Security Tokens are one of the best ways to raise funds digitally. If statistics are to be believed 2019 might be the year for STO (Security Token Offering) which might even be bigger than 2018. STO has gained enough momentum on a global level, in fact, it won’t be wrong to say that with every sunset a new token is introduced to the world. There is immense pressure on the companies to strategically market their token effectively and better than their competitors. STO marketing company can help in strategically marketing your token to help it stand out in the surged exchanges.
In the past few months ICOs have drifted from a simple and easy fundraising platform to an immensely debatable and uncertain platform, that can also be used by people with wrong intentions due to lack of regulations and legalities. With a lot of loopholes in the mechanism of ICOS the world clearly needed an alternative for funding. The solutions to the issues related to ICOs might come from Security Token Offerings.
Security tokens are like traditional shares and are regarded as financial securities. You can buy the security token during the offering and then trade, sell or hold the token. The tokens are secured through assets, profits or revenue of the company. The security token is basically the blockchain based asset subjected by the law which might make STO one of the most powerful fundraising mechanisms created till today.
Ideally, the key to successful fundraising is to have a project or platform that matches the needs and demands of the global audience basically something innovative and unique.
If you decide to invest in STO rather than ICO then it is always good to keep in mind the main idea behind the launch of cryptocurrencies. It is important to have a balanced approach which must be clearly evident in your marketing campaign.
What is the difference between STO and ICO?
One of the main differences between STO and ICO is the security regulations and the target audience. Most of the times in case of ICO crowdfunding are done using retail investors. Anyone could be the investors on the digital platform however, there is not much attention given to regulations. On the other hand, the Security Token Offerings do not work with respect to retail investors. For example, if you are going to launch the STO in the U.K. then only accredited investors will be allowed to participate. In the case of STO, the ownership details are secured in the blockchain. This is one of the main reasons how the entire security token strategy is different from an ICO. Therefore the security token strategy targets accredited investors who have knowledge about the regulations and financial strategies.
Moreover, usually the investors for STOs are the ones who have high income or capital. These investors are intelligent and assiduous. Therefore your marketing plan must adhere to such investors.
Why are STOs better than ICOs? Some of the Major Benefits
Tokenization offers a number of benefits some of them being allocation of bigger assets, higher liquidity, lower issuance fee, and better efficiency in the market.
With constant changes in the legalities of the ICOs by the regulatory bodies, STOs definitely offer a powerful alternative. Here are some of the major benefits that Security Token Offerings can provide you over Initial Coin Offerings.
- Regulatory compliance
Though 2017 was the year of ICOs, some of the major regulatory bodies were quick enough to regard many of the ICOs as unregulated security. As a result, many of the ICOs were shut down.
On the other hand, STOs do not have to undergo such problems as the tokens are listed as securities. Therefore it provides a secure way for startups and other projects to benefit from a tokenized security ecosystem by getting compliance from local as well as international regulatory bodies during the very start itself. Therefore, it provides companies a benefit over the ones that are not regulated.
Moreover, the security tokens can be authenticated and regulated to restrict buying or selling of the token. The tokens can also be restricted from trading to any address that is not confirmed which provides a sense of security to the issuers that their tokens will be held by accredited investors only.
Security tokens allow having ownership of a product to some extends which basically helps in minimizing the investments. Because there are many people who are allowed to purchase the stakes so even the assets that have lower values can improve the liquidity on the blockchain.
In addition, STOs also offer 24/7 access to trade and exchange, which allows bringing more liquidity in the market.
In case of security token offerings, the investors get complete information about the issuers. You have complete information about the tokens that have been issued, assured or that have lost credibility. Therefore, it ensures complete security for all of the participants. STOs are designed to provide a completely transparent framework for all of its users.
- Introduction of new investors
STOs offer a number of regulatory benefits; therefore, it provides issues better opportunities and access to a global audience and also allows reaching out to potential investors. The security tokens are regulated which provides a great opportunity for the crypto enthusiasts to invest without having to worry about scams.
- In-built value
Security Token Offerings allow interests in profit sharing, dividends, and many other benefits. The security token offers a legalized right to own the in-built value. The security tokens also provide higher value while at the same time minimizing the associated risks. In simple words, if a token possesses an in-built value then it already has a value without even considering its future value associated with that particular token.
The security token platforms allow you to modify the creating and modify the usage of the security tokens. It is important to convey your projects idea to the potential investors and what better way than using effective STO marketing campaign. Talking about STO it complies with the regulatory bodies making it more secure than ICOs hence we can expect a shift from ICO to STO in the upcoming years.
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