The State of Token Offerings: What to Expect in 2020 and Beyond

The economy is rapidly changing, and businesses have to adapt to new circumstances. The traditional financial system is struggling through an unbelievable recession, but what about the digital asset market? Will the COVID-19 crisis push the tokenisation of the economy, and how will it spread around the world?

General Overview

2020 has welcomed us with many unpleasant gifts. Both the COVID-19 pandemic and oil market crash have resulted in an unprecedented economic recession, which, according to analysts, is only gaining momentum.

You don’t have to be a great mind to understand that the economy will no longer exist the way we are all used to. We don’t know how long social distancing will last or how long businesses and manufacturers will remain closed, to say nothing of small and medium enterprises (SMEs).

It is estimated that SMEs t have already been seriously affected by the coronavirus pandemic and the following financial crisis. Governments all across the world are taking unprecedented measures to support this layer of economically active (well, at least it used to be) society.

Is Governmental Support Enough?

Top economists from all over the world say that supportive measures are only a temporary release and not long-term stability. Businesses will be forced to come up with new ways of continuing their activities to provide themselves with a stable financial foundation. The traditional financial system proved to be too vulnerable and irresistible and, unfortunately, not as stable as it was once considered to be. Today, the volatility of traditional bond pretty much resembles the situation in the digital asset market. The only difference is that the volatility in the crypto-asset market is a common and, thus, ordinary thing. The traditional asset market treats this volatility as a severe crisis, and it will take a long time to recover.

Of course, it would be a mistake to assume that the cryptocurrency market is flourishing today. No, it’s a nasty time for everyone. Still, digital assets and blockchain adoption may be a new opportunity that can help entrepreneurs all over the world.

A New Life for ITOs

Token-based fundraising mechanisms, or ITOs, had their peak of popularity in 2017, the golden age for the crypto market and the $20,000-priced Bitcoin. Then. BTC crashed (December 2017), and the incredible popularity of ITOs slowed down. Looking back on it now, we can see that in 2017, crypto and blockchain technologies were treated like a wonder, not like technology in the way we mean it now. Still, those events helped the ITO market gain the maturity needed for stable and sustainable development.

The maturity of both the market and the market actors couldn’t help but lead to higher demands and standards, which, in turn, led to the appearance of new fundraising methods that offered more transparency, security, and stability. Here in 2020, these factors can act as a helping hand for businesses and bring popularity to the services that will introduce new crowdfunding facilities earlier than their competitors.

The Fundraising Methods Available: ICO, STO and BRO

A business doesn’t have to be a blockchain start-up to choose an ITO as its fundraising method. The features of this method, such as a quick start, massive funding capacity, no capital dilution, and liquidity, prove that ITOs may be beneficial for enterprises from different areas.

This versatility is one of the ideas that have become the fundamental basis of Tozex, the first decentralised, non-custodial crypto-asset financing platform from France. Tozex was designed to facilitate the tokenisation of the economy within one ecosystem for all stakeholders. The platform aims to align the interests of entrepreneurs, investors, and traders to bring them into a fully regulated and transparent ecosystem with no third-party assistance and no force-majeure risks related to custody provider issues.

Tozex has created that transparency by introducing Believers Reward Offerings, or BROs. BROs are a new, authentic fundraising mechanism created on the blockchain using smart contract capabilities.

A smart contract is computer code that automates a set of execution conditions, including internal and external settings, without the need for a third-party system when on a blockchain network. It is simply a digital contract detailing the rules and conditions to be followed in its execution without the ability for the parties to modify them. The execution inherits the immutability of the blockchain.

The process of deploying a smart contract (STO, ICO, or BRO) is simple. It lets users utilise their existing wallets through the Tozex platform. Thus, users can deploy the selected contract within the blockchain network of their choice without compromising their private keys.

BROs are a new token-based fundraising mechanism that offers a sustainable alternative to traditional Initial Coin Offerings (ICOs) and Security Token Offerings (STOs), which are also available on the platform. BROs allows users to sharply decrease the pump-and-dump phenomenon, limit volatility, and foster growth by providing equal treatment of all contributors.

Tozex operates within European standards and laws and is fully compliant with Market Abuse and the 5th Anti-Money Laundering Directive, all of which is aimed at making exchanges safe and trustworthy for users, as well as authorities. Thus, Tozex is a working solution for both entrepreneurs and governments.

Final Words

The first three months of 2020 have changed the world and the economy, and these changes are likely to push blockchain adoption and the tokenisation of the economy. The great recession of 2008 — the most severe economic crisis until 2020 — gave the world Bitcoin. We can expect something similar that will bring businesses back to before-crisis stability and prosperity.