The main differences of ICO from STO

in #blockchain6 years ago

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Having endured improbable rise at a boundary of 2017-2018, ICO the industry gradually declined. And if during the best periods collecting in a month exceeded indicators in 1,5 billion dollars, then in December, 2018 it was succeeded to attract only 75 million dollars of investments.

However, in 2019 "primary offer of coins" remains the perspective instrument of attraction of the capital, however to the forefront there is a new trend – Security Tokens Offering or "tokenizirovanny securities".

In what differences between utility-tokens and tokenizirovanny securities? And why the second option the investor seems more preferable?

Features of an entry into ICO and STO
For entry into ICO it is enough to observe requirements of concrete jurisdiction where registration of the company is planned. For example, registration takes place in Estonia online, income tax is absent, and the VAT size will be 20%. On the Cayman Islands and the company it is simple to register, and the taxation is absent therefore jurisdiction surely enters in top-3 the most popular.

With STO the situation is different. The word security in an abbreviation indicates that tokens have characteristics of securities, therefore, it is necessary to conform to requirements of financial regulators. Most often entry into STO is followed by obtaining the license of the U.S. Securities and Exchange Commission as most authoritative regulator, however also licensing and other financial regulators is allowed.
ico-sto1.jpg

Who can get tokens?
To get the utility-tokens realized during ICO any user can, in fact. It is enough to learn through what exchange the realization of tokens will be enabled, to be registered, bring a deposit and to gain desirable quantity of tokens which can be used or sold subsequently.

It is already more difficult to acquire tokenizirovanny securities as access to them is open only for the accredited investors, according to requirements of financial regulators, and therefore for acquisition of security-tokens it is necessary to possess the capital in several hundreds of thousands of dollars.

What is received by the holder of a token?
In respect of the rights there are some distinctions too. In fact, utility-tokens do not grant any rights to the holders. They can be sold or used in the created ecosystem subsequently. On it the rights of the investor come to an end while security-tokens can be supported by real stocks of the companies, granting the right to dividends and even the right to vote in some cases. Similar features provide smaller volatility of cost of tokens.

Main advantages of ICO
"Primary offer of coins" guarantees to the investor full anonymity as there is no need to specify the data for acquisition of utility-tokens, it is enough to be registered. Besides, investors with any capital can participate in acquisition of tokens (the minimum threshold can make even 10 dollars). From the point of view of the company coming to ICO, this process is much simpler, than issue of tokenizirovanny stocks.

Main advantages of STO
Among the main advantages of security-tokens it is possible to determine the high level of protection of the investor. The risk of fraud in this sphere is minimized therefore it is possible to invest means in any projects. Besides, tokenizirovanny securities are less volatile, than utility-tokens.
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However it is impossible to speak about opposition of ICO and STO. Now partnership between the industries as in many states ICO legalization is carried out, taking into account application of tough regulation of the industry and therefore investors become more and more protected is observed more likely.

By 2020 the industry of STO can totally attract about 10 trillion dollars, according to forecasts of experts. In ICO the sector rise therefore in the near future tokenizirovanny securities, together with utility-tokens will be able to make the worthy competition to venture investment is expected too.

Source: ICO marketing BlackBall agency

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Thanks for the education!

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