Not only ICOs or IEOs are smart forms of fundraising, but there are also STOs in the market that also act as capital raising companies. So what did you guys understand and know about What is STO? not yet? Here we go with you to discover about STO.
The correct definition of the term STO that you do not know yet.
STO is the short name for the phrase Security Token Offering – This is a fairly new and smart form of fundraising for startups or corporations. When learning about this form, we see that there are many similarities in traditional businesses, which are made public through initial IPO offerings. In other words, STO is a type of investment contract and the owner will expect to produce profits in the future.
With an STO, a company issues security tokens to its investors. But this security token will be described as an IOU and backed by the assets of the issuer. Therefore, this is also considered a mandatory and legally binding investment contract so that investors can access company shares and monthly dividends in all business decision making processes.
Let’s take a look at the advantages of STO.
As far as we know, there are many opinions that STO is the next generation to knock out and replace ICO. So let’s find out if this statement is true. So let’s take a look at the advantages and disadvantages of STO to find the answer.
What is STO has the following advantages. STO gives credibility, if we can follow the ICO for a long time then we will see that the investment in ICO is no different from gambling or it is a game of chance because there is no mechanism yet. assess and handle the irresponsibility of project owners. This has damaged investors’ confidence in most ICO projects.
Soon after, STO was born and was considered as a savior or a solution to bring confidence to investors. As for the STO, if the projects do not comply with the original agreement or commitment, they will be fined according to the regulations of the securities house. That creates peace of mind for investors. This is also the first advantage that STO owns.
STOs provide investors with easier access to electronic investment markets. When there is an STO, investors can easily access the market through the internet, on the other hand, investors can buy tokens of potential projects with them.
STOs help improve the traditional financial model. For transactions related to traditional finance, there will be costs and time on the blockchain, In addition, it also gives investors a lot more peace of mind.
STO also helps us to reduce the cost of legal advice. In the legal consulting services will be reduced costs when using STO. The reason is that the operation on the contracts of the blockchain platform and the lawyer services will be completely replaced.
Finally, what are STOs they also help us reduce manipulation. This is an issue that many investors care about and respond to.
We hope that our article will help you gain more information and knowledge about STO to accompany STO. Good luck.
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