Continuation to STO Understanding…
To Continue from where we left last time, here is some more about STOs.
What Are The Benefits Of STO?
During the 2017–2018 ICO mania, many token issuers have sold investors bags of tokens without any economic rights, value or regard for existing securities laws.
Security token offerings are meant to be a regulatory compliant alternative to regular token sales. They aim to correct perceived inequalities on the investor side, such as granting security token holders rights to dividends or other predefined revenue streams.
STO tokens are beneficial to the issuers, too. There is no need to proclaim tokens as being without any intrinsic economic value, and they typically have clearly defined stakeholder obligations regarding the token distribution, issuance procedure, and secondary trades.
Other advantages that come with security tokens are:
· Credibility. ICO space, these days, is believed to be a chaos, to say the least. Many people were scammed, even more projects did not deliver what they promised, and most investors remain stuck with useless tokens. In contrast, STOs follow all regulations and allow blockchain and crypto currencies to restore some credibility.
· Improving traditional finance. While traditional securities are slow and expensive due to their old infrastructure and layers of intermediaries, security tokens facilitate services at a lower cost.
· Programmability. Security tokens can be programmable and enforced by smart contracts.
· Free market. Borders or local regulations do not limit security tokens.
· Many investors. Traditional security deals involve only local individuals, while security tokens are open to anyone on the internet.
· Reduced institutional manipulation. Free and open market with fewer mediators should reduce market manipulation, at least in theory.
· More liquidity. Security tokens will trade on specialized security exchanges so investors will have a convenient way to liquidate their assets.
Most importantly, security tokens and STOs allow companies to create a new set of stakeholders with novel permutations of debt, equity or contributor roles.
As such, security tokens are generally considered an improvement over ICOs. They address the fundamental flaws surrounding utility token sales and have the potential to improve traditional securities.
Of course, ACO again comes handy here when you talk about launching your own STO Project for raising funds….how?? Just visit our website www.acoplatform.com to know how we can help get your STO project worth attracting more and legitimate investors or just drop an email asking for our services catalog to info@acoplatform.com and we will be delighted to partner with you.
