Security token offering (STO) is a type of fundraising that is performed with a company offering tokenized securities. The defining feature of security token offerings is in its definition. Stocks, bonds and managed property trusts are another examples of securities.
Essentially, a security token is a cryptocurrency-based asset that derives its value from some other asset that it represents. For example, security tokens can represent real estate or gold but, most importantly, they can represent shares and securities or their alternative.
The tokens offered during an ICO are called utility tokens, their value is based on demand for the product or service which requires the tokens. They are not normally legally-binding contracts and do not represent any underlying assets.
- Will 2019 be the Year of the Security Token Offering (STO)?
- How big is really the STO market?
- Which country has organized most STO?
- How much can you expect to raise with a STO?
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