The abbreviation of STO means a secure Token offering method. Although some aspects are a bit like ICO, there are some fundamental differences. For example, security tokens are regulated like traditional securities and are subject to the same legal compliance requirements. Their main difference is that security tokens record the ownership of investment products on the blockchain.
Interest in STOs has grown recently, as startups and established companies alike are finding new ways to raise funds.
Advantages and disadvantages of STO
STOs are regulated, which means there is less risk for investors, and security tokens are usually backed by real-world assets, which also helps investors assess the intrinsic value of the token. Combining the above two factors, STO can attract more attention from traditional institutional investors.
A wide variety of companies can participate in the STO ecosystem. Platforms such as exchanges, broker-dealers, or custodians can all benefit from STOs. These companies can easily issue security tokens for the convenience of retail investors, as long as the security tokens can be filed as securities.
Financing an ICO can be tricky, but the legal aspects of security tokens are sometimes murky. Marvin Steinberg, founder of CPI Tech and an expert in STOs, hopes to make an STO. Companies will have to consider the hype and technical aspects as well as the legal Compliance. Demand for security token offerings is growing rapidly, putting pressure on companies not to miss out. As a result, hundreds of startups and businesses are running around, making serious mistakes.
Businesses that want to use STOs need to have a solid platform and comply with all regulations and laws, which are critical to the success of STOs. To facilitate the growth of security tokens, Marvin Steinberg has created the STO Guide, which provides great information on how anyone can get started with an STO.
Steps and Tips for Launching a Successful STO
Marvin Steinber pointed out in his guide that in order to successfully launch an STO, an enterprise first needs to choose the type of STO and its jurisdiction. Different types of STO will attract different types of investors, and its structure also has great influence on dividends, company shares and many other aspects. make a large impact.
Marvin Steinberg continued that businesses also need to create a product called SPV. This particular vehicle is a structure that becomes an equity shareholder in the main company and allows the investor to receive dividends and equity. Marvin Steinberg stated that he has been taking advantage of the EU small product exemption by creating 3 major STOs.
Most security tokens are usually created on several major blockchains including Ethereum, Stellar, or EOS, and enterprises can customize and choose them according to their needs if they need to issue tokens.
Marvin Steinberg asserted that businesses need to understand the importance of having professional requirements for STOs, as a solid infrastructure will ensure that the issuance of tokens is safe and complies with all requirements. As mentioned earlier, STOs will only be successful if they can reach the right network of investors, and the classic model here still occupies three traditional stages: private sale, pre-sale and main sale.
Its important not to forget about marketing, sure, you may have the greatest product or service ever, but if no one knows about it, who is going to buy it or use it? Marvin Steinberg explained the importance of marketing if a business is looking to raise funds through an STO, and he highlighted the strictness of crypto marketing rules, as Google and Facebook, for example, do not allow regular PPC ads for cryptocurrency products.
Businesses need to use innovative marketing strategies that are unique to their business model and able to attract the right investor base while considering all metrics and milestones.
Obviously, launching a successful STO can be confusing, especially if you are new to the blockchain industry. Getting help from a certified STO advisor or service is crucial even if you are familiar with the cryptocurrency market, many companies just rush through the process and make simple mistakes that are easily avoidable.
Only use reputable STO services and solutions
While the demand for STOs is growing, the number of services offering STO solutions is also increasing. However, most STO service providers are not always professional and can actually be scams, so it is important to choose a reputable service or platform with a proven track record.
Marvin Steinberg and CPITech, with a proven track record of over 43 successful projects, are currently embarking on a $700 million project aimed at tokenizing a portion of Times Square. CPI Technology was co-founded by Maximilian Schmidt, an expert in developing BTC applications.
The status of STOs
One of the biggest innovations in cryptocurrency fundraising is the ICO, a form of crowdfunding that became very popular in 2017 and 2018, with hundreds of ICOs being launched every month. However, the hype quickly faded as most ICOs failed or were simply blatant scams.
STOs are more secure because they need to comply with regulations, there is a clear gap between how ICOs work compared to STOs. Common ICO promotional tactics like crypto airdrops and crypto bounties should not be executed alongside STOs, as compliant securities cannot be easily distributed.
The original text comes from coinspeaker, compiled by the BluemountainLabs team, the English copyright belongs to the original author, please contact the editor for Chinese reprint.
The original text comes from coinspeaker, compiled by the BluemountainLabs team, the English copyright belongs to the original author, please contact the editor for Chinese reprint.
