The blockchain is a core technique when it comes to supporting crypto assets like Bitcoin, Ether, security tokens and utility tokens. These crypto-assets have an enormous capacity to bring a complete transformation in the financial services marketplace. Many people are already familiar with utility tokens, and the security tokens are relatively novel concept. In this post, we shall elucidate the launching process of an STO.
A token, when subjected to federal security regulations, is known as a security token. Such tokens can derive its valuation from other external and tradable assets. Some of the examples of security tokens are equity tokens, debt tokens, utility and asset-backed tokens.
The STO Launching Process can be bifurcated into the following stages:
Preparation
Pre-STO
STO for investors
Post-STO
Coming up with an idea for the security token and consulting a legal advisor and deciding the modus operandi for the token to gain value. The token’s value can be determined through the three principles:
Role
Purpose
Feature
Every role defined for the token has a specified purpose against which the features can be apprehended depending on the need of the business.
The regulations to be followed in the process of creating a security token. For the token to be considered as a security token, it must qualify the Howey Test determined by the US Supreme Court. Howey test can be segmented as 3 independent criteria that must be fulfilled for creating a security token. They are:
An investment of capital
In the identical enterprise
With the expectation of profits from the struggles of others.
If not, then the token will be deemed as a utility token. The regulations for the security token in diverse for every country. The issuer will have to adhere to the legislation of the respective countries in which he plans to issue the tokens.
The next step is selecting the correct security token platform. Security tokens require unique infrastructure and a new approach. It is a cumbersome process; therefore, you need to have a piece of thorough knowledge about the security issuance platforms.
Given below is the list of the top security token platforms to launch an STO.
Polymath
Harbor
Securitize
Securrency
Swarm
Writing a whitepaper
An STO whitepaper is the most critical marketing document of the product and if miswritten, can destroy it even before it goes to the market.
Segments to be covered while writing STO whitepaper:
Assets and different type of security associated with the token
Business Model
Industry Overview
Legal Disclaimer
Product Details
Team members and advisory
Technical Architecture
Tokenomics and Token Usage Details
Contemplate hiring an adept Security Token Offering Whitepaper Writer to market the product efficiently.