here.This is my entry for the sponsored writing contest organized by @monajam. You can find the contest
The advent of cryptocurrencies and blockchain has changed the way people interact with money. Companies now have the opportunity of raising funds throughICOs(Initial coin offerings). They offer tokens for a price lower than the expected price in the market, raising enough money for themselves and buyers get a chance to make profits if the value of the token rises in the future.
Tokens come in various forms and have different functions. It could serve as a currency, a digital asset, a share in a company, a reward for contributors in the community, a means of accounting or issued as payment for using a product, service or a system.
Utility token Vs Security token
In reality, there are two basic types of tokens.
Utility token
Also called user tokens or app tokens, they represent future access to a company's product or service. They are distinct in that they are not designed as investments. Because of this feature, utility tokens are exempted from federal laws governing securities. An example of utility token is Basic Attention Token(BAT). The BAT token functions as a medium of exchange between users,advertisers and publishers participating in the Brave browser ecosystem.
To avoid appearance that they are engaging in security offerings, utility token creators refer to their ICOs as token generation events or token distribution events.
Security Tokens
This is a token that derives its value from an external tradable asset. Unlike utility tokens, security tokens are subject to federal securities regulations. Penalties are issued when the project doesn't meet or abide with these regulations. Security tokens are designed for investment purposes and can be exchanged for Fiat or other cryptocurrencies.
They also grant companies the ability to issue tokens that represent shares of a company's stock.
There are few security tokens in existence. This is because of the difficulties involved.
Most companies avoid getting their tokens listed as securities because they cannot be traded freely and there are a lot of restrictions. There are technical, legal and regulatory requirements and procedures involved in issuing security tokens.
MOBU is a decentralized organised ICO platform that offers to facilitate the release of compliant security tokens on the blockchain with ease and confidence for developers and businesses backed by real assets seeking to raise capital on the blockchain. MOBU would help companies raise capital by helping to launch security token ICOs using smart contracts while providing KYC, AML and SEC approval. Escrow services to ICOs, bank support to investors during the conversion of fiat to cryotoand smart contract development are offered on this platform.
MOBU solves the problems of developers who are unsure about all processes involved in offering security tokens to the public. Furthermore, security tokens created and issued on the platform is programmed to verify who buys and sells them. Exchanges would only be done with authorized participants. With MOBU, developers are assured of a network that is trustworthy which would boost economic and operational efficiency.
With MOBU, there would be negligible fees involved, instant settlement times as well as around the clock trading.
What Solutions Does MOBU Offer?
- It serves as a bridge between the securities market and the blockchain.
- Businesses backed by real assets can raise capital on the blockchain when MOBU facilitates the release of compliant security tokens
- All security token ICOs will be extended on smart contracts
- There is clarity and certainty between the investor and issuer in terms of expectations and rights
- Tokens are limited to authorized users only
- MOBU introduces a new innovative method of escrow services to ICOs
- Introduction of lockup utility that allows service providers to assess services rather than spend tokens creating a scarcity of supply and increasing the demand forthe tokens in the market.
- The investor is protected
- Provision of legal support
- Transaction costs are managed and kept market related.
- Provides a secure system by isolating each security offerings thereby preventing high profile hacks
- Provides an efficient and scalable system
- Continuous liquidity and exchangeability for investors is assured.
MOBU Tokens
This is the core utility token that powers the MOBU system. MOBU is an open protocol meaning token holders can visit any supporting exchange to buy and sell their tokens. Lockup utility is applied to MOBU tokens to create scarcity of supply and increase demand and value of the tokens. This would be achieved by
- Requiring service providers stake a certain amount of tokens to earn the right to work in the system.
- By including premium features desirable to secondary market traders.
- Reward of MOBU tokens to referrals
MOBU processes(How does it work)
Interaction between users are managed by a collection of processes. These processes are in place for
- when an investor comes on board
- when an an issuer launches a security token
- when an investor buys a security token
- when a security token ICO is created
- When a KYC provider comes on board
- when legal representatives come on board
- when security tokens are resold
For more details on the processes, check the MOBU Whitepaper
Conclusion
MOBU aids businesses in issuing and trading security tokens, allowing them participate in block chain based asset ownership and investment opportunities. It offers a block chain solution to all requirements and procedures required for security tokens. It is user friendly, secure and trustworthy. MOBU is the dawn of a new era on the block chain.
Roadmap
Token Distribution
Team
Board of Advisors
Partners
Links
Website
Whitepaper
Medium
Twitter
LinkedIn
All images gotten from MOBU Whitepaper
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Amazing review @cheekah
I love your explanation of differences of security and utility tokens. Very easy to read and understand.
Good to see you taking part in this contest as well.
Please allow me to ask just few question.
MOBU seem to be one of very few ICOs that are completly launched as security token. I wonder why. Wouldn't it be better to come up with some utility to their tokens and launch ICO as a utility token?
And also how will they maintan the price? Does MOBU offer Masternodes or POS to attract hodlers? If I cannot use those tokens and on top of that if there is no POS/masternodes introduced into their structure ... then what would make price go up or at least stay on stable level?
Upvote on the way!
Yours
Piotr
you know what? I even printed your post @cheekah
this is one of those articles that I would like to keep for my future :)
You should bookmark it @crypto.piotr :D