We are observing the emergence of a boom in the STO: Security Token Offering sector of the digital asset market. Although some optimists forecast that the security token market value will reach several trillion dollars in the past years, there is a huge expectation in our view. Is that security tokens still remain same at an experimental stage, and it will become the initial stage for the appearance of legitimate infrastructure for institutionalization of digital assets. As security tokens fall under the scheme of traditional finance, we believe its impossible to expand into a trillion dollar market without the entrance of financial institutions.

Just as STOs are expected to excite buyers by combining the benefits of stocks and cryptocurrencies, they also offer a range of benefits for the companies issuing them, From the past analysis here are outlined five key benefits:

Access to global capital

Just like cryptocurrencies , STOs will be able to be bought and sold by a global investor base.

New forms of marketing

This could include bounty programs to reward promotion of the STO through social media, as well as creating communities around the STO on social media platforms.

Preferential terms compared to traditional Venture Capital (VC) funding

Companies won’t have to give up a seat on the board to investing VCs, for example.

Lower cost than a traditional IPO

Particularly focuses on not having to hire lawyers for each country the STO is available in, as regulatory compliance in one jurisdiction should be enough.

Let us see some additional use cases — for example, giving holders of a hotel chain’s token access to discount rates and other additional benefits.

STOs are clearly getting a lot of people within the crypto space very excited. But they have yet to move beyond the hype stage and begin to live up to the enormous expectations many have for them. And there have also been warnings that not every regulatory body will be embracing the new token format

Even if STOs do initially live up to the massive hype, it would be worth remembering the rollercoaster rise and fall of ICOs. Regulatory oversight may keep outright scams from cornering the space, but it will do little to stem the wild speculation that is likely to accompany a fintech innovation that has been this heavily hyped. Whatever their long-term impact, Security Token Offerings certainly seem likely to grab a lot of people’s attention in the near future.

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