Why should we invest in the Security Token Offering?

Crowdfunding is one of the reasons why there are great success stories behind many startups. This strategy has helped many startups and entrepreneurs to raise a million-dollar investment globally. Added, this has given the fighting chance for the projects which were struggling for years. According to a recent survey the average successful crowdfunding campaign is recorded to be $7000. Moreover, it takes about 11 days to prepare for a successful crowdfunding campaign. But in the year 2019, the average funding per campaign amount is $794.

Now you will have a question: What is Crowdfunding?. Crowdfunding is the strategy leveraged by small and medium enterprises to raise their funds efficiently for their projects. Fundraising is actually done by a large set of people through the Internet. Here, the crowdfunding is done through platforms such as Kickstarter. Once the project gets enough funds, it will be transferred to the respective person. Moreover, there are a handful number of people who have succeeded with crowdfunding platforms. 

There are three types of crowdfunding models in the blockchain industry. Such as ICO, IEO, and STO. in this blog, let us see about STO and why should we invest in Security token offering.

What is STO?

STO is the security token offering and one of the finest crowdfunding models in the blockchain industry. This model came into the crypto market to replace the ICO website and to eliminate its drawbacks. STO is also a smooth fundraising platform where the newly released security token sales will take place. 

In ICO’s and IEO’s, only the utility tokens will be present. but here only the security token will be sold to different users. Security tokens are backed with real-time assets. This security token contains all the ownership information of the investor. All this information is completely recorded in the blockchain. Also, you should do all these processes by the SEC rules and government rules. This crowdfunding model offers top-notch protection to investors. Also, it reduces the risks of security token issuers. 

Many startups already started to create their own security token with the help of security token development companies. In STO, security tokens backed only with real-time assets. so there will be very fewer chances of fraudulent activities and scammed tokens. Many investors are saying that STO is a trusted and secured crowdfunding model. Also, STO is more effective for long-term investment.

Now, let us see why we should invest in STO.

Notable reasons to invest in the security token offerings:

• Real value:

Since security tokens are completely created under the use of blockchain technology. So it is quite common to get them mixed up with utility tokens. Utility and security tokens do not have anything in common. In some cases, utility tokens designed to provide access to any service or product that developed on a blockchain platform. Utility tokens have no other value in their own right. whereas security tokens are financial instruments that label crypto token assets. 

• Increased credibility:

Many people are saying that STO is the new version of the ICO. but it is wrong. STO completely differs from the ICO.  Due to the improper regulations in ICO,  there is no proper security mechanism for investors. So many of the investors lost their funds in the ICO websites. On the other hand, Security Token Offerings are completely different. Because security tokens are treated as “Tokenized Securities” by regulators that have some form of crypto regulation. This means that if any individual or a company issues security tokens. Then they should fully undergo all security regulations.

• Potential for 24/7 markets:

Most of the traditional online markets have strict working hours. For instance, US stock markets open trading at 9.30 am and close at 4.00 pm each weekday. While markets are closed, any fraudulent activities may occur. But security Tokens are available 24/7 in the trading market. By activating around-the-clock trading of assets, investors get an opportunity to act on new information promptly. So investors can invest in security tokens at any time. Also, there is no time limit in the security token offerings.

• Transparency:

We already know that STO’s are completely built using blockchain. It allows verifying and tracking data. So that it protects the ownership securities in a fully transparent and secure way. This will make auditing and reporting in easy way. So this will prevent fraudulent activities, scamming, and third party manipulation.

Final thoughts:

I hope these reasons might help you to invest in security token offerings. If you are planning to launch a secured STO website. Then you can buy premium STO software from a top-notch security token development company. So that they will assist you to build your own STO website within a few days.