Security Token Offering (STO)
STOs are security tokens that derive their value from real-world assets, making them a completely viable and safe way to attract investment and capital into your business or start-up. Often referred to as an offspring of ICO’s, STO’s work as a regulated alternative that provide complete security for token providers and investors. STO’s are also legally compliant under the Howey Test.
Security Token Offerings (STO) is the latest innovation in the Blockchain revolution. Funds raised from STO’s are already numbered in the hundreds of millions. Increasingly emerging as a powerful tool for businesses, STO’s function as a safe, secure way to gain investment interest and raise capital.
STO’s are ground-breaking in the crypto sphere as they provide investors with tangible legal rights functioning as real financial products. STO’s are cryptographic security tokens that take their value from tradable, outside assets. They have the ability to generate profit, pay dividends and invest in other tokens depending on how the underlying tokens are programmed.
STO is an authentic alternative to private equity and because it exists in the Blockchain it exists in a decentralised, secure system. As the tokens generated by an STO represent regulated financial products, tokens are supported by the revenue and assets of the token-holder, giving investors more confidence than ever before.
If your business is looking to raise some much needed capital or take control of your assets and you want to go about it using the most transparent system in the world, Blockchain Australia can help. Experts in all things crypto, Blockchain Australia uses the latest tokenization technology to assist you with your STO platforms that are tailored to your businesses needs.
The revenue capability of STO’s are already numbered in the trillions as STO’s become a more attractive crowdfunding option. It’s redefining what entrepreneurs and start-ups are able to do, as their capacity for investment grows expediently. STO’s also solve a lot of the problems ICO’s presented, such as the possibility for market manipulation and insider trading.
Security tokens are attractive investments as they give backers financial rights such as equity, profit-sharing and paying dividends.
Types Of STO
Used to generate funds, this kind of token signifies a payback agreement between the token-holder and coin-holder.
Tokens supported by real assets. Signify token-holder rights.
ASSET / DERIVATIVE TOKENS
Tokens that get their value from tangible assets.
Tokens that can rotate between debt and equity.
Types Of Asset That Can Be
Art tokenization is changing the nature of art investment. Tokenization allows platforms like galleries or artists themselves to offer fractional ownership on works of art that function as shares that can then change in value.
VENTURE CAPITAL FUNDS
Tokenizing creates a greater opportunity for businesses to pursue new ideas with greater access to investors. Tokenization gives power to token-holders as they are able to manage their investment funds without the interference from traditional intermediaries.
The tokenization of assets has been a game-changer for the real estate industry. Whilst traditionally real estate has been limited to a small investment base, asset tokenization is making real-estate investment globally accessible giving it the potential.
Mining repository assets are primed for tokenization as they are illiquid. The future of commodity trading lies in the tokenization of assets such as gold, silver, diamonds and renewable energy.
Stable Coins are cryptocurrencies whose value is derived from stable assets such as gold and currencies. A progressive feature of the digital currency market, stable coins can also be tokenized.
ANTIQUE GOODS / CARS
The tokenization of antique items allows token-holders to diversify their investment prospects. Without the conventional process of auctions/sales, tokenization allows for direct transactions and fractional ownership.
As industry leaders, Blockchain Australia is at the forefront of STO development and is confident in building platforms that are legally compliant and investor friendly.
Blockchain Australia is excited by the growth of asset tokenization in the crypo-sphere and can help you commodify your real-life assets on the Blockchain. Dividing your assets into digital tokens is a viable way to access new markets. In fact, the World Economic Forum forecasts that in the next decade, $10 trillion worth of financial products will be tokenized, making STOs the future.
With ongoing consultation and support, Blockchain Australia will be with you every step of the way. From developing to marketing and sustaining it’s expansion, our experts take care of it all.
Types of STO Services- (This part can be amended depending on the Services Blockchain Australia Offer)
Blockchain Australia Solutions can create an STO platform using a blockchain-powered software. We remove the need for intermediaries, making your STO solution cost-effective and viable. We are equipped with the knowledge and experience to overcome protocol challenges and can help you to navigate the legal and regulatory considerations.
STO EXCHANGE PLATFORM
What makes Security Tokens so unique is the fact that they are essentially a programmable, regulated, smart security. Blockchain Australia constantly endeavours to provide legality and safety in our STO platform development.
Blockchain Australia develops Equity Tokens to raise capital for your next project or idea. The development of ETO allows you to garner interest and investment in accordance with well-understood capital raising regulations, using a programmable smart security. Investors can invest confidently knowing that tokens are programmed to protect their rights.
A blockchain platform helps to ensure all the transactions are visible to financial regulators.
Legally Sound Tokens
The tokens we create are equipped with inherent smart contracts which works to enforce the regulations and legalities of the token. This includes verifying the accreditations of investors and assets.
Blockchain Australia develops Token Asset Offering using official investor certification, KYC/AML compliance process and transparent rights.
Wallet development to create and distribute your token. We make sure your wallet is compatible to legal requirements.
Strategy and planning to attract the right investors to your token. We formulate integrated marketing plans that build investor trust and set you up for success.
Frequently Asked Questions
A security token offering (STO) is a digital tokenized version of traditional securities (i.e. assets) that represent an ownership position in a company. Usually, an STO will derive its value from external assets because there is reduced trading friction with this investment. A security token is deemed an official investment contract as it passes the Howey Test and relies on investment assets such as stocks, bonds and real estate investment trusts. Instead of having a traditional digital certificate this contracted is recorded on a blockchain and then issued as a token. STOs are more valuable because they are regulated tokens that determine who can buy, trade and interact with the tokens and require compliance to these regulations.
There are 8 stages to acquiring, developing and marketing an STO. They are
- STO Development which create a platform for your token using blockchain technology
- STO Exchange Platform that will ensure your tokens are secure and follow legal requirements
- ETO Development that raises capital and garner interest and investment for your token.
- TAO Development will get the required certification that comply to regulations to make the token transparent.
- Legally Sound tokens that enforce regulations through smart contracts.
- Wallet Development will develop a legal and sustainable online wallet for your token
STO Marketing is a marketing plan and strategy to attract and build investment of your token.
Investing in an STO is a good idea because it allows for blockchain technology and tokens to create more accessible and transparent securities (such as stock). STOs have expanded the fundraising capability further than public offers and allows for these securities to share revenue in real time. Additionally, STOs have developed a market that is globally connected and has 24/7 trading capabilities which allow for more liquidity particularly in assets that wouldn’t normal be considered liquid.
Unlike ICOs where anyone can launch and participate with the tokens, STO require compliance to regulations which restrict who can trade and buy tokens as it is a globally recognised legal investment contract into an organization that has offered legal assets. Additionally, there is no hopefulness involved in STOs for investors, as they have a guaranteed profit that is accumulated from assets and stocks. While it requires a lot of paperwork and development before launch STOs are the most secure tokens for an organization as it ensures that everyone that interacts with the token is legally compliant.
STOs need to adhere to a criteria that ensure it is scalable, reliable and can be executed as they high risk and high reward. Using Blockchain technology such as wallet development and smart contracts an investor can then apply for a security token directly through the organization. However, if an organization does not have a customised platform for their token, investors may also engage in STO fundraising platforms such as Block Estate and Blockchain Capital.
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Blockchain Australia MEMBER ORGANISATION
We are a proud member of the Blockchain Australia (BA)
Blockchain Australia is the industry network for businesses implementing blockchain solutions. Blockchain Australia members work together to build understanding of the potential of blockchain technology, share best practice and engage with government and regulatory stakeholders.