SmartChain LLC
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SmartChain LLC

What is Equity Token Offering? Why is it Preferred to IPO & ICO?

Before heading to the equity token offering, let’s understand ICO!!

ICO was considered to be the de facto standard for raising funds for crypto project and startup businesses, since ‘blockchain’ and ‘funding’ found parallel mentions. For those who don’t know, the process for ICO is simple. In this, an organization can easily offer their investors a new cryptocurrency so they can use it to buy Bitcoin or Ethereum or fiat currency.

It’s observed that the legal protection of potential investors is relatively inferior. And the reason behind this is that the entire process is solely based on mutual trust. There are higher chances that the trust can easily be misused and any member can do fraud.

And this is the reason, when it comes to ICOs, the blockchain technology drastically failed.

What Does Equity Token Offering Mean?

Also known as Equity Token Offering, ETO does create the required balance between the trust of traditional banking and their advantages of blockchain technology.

Equity Token Offering

Advantages of ETO Over IPO

IPO is incredibly slower and takes around six months and one year to complete and the time does vary from company to company. Talk about the other, equity token offering might also consume a similar stretch of time, but it helps to remove intermediaries and upfront costs involved.

From an investor’s point of view, ETO also ensures that the purchase of shares or tokens is easier. The need for intermediaries is completely eliminated because the process of the offering takes place on the blockchain.

Final Thoughts

It’s important for you to find the perfect balance between the values of the past and the technology of the present while adhering to the financial securities of the future. When it comes to funding, equity token offering seems to have achieved as they uphold the legal protection of interest for the investors and simultaneously, incorporate the benefits of blockchain by significantly red

Visit http://smartchain.me/ to learn more about equity token offering (ETO)!

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