As investors we rightfully expect that our investments are secure. Over the years there appeared many initiatives aiming to guarantee that kind of safety — also of the funds themselves. With the advent of digitalization, investors big and small found themselves needing quicker and safer information technology-based projects streamlining communication and increasing liquidity.
The three-letter acronym ICO stands more for organizing principles than a truly reliable system. Initial Coin Offering is all about fundraising to help start up or develop blockchain technology-based projects. As part of these fundraisers, their organizers received cryptocurrency from the investors who in turn received project-dedicated tokens serving as project-specific currency. The idea soon took off and ICO became immensely popular with the industry growing and things looking up. The decentralization, transparency and ease of use appealed to many. Anybody could start and ICO without any oversight.
The Problem with Initial Coin Offering
One could only imagine the giddiness with which your typical libertarian looked at the unregulated ICO. Cracks, however, soon started to appear. Where capital is plentiful, fraudsters swoop in and that is what sadly happened with ICOs as well. This led to investors becoming increasingly unwilling to invest in ICOs having seen the downward trend in associated securities and stocks. Many tokens proved to be valued much lower by the market than their issuers which, coupled with increased regulatory scrutiny from governments, effectively scared most of the investors away. Because a large percentage of the projects never amounted to anything but words on paper, no new services were offered and some of the teams disappeared with the money, it became clear that better regulation was in order, and soon. It became imperative to protect investors and the honest project teams. Enter STO.
Tokens As Secure As Securities Themselves
Security Token Offering is also based on selling tokens but these tokens are more like securities than just tokens allowing you to use the services of a company. This new approach to fundraising drew in more serious investors through its increased security. European Union law began mandating that constituent countries introduce regulations to the way the fundraisers were handled. Informational materials published by the token issuer concerned from that point onward securities that represented the public offer. The tokens themselves were still issued on blockchain, increasing the security of investment. Adding to all that, STO was meant to only issue tokens once the necessary infrastructure was in place to trade them. These trading platforms were mandated to have regulatory supervision and a licence to facilitate the aforementioned trades. STO tokens have greater liquidity and are available to anyone except for the citizens in jurisdictions where ICO was banned.
Finally — The Answer
Another system providing an alternative way to fundraise for a project is IEO. Initial Exchange Offering only allows verified users of a crypcocurrency exchange to purchase tokens. There is no public issuance of tokens where the funds received from selling tokens end up in the project team wallet, as is the case with ICO. IEO is superior to ICO and STO because of the trusted third party — in this case the exchange — that oversees the administration of the system and maintains responsible conduct of all involved. A project team must meet a set of requirements if they wish to issue their tokens using their chosen exchange. The exchange runs a detailed background check on all the projects that wish to use it as their trading platform since nobody wants financial losses from malignant actors. Having satisfied these requirements, a project is able to fundraise as part of an IEO.
Marshal Lion offers an easy-to-use, clearly organized digital platform for any exchange client and potential investor. The model favored by Marshal Lion promotes greater trade liquidity owing to the large number of users that cryptocurrency exchanges usually enjoy. This model also promotes security through neutralizing the risk of price manipulation. Tokenization is all about transferring the value of a given trademark, company or a smaller asset to the digital world using the blockchain technology. Once implemented, this process makes financing projects and investing in them substantially easier. Blockchain itself allows everybody involved in a project to see relevant information about it and transcends all barriers including the geographical ones. This opens a project up to potential financing from all over the world. Marshal Lion is building an innovative and reliable model of company-client interactions through IEO. This model provides ease of use, convenience and transparency for all investors. Marshal Lion takes the best of what the stock market has to offer and fuses it with the transparency offered by the revolutionary blockchain technology. The future is here.