STO stands for security token offering. It is a process similar to an ICO where an investor exchanges money for coins or tokens representing their investment. However, unlike ICOs, STO’s take it a step further and distribute tokens that fall under the status of securities.
As such, security token offerings distribute securities. These are tokens that are fungible, negotiable financial instruments with attached monetary value, like a part of property or company. Types of STO methodologies, we develop are listed below.
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.
Initial Exchange Offering (IEO) is a fundraising mechanism where the issuers create tokens for their projects and raise funds using the user base of the exchange. IEOs are an agreement between the fundraising company and crypto-exchanges like IDAX, LATokens & Binance, with some pre-conditions.
Fundraising through IEO is considered safer by the investors since the crypto-exchanges would ensure due diligence before accepting any project. Initial Exchange Offering is a new booming trend and has the potential to change the way we look at token-based fundraising.
This fundraising option gives the investors the confidence of liquidity while giving the projects a ready-made user base to target their marketing efforts. Also, it reduces the burden of the KYC/AML process on the issuers as the exchanges take the responsibility of verifying investors and projects.
Our history with ICOs have helped us gain invaluable experiences in marketing to the crypto-community and investors. As an IEO Marketing Company, we have an expert team with creative designers, engaging content writers and driven SEO analysts making your project viral in the market. Our offerings has ensured that our clients are able to reach their softcap thereby kick starting their projects with ease.
The main advantage of going with IEOs is the user base of the exchanges where the projects are listed unlike in ICOs where the cost of marketing is high.
The investors trust the fundraising companies due to the prior checks by the exchanges. Also, investors pass through KYC/AML, thereby, ensuring safety in investments.
You don’t need to go through the tedious process of traditional listing of tokens in the Exchange. The exchanges directly open the tokens to the secondary markets.
The exchanges take responsibility for KYC/AML to verify investors in the platform and this ensures that the background of every investor is safe.