A Security Token Offering (STO) is the first opportunity that the public can invest in security tokens of a certain company. STOs are much like Initial Public Offerings (IPOs) of stocks and like Initial Coin Offerings (ICOs) of cryptocurrencies. Security tokens are real-world tradable assets that have been digitally represented on a blockchain. They basically act as a bridge between legacy finance and the new digital fintech world, taking benefits from each. Security tokens can be compared to securities and are subject to the securities legislation. To learn more security tokens and their benefits, check out our security token guide here.
STOs offer unique advantages to both the businesses issuing them and to the investors. On the business side, STOs allow the opportunity to raise funds in a regularly-compliant manner from a wide range of investors all over the world. Compared to traditional securities, security tokens provide better efficiency, more liquidity, and improved interoperability, which translates to lower banking and brokerage fees.
As for investors, STOs offer legitimate securities backed by actual assets protected by government regulation. As a result, STOs eliminate the possibility of fraud, a big problem that has plagued the ICO trend. This increased credibility and trust allows STO investors to have more confidence that their investments are sound and will make them positive returns.
Best of all, STOs allow the public to take part in fractionalized ownership of high-value assets that the vast majority could never afford to invest in before – including real estate properties, which is exactly what CROWDLITOKEN is offering in our upcoming STO.