The Growth Of STO industry: Then and Now

Despite the bearish landscape of the real economy, cryptocurrencies continue to soar to new heights each day. The Bitcoin and cryptocurrency market has found stability in tandem with its growing branches in almost every sector. Everybody, from traders, marketers, investors, government agencies to the financial experts talk about it and take a keen interest. And why not! They help you make fortune without much effort.

Alongside the digital currency phrases, a security token offering (STO) is heard quite often. Security tokens, financial securities’ digital versions have become the latest buzzword in the world of crypto. The cryptoians see security tokens as a development that could regenerate the crypto sphere.

In this blog, we are going to jot down a brief on what is STO and how is the STO industry right now compared with 2018 and 2019. Let’s get started.

STO is a process similar to an ICO (Initial Coin Offerings) where an investor/merchant is issued a crypto coin or token in exchange for money representing their investment. In short, a security token displays the information of the ownership of the investment product that is recorded on a blockchain and issued as a token.

In contrast to the traditional financial system, STOs cover users with investment smart contracts and make sure that every party abide by their obligations.

Securities include financial instruments i.e. 

• Real estate
• Bonds 
• Private equity
• Venture capital (VC)
• Stocks 
• Shares 
• Revenue participation notes

These financial instruments hold monetary value as they are tokenized and put up with a security token offering. 

Unlike ICOs, STOs distribute tokens that offer securities. Also, security tokens can not be traded on regular token exchanges. Exchanges need to fully abide by regulations including extensive investigations, token listings, data sharing and investor onboarding procedures. That is why these tokens are traded on specialized exchanges that support STO Platform Development.

Given below are the four key ingredients of STO:

• An issuance platform – These platforms make the issuance and distribution process easier.
• A blockchain protocol – Some of the issuance platforms, such as Polymath, have their own blockchains whereas some still use Ethereum. The Ethereum solution is a widely used one. 
• A smart contract – Smart contract is a programming language for the blockchain protocol that lays down the rules for the issued token.

STOs were created to bring the institutional investors on board during the cryptocurrency and blockchain era. We are the leading sto development company providing the A to Z security token offering services. Our list of security token services include:

• Security token development based on equity, asset reserve or debt token 
• Fundraising across Asia
• Formation and incorporation of required entity structure for security token issuer
• A complete audit of STO website, owner’s manual and marketing materials
• Financial model development for the project and much more.

The first STOs were offered in the year 2017 and five of them were raised over 65.59 million dollars in that year alone. 

The year 2018 began only with three STOs available in the market and later saw a commendable growth in infrastructure build-out and applications for Alternative Trading Systems (ATS) licenses (ATS licenses are required in the US for the trading of private security tokens).

2018 built the way for a whole new generation of security tokens. The investors and issuers continued to stay amazed by the benefits of the tokenization such as innovation structures, fractional ownership, increased liquidity, greater pricing efficiency and decreased issuance costs.

Then came the year 2019 that saw technology for Security Token Offerings (STOs) come on leaps and bounds, and promised the issuing of more of these regulated digital assets in 2020. 2019 saw the improvement markedly in terms of infrastructure technology. The STO emerged as a potent and significant alternative to venture capital financing and private equity for companies worldwide.

From the year 2018 to 2019, many biggies chose to get involved with security tokens. We have mentioned the best of best below.

• Tokeny: A Compliant Tokenization Luxembourg based platform is dedicated to providing a secure end-to-end platform, institutional grade, allowing the sale and management of tokens.

• Securitize: It is a full-stack technology and services platform. The company is armed with remarkable features and specialized tools for both issues and investors.

• Vo1t: Vo1t is the world’s leading custodian of blockchain assets. The firm combines the innovative system design with the best practices of cybersecurity to form the world’s most secure cold-storage vault.
• Token Market: They are the world’s greatest repository of past, present, and future STOs.

• Rialto Trading: The company delivers trading tools to the fixed income market. Rialto has produced three products and each of them provides different avenues to sourcing liquidity that can be used alone or combined to win great results.

With STOs, investors get access to traditional security benefits such as equity stakes, profit sharing, and voting rights. All in all, security tokens create wider investment options.

Crypto experts such as Marvin Steinberg, Sam Bourgi, Frederik Bussler and Saum Noursalehi believe that security token offerings are the future of the crypto landscape and the financial market. 

As quoted by Dan Doney, CEO of Securrency (A leading STO issuance platform), “We believe that 2020 will see an acceleration of the trend that links incumbent financial service providers with emerging security token firms to tokenize institutional grade assets. We should see tokenization platforms emerge provided by some of the largest technology firms (like Microsoft and Facebook) and issuances from highly trusted investment firms and asset managers. These assets, backed by some of the most known and trusted financial service providers, will create the liquidity and trust needed for the foundation of the security token industry.”

Polymath, Securitize, BlockSafe, DigiShares and Swarm fund are some of the top STO operating in 2020. But there are many others in the queue. Let us shed some light on the upcoming STO in 2020 with high potential.

Cryptobuyer

Cryptobuyer aims to provide the business with alternate payment services that would eventually lead to the acceptance of cryptocurrencies. It intends to increase the mass adoption of crypto by providing merchants with PoS solutions. Not only this but Cryptobuyer will also give merchants access to the vast crypto ATM network to buy and sell the assets. 

CityBlock Capital

The STO has already earned a reputation in the industry by locking powerful partnerships. CityBlock Capital aims at releasing different venture capital at various markets. The flagship fund is particularly targeted at Startups in New York City. 

Thaler.One

A blockchain platform, Thaler.One, lets the investors take entire control of the real estate assets worldwide. With Thaler.One, investors get transparency and secure legal ownership of Real Estate assets.