How much does the Security Token Offering cost?
Crypto crowdfunding
The rise of digital currencies in recent decades has changed the perspective of fundraising for the better. More people are showing interest in participating or investing in crowdfunding campaigns courtesy of cryptocurrencies. Cryptocurrencies tend to attract more investors because of its tendency to give away rewards for investors based on the invested volume. Another factor that plays a major role in attracting users and investors towards cryptocurrency crowdfunding is the implementation of blockchain technology.
With the inclusion of blockchain technology and smart contracts into the process of crowdfunding campaigns, the investors are provided with a certain degree of security beforehand. However, as things progress, people are slightly concerned about the authenticity of the crowdfunding as the digital currencies tend to be more volatile. Therefore, in order to address that issue the crowdfunding campaigners introduced a completely regulated fundraising aspect in the name of Security token offering.
What is Security Token Offering?
Security Token Offering is hailed as one of the most popular crowdfunding methods among all the digital fundraising models. Startups who are looking to raise capital for their business can raise money through security tokens. Primarily security tokens are issued under the authority of blockchain which represents a stake, an asset or an entity. These assets can be a replica of a real-world asset like shares, bonds, commodities like gold, silver, crude oil and other equities.
In order to issue security tokens, it is mandatory to follow and proceed according to the SEC regulations. Doing this would provide the issuers with complete ownership and the tokens will be highly secured. Apart from these, security tokens are created through integrating all the special features in a smart contract. The SEC would approve for distributing security tokens once the smart contracts are verified. Having said that, according to the geographic location, the rules, regulations as well as guidelines would change circumstantially. Barring the security, there are several uses for implementing security tokens.
Benefits of Security Tokens
Several startups as well as established companies who are willing to distribute their shares to potential investors would do that in the form of security tokens. They make use of the security tokens mainly because they come with the help of blockchain. Apart from that, some vital uses are as follows:
Transparent
By using public ledger, you can get the benefit of complete transparency even though most of the participation would be anonymous. With that being said, every single detail can be accessed using the public ledger at any given time. The overwritten smart contracts that manage tokens along with holdings and issuances can also be viewed by anyone.
Divisible
Some of the highly prized assets like art and real estates can be offered to investors. This is possible because, through tokenization, these assets can be made more appealing as well as affordable like never before. This is due to the divisibility feature which makes the asset more affordable than its normal nature.
Quick to settle
Clearance and settlements normally would take up more time while transferring assets from one place to another. However, when the process involves blockchain technology, the entire process is automated. This ensures that reassigning ownership can be completed in an instant manner.
No downtime
Conventional financial markets are bound to have a fixed period for conducting business on a regular scale. In that regard, these markets are normally open on weekdays and closed over the weekend. Contrarily, digital digital tokens can access and offer services round the clock.
Developing a crypto fundraising campaign considering all these uses is the major reason behind its popularity among emerging entrepreneurs. Additionally, it is also important to make sure you get the development procedure spot on.
How to launch an Security Token Offering(STO) Platform?
Developing a fully operating Security Token campaign is not a tough gig to pull off. Apparently there are several steps to be followed before launching an STO plaform in a completely hassle-free manner. The Security Token offering development steps are,
- Initially, come up with a perfect business plan which could play a pivotal role in making your project a huge success. Make sure to come up with an idea that works in a way that it is capable of attracting a large sum of investors across the crypto ecosystem.
- Ensure to comply with all the rules and regulations with the local authorities. In addition to that, you should also disclose legal compliance of the local government for launching your STO platform in a seamless manner.
- Have a well-detailed white paper beforehand for the investors to skim through. A whitepaper can be interpreted as a technical document which encapsulates all the details of an Security Token Offering project. A perfectly put together STO whitepaper should include the vision and the mission of the project, roadmap, features & details of the token along with the terms and conditions of the STO project.
- Make sure to hire a team of legal advisors for handling all the legal entities related to the fundraising project.
- In order to develop a successful STO platform, you have to make sure to give the reins to a team of professional developers coming from a highly reputed STO development company. By hiring a bunch of seasoned developers you can get assistance in each and every little detail which has to be followed to launch a highly effective STO platform without having to face any hurdle.
- One more important aspect to take into account while creating an Security Token Offering campaign is to fix the token standard for your tokens. There are several ranges of tokens that are available for creating security tokens using prominent blockchains like Ethereum, Tron, Binance smart chain, etc. ERC1400 is probably one of the most popular token standards used for creating a security token. Security tokens come in various types like debt tokens, equity tokens and asset tokens.
- In order for you to attract a huge amount of investors, you would need a well crafted STO website. Make sure to have a professionally designed STO website for the project to be successful.
- Marketing and promotions are a very important part of the project for reaching out to a wide range of audience. Make sure to promote your STO campaign through several marketing strategies like social media marketing, email marketing, etc.
Developing an STO platform requires detailing all the way till the last phase of development. When talking about step by step development, the most important thing that might pop up is the cost of STO which is associated with the development. Security Token Offering cost can be influenced by multiple factors based on the type of development.
Factors determining the Security Token Offering Cost
When talking about setting up an STO campaign, the primary aspect to consider before getting going is to forecast the Security Token Offering Cost. In that regard the below listed are some factors that are capable of playing a huge part in determining the Security Token Offering Cost.
Whitepaper
Just like conventional ICO, whitepaper is an indispensable part of an STO project. You need to make sure that it is drafted by a technically sound writer or a team. Make sure that the whitepaper represents your project in a unique way which is rather convincing for everyone. It also provides an insight regarding the cost to launching an STO.
Token standard
It is very important to fix a token standard that will make your project more feasible for fundraising. The beginning of time unveiled ERC20 as the default standard which is still the most preferred token standard. With that being said, there are several other protocols that are introduced lately which are preferred to by many project owners.
Token standardSmart contract
Even though smart contracts do not affect the price quotation to a great extent, its integration is very essential for proper transaction execution. Smart contracts affect the business for the better and it is very important that it is designed to be bug-free.
User admin board
In order to run an excellent business, it is very essential to have a feature-rich administration board. You can almost maintain all the aspects related to your business with better security management. In that case, transferring tokens on behalf of contributors and earning through them becomes relatively easier.
Legal aspect
When dealing with Security Token Offering, it becomes quite obvious that you should have a proper legal consultation since it directly deals with a large sum of financial assets. Along with taking care of the legality, you will also need to make sure that the project does pretty good from a marketing perspective. Ensure to verify each and every procedure like KYC and AML for its authentic proceeding.
Security and testing
Every single platform will require a review to be completed before airing online. It is also applicable with Security Token Offering $7k projects as well. It is an essential process for detecting glitches and coding issues prior hand. Multiple testing only ensures that the problem is completely bug-free and is robust enough to counteract any technical hiccups.
The above mentioned are some of the vital factors that can make a difference on how you want your STO campaign to pan out. Now that you have seen the factors determining Security Token Offering Cost, based of such factors the approximate cost to launching an STO platform may range from $9000 — $14000 it is also very crucial to decide on who to hand over the ultimate job of developing such a profit reaping business model.
Final thoughts
Driving a full-fledged STO campaign is never a walk in the park and you need to bring in your A-game if you are to reap rewards through it. You need to have a tightly knitted strategy and make sure to stick by it until the project is released. Be very sure to have a bunch of specialists around you for different matters. Handing over the reins in the hands of professional experts is a must for getting success with the project. In that regard, I highly recommend you to get the service of the best STO development company from the crypto ecosystem. Having the support of an elite team of experts would give you a technical edge over your contemporaries.
