How can Security Token Offering change the game in Cryptosphere?

For quite some time, Initial Coin Offering (ICO) has been in limelight for it provided a global reach to entrepreneurs for raising capital for their businesses. The worldwide collection of funds through ICOs was $6.3 billion in the year 2018. However, at the same time, this particular has also got infamous due to its involvement in various incidents of fraud committed across the globe. Although it had provided a vehicle for success to many entrepreneurs, its grey side drew more criticism than applause for its innovation.

Decline of ICO

Consequently, the results started to get gloomy for ICO projects and their success ratio descended to a petty 29% by September 2018. Moreover, the global outrage over the fraudulent activities made them look more surreptitious. However, that is not the only reason behind the failure of this method of crowdfunding. Experts tell that the consistent bear market is one big reason why the ICOs are failing now. The steady fall in the price of bitcoin made many crypto enthusiasts feel dismal about it.

Above all, the nature of ICO involved a major risk of business getting successful or not.
Furthermore, SEC also tightened the noose around it and came with various restrictive regulations. Considering the dip in the price of cryptos along with the hostile attitude of investors towards ICO, the steps were taken by the regulations were considered right by many. Therefore, it was unanimously realized that we need an instrument of investment that could be more reliable for everyone.

Rise of STO

Security Token Offering (STO) is an answer to all the issues protracted by ICO. The most essential characteristic of these tokens is that they are backed by real-world assets. These assets include commercial real estate, dividends, equity, profits, and some types of debts as well. As opposed to tokens issued under ICO projects which were underpinned by market sentiment, security tokens give investors due rights over their ownership in the traditional stock markets as well.

This particular token is regulated in such a way that it manages all the requirements of the stakeholders. It gives the tokens holders exclusive rights for accessibility and visibility, and it is created on the same blockchain used for cryptocurrencies and altcoins. There are many advantages to STOs for investors and companies alike. It even comes with the rights of fractional ownership of highly valued illiquid assets in the market. The tokenization of digital certificates is seeing a new era with these tokens.

Feasibility of STO in business

As STO is a well-regulated and more reliable instrument, launching your project with this is a much more prudent decision. And that’s the reason, STO development companies are rising steadily and giving entrepreneurs the best chances to thrive in their domain. It is indeed a method using which, you can seek investments from a larger cadre of investors. All you need is to find a reliable developer or a team that can provide you security tokens that are specifically created for your business. Since they involve regulatory implications, you need to have sound legal advice as well. Coin Developer India Top Token Development Company that can help you acquire suitable tokens for your business, we are an expert in this domain and have been assisting entrepreneurs with this technology across the globe.