Launch your Own STO with Blockchain App Factory
Though the U.S. Securities and Exchange Commission has regarded the use of utility tokens as a dicey situation leading to unregistered broker-dealer situations, the hype encompassing security tokens has not reduced.The security token market is transforming at the pace of lightning. However, it is still in its days of infancy. Besides, there are many ambiguous areas when we consider the market for token buyers as well as the business model adopted by startups today. Not to mention that entrepreneurs are also wanting to raise assets through regulated blockchain.The entire process of setting up a Security Token Offering (STO) is confined to two major types of tokens:Utility TokensThese type of tokens are not investments and do not give token holders any rights or stake in a company. Simply put, utility tokens represent future access to the products and services of a company.Security TokensSecurity tokens are different from utility tokens in the way that they are a manifestation of the company’s stock shares. They are supported externally by tradeable assets which empower investors by giving them more authority.Having understood the different types of tokens, let us explore in detail about the various benefits ofSecurity Token Offering.
- More Compliance as it can be hard-coded
- Fractional ownership
- Attracting new investors at a global level
- Better flexibility and scalability for business owners
- Low barrier for entry