What are Equity Tokens and Equity Token Offerings (ETOs)?



  • Equity Token
    An Equity Token is a type of Security Token backed by some type of traditional asset, be it traditional company shares or real estate . Each token represents a part of the tokenized property. The main difference with traditional stocks is that while a traditional stock is reflected in a database or even on paper, an equity token does so on the chain of blocks of a certain blockchain.
    The idea behind equity tokens is that companies can issue shares and voting rights directly on a blockchain, improving liquidity and reducing transaction costs associated, for example, with the fees and royalties of the main world exchanges.
    The launch of an Equity Token is not very different from any other security, first we will have to choose the Exchange where we want to list our project as well as the blockchain . Then, we must define the conditions that are granted to the "tokenists" for the fact of keeping the token in their wallets. Finally, we must assess whether we want our ETO - Equity token offering - to be made through a private or public offering or a mix of both.

    Stock Token Offerings (ETO)

    This is a way of raising funds for any company that involves the issuance of Blockchain Assets Tokens. These tokens can be issued in both public and private placements and can be conducted through any regulatory entity in your home country.

    The Equity Token Offering process described below is similar to any issuance of shares by any other company that is not related to the Blockchain. However, the platforms that carry out this process are different. The process below shows step by step how to carry out an Equity Token Offer for any Blockchain development company that begins with a campaign to investors informing them about the company's move to offer an Equity Token.

    Conclusion

    The ETO will predominantly become the preferred form of fundraising as it will offer a lot of value to investors as well as investment value to companies. An Equity Token, like a stock, is more of a security, which means that regulations must be followed by creating a form of confidence on the part of investors. This is therefore more likely to offer more funds than any other fundraising method launched by Blockchain companies.