Types of Security token
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In general, there are many fundraising strategies in the Blockchain space. One of the most reliable ways to raise funds in blockchain space is launching Security token offering. Security Token Offering is a blockchain-based fundraising strategy that allows crypto investors to buy security assets in return for funding the project. It includes providing rights for the dividends, shares, and equities. These tokens are usually traded on cryptocurrency exchanges. A security token can offer more profits to the investor when contrast to a utility. STOs need to be compliant with several government regulations. Security Tokens are classified as securities, so they are bound by the security regulations of the country that are operating in STO.
Speaking of security tokens, there are certain types you need to know.
- Equity tokens
- Debt tokens
- Asset tokens
Equity tokens constitute the value of shares issued by the company on a blockchain. The key variation between an equity token and the traditional stock lies in how the ownership is recorded. The equity token is recorded on a permanent blockchain.
Debt instruments are the same as corporate bonds and real estate mortgages. The place of these tokens is managed by risk and dividend.
Asset tokens represent the ownership of an asset like commodities, real estate, or even art. Blockchain technology promotes transparent record-keeping up of the transactions which assist in reducing fraud.
We have discussed the types of security tokens. Now to launch STO, you need to choose a type of security token. However, launching an STO is not going to be an easy task. You may have to work on both the technical part and the business part. So, to reduce the loads, you can hire a trustworthy STO development company. Out of the many companies in the market, a trusted company is Zab technologies. It is one of the prominent STO Development companies that offer the best services for end-to-end STO development including security token creation.
If you are interested in doing business with them, then feel free to connect with their business experts directly via,