Security token offering services
Just type Security Token Offerings (STO) or launch STO in Google right now and you will be bombarded with n number of news articles and links. This very moment people are talking about how it STO would change all industries in relation with financial transactions and investments. First the cryptocurrencies change the world of finance as we know, followed by smart contracts and utility tokens. Now, Security Tokens are the hot topic. Wondering what a Security Token is and how it is appealing to the founders? We have the right answer for you.
Security token, what is it? Why it attracts founders and investors?
Security Token Offering platforms allow investors and founders to invest in better projects. To understand what a Security Token is, first you have to understand what are securities.
Securities are financial assets that can be traded between peers in terms of debentures, shares/stocks or bonds. Through these trades, investors either become a part of the company or just get a share of the profit from the revenue generated by the invested company. Most of the companies and enterprises including governmental agencies use this as a method to raise money to make investments.
Now, if these securities are traded in terms of crypto tokens instead of debentures, shares or bonds, it is known as a security token. Tokens make investors job easier to receive profits in terms of interest or dividends through tokens. Also, it makes the job of people looking for capital investments to find investors quickly. This is because unlike traditional assets, tokens have quick liquidation capabilities. Peers can easily sell assets through token to generate profits. This is one of the important reasons why security tokens are appealing to founders.
Following are some of the reasons why founders are attracted towards security tokens.
Engages in Bootstrapping
Security tokens play appropriate roles in governing the product and asset usage along with the rightful distribution of the voting, accessibility and product/asset ownership. It helps founders, investors and small and medium enterprises (SMEs) to generate capital and increase the viability of the new product, project or start-up.
Increases The Value of Exchange
Creation and grabbing opportunities for a better economical environment. Security tokens help in buying, spending and rewarding the people involved in the trade. It also encourages investors and founders to participate in the trade actively or passively.
Easily Liquefiable
Start-ups and declining business enterprises can quickly and instantly sell their assets, equities and shares with potential buyers with the help of security tokens without consuming large amounts of time. Security tokens provide everyone around the globe with the accessibility to quickly liquidate assets with the ease of finding buyers and sellers. The notable key point here is, trading with security tokens is 24/7 open to everyone.
Automates All Regulations
The American trading law enforcement SEC has a set of regulations and security tokens follow every standard and precedents behind every single law. With blockchain, security tokens can be used for trading even easier and quicker since blockchain eliminates all central authority.
Reduces the process of crypto fundraising
As a reason of automation of securities, the entire financial market of trading becomes cost-effective, secure and faster in terms of buying and selling assets. It removes the traditional back-end third-party control and thus it leverages business operations with smart contracts too.
Frictionless transactions
Say goodbye to multiple foreign currency exchange problems. Security tokens puts a full stop to the huge process of changing currencies for different countries accordingly. With security tokens, there is just one medium that all users will use for transaction and that is security token. This speeds up the process of payments and transaction.
Security token also acts a TOLL
Security tokens can as function as a payment toll gateway for any particular system that your business requires. For example, to provide access to decentralized supercomputer, you can allow the system infrastructure to receive security token as a mode of accessibility to the benefits of the system.
Platforms that use security tokens
As of today, there are few companies who develop and use security tokens for all of their operations and transactions. Some of the security token platforms of today are Polymath’s ST-20 and Harbor’s R-token. Using these platforms, you can easily convert your assets into blockchain based security tokens in no time.
Conclusion: Trading with security token brings better income for founders and investors
Unlike utility tokens, security tokens allow users to increase the profits by driving up the value of their assets. Thus, bringing more income and profit generation to founders and investors. Every business model has the possibility to create limitless opportunities with the ability to quickly liquify assets with security tokens. Yet, it is important to understand the functionalities of security token offerings and its performance relation with your business operations before you make decisions of investing in projects with security tokens. Good Luck.
What do you think are the other attractive qualities of security tokens that pull founders, investors and users towards it? Let us know.
