Why STO Could Be Next Year’s ICO?
Dec 28, 2018 Comments (0)
Security Token Offerings (STO) is one of tech perception as initial coin offerings along with diversified tokens required by an asset. It is a business for something valuable accessible tokens.
ICO’s are utilized by multiple startups & businesses across the world and wisely controlled by crypto mining. These tokens are similar to an organization sold to shareholders in IPO transactions. The money is returned to previous investors if ICO is not able to cope up with minimum funding requirement. ICO is estimated to be useless if the fund's requirement does not meet within a promised frame.
How STOs Are the Key Solution to the Security Threat
Now, STOs, or Security Token offerings are taking over the scene as the solution that investors were desperately seeking. These are economically safe because of how they imitate the mechanism of conventional shares. Unlike ICOs that can disappear into thin air, STOs give crypto investors certain shares and rights to the host company.
Moreover, the government now views STOs as a possible answer to safer crowd funding for new types of cryptocurrency and regulation as to where stakeholder money is going. This increase in transparency is since, to register for an STO, companies will must fill out paperwork and documentation associated with registering for an Initial Public Offering.
This legal process will require companies to cough up better and confirmed details about the coin and proven facts about how it is different from the rest. In simple terms, it will not be as easy to acquire an STO as it used to be with ICOs.
Why STOs Will Work
Many companies will undoubtedly seek this simple solution. Companies such as this offer them a much better alternative to getting into the specifics of registering for an STO. New tokens in development that want to grow and generate funds will have to approach such projects so they can gain traction among interested investors.
ICOs are popular due to the lack of regulation. Ironically, the same feature led to the demise of ICOs in the cryptocurrency market. ICOs were also the cause of great tension between the startup companies and the SEC. Hence, Security Token Offerings are a great way to ease those tensions. They retain the premise of cryptocurrency while implementing the aspect of regulation.
You should consider STOs a viable option if you want to invest your money in startups. As things stand, the ICO invested capital will shift towards Security Token Offerings. However, startups in this scenario will have to then choose between a standard service such as that of Polymath, or something more specific and customized.
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