital with equity tokens. Proven, keep control and feel secure with regulations are some of the few benefits of equity tokens.

• Debt Tokens

Debt tokens represent debt assets, for example, real estate. Such types of tokens are issued by the company on the condition of reimbursement to attract debt investors. Composability, universality and OTC trading are some of the key benefits of debt tokens.

• Asset-Based Tokens

Asset-based tokens represent the ownership of different assets i.e. real estate or commodities. The assets are converted to tokens which further can be bought or traded. Accessible, cost-effective, transparency, divisible and immutable are a few of the major benefits of Asset-based tokens.

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