Why a Security Token Offering Favors both Entrepreneurs and Investors



  • An STO or Security Token Offering is a crowdfunding mechanism that is used by companies to distribute tokens to investors who fund the business. STOs run on blockchain technology and the digital tokens offered are backed by some form of asset, therefore, giving it the name ‘security’ token. An STO benefits both the investors and the business raising funds. Let’s find out how!

    Investors

    1. STOs are regulated by authorities, unlike the other blockchain-powered fundraising events. Therefore, investors know that there is a much lower chance of being scammed.

    2. The digital tokens are backed by some form of security such as gold or land. This ensures that the investment is worth something and that there is always a backup for the investors.

    3. Since an STO is a futuristic means of crowdfunding, it has more scope.

    Companies

    1. Companies will easily be able to earn the trust of the investors as the STO is governed by authorities.

    2. It is a very efficient method of raising funds as it uses blockchain technology to record all data and carry out transactions.

    3. Transactions that occur on the blockchain are peer-to-peer, thereby eliminating middlemen and reducing costs.

    If you’re looking to launch your own STO to raise funds, then you are on the right path! Take advantage of the futuristic blockchain technology. Get in touch with experts like Blockchain App Factory to handle your STO from start to finish. Good luck!