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ICO vs STO, Are Security Token Offerings Different?

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STOs are becoming more and more convincing for investors and companies to raise capital.  Securities can offer many financial rights to investors.

The initial coin offering ( ICO ) is the first, most frequently used and fastest way to finance a blockchain project without intermediary, at least in 2017 – 2018.
The STO can be compared to the IPO, where the tokens are treated as real securities.
With the increasing number of fraudsters in the ICO universe, as well as the strong desire of governments to control Israel’s deregulated crowdfunding campaigns, regulators such as Securities and Exchange Committee ( SEC ) were unhappy, and they could not leave aside.

Such smart contracts also allow for the production of nonfungible tokens ( such as ICO tokens ) or non – fungible tokens ( such as cryptocurrencies ) on the durable, battle-tested blockchain of Ethereum.
In contrast to ICOs, STO tokens are usually supported by a known element, such as assets, shares, income or profits.
In addition to the high initial legal and compliance costs, the other major drawback of STO tokens is that large cryptocurrency exchanges such as Binance do not yet support them.

 

STOs are more transparent than ICOs

One result of the need for change is the increase in sales of collateral tokens ( STOs ), a more transparent investment vehicle.
Primarily, a security sign represents an electronically packaged interest or a share in a private interest or company – and can be extended to assets such as real estate, trusts, LLC, fine arts, etc.
Often, securities are given the right to a form of equity or ownership of a particular asset, whether fractional or whole and to expect profits through income, dividends or favorable price movements.
Companies can offer digital security tokens for a variety of assets that are otherwise illiquid, while investors can buy lower – risk securities in their preferred investments.

 

Utility Tokens and Security Tokens

In contrast to Utility tokens, Security tokens can be backed by corporate assets such as shares, voting rights or other rights to a real asset.
For example, if company X, which turns out to be a very successful mutual fund, moves 5 million dollars into a free chain STO, the resulting hype about buying and investing would be unprecedented.
Not only is it illegal to manipulate the market, but it also discourages institutional investors, such as Company X, from investing in such projects, because their total investment will be readily visible to the public.

Companies that register an STO will have to submit documents that are publicly available through the SEC EDGAR database.
Sto’s security tokens are based on Alternative Trading Systems ( ATS ) with intermediaries registered with the SEC and monitored by the FINRA.
More and more people will understand what the stock of the blockchain is, and security tokens will become an integral part of the global financial system.

Elsewhere in Europe, the financial industry, traditionally focused on fiat, is beginning to support cryptocurrencies as securities.
Regulators, the financial industry and many cryptocurrencies are slowly developing a common understanding of what blockchain security should look like.

 

STOs are more secure for Investors

STO has achieved this level of security, which IPO has, as well as the relative simplicity and accessibility that is inherent to ICO.
To have a convenient opportunity to view the list of all current ICOs in one place, particular aggregator sites have been created, called ICO trackers.
The following data is analyzed to create an estimate of this parameter: advertising of the development team, White Paper, the availability of a work test product, the reputation of consultants and partners, etc.
Detailed information on ICO projects can be found on larger sites, and some services can easily publish WP by linking to the official project source.
There are a lot of fraudsters on the ICO market, which you can find on specialized services – ICO trackers.
In short, and simply put, the definition of a hard fork is a significant upgrade of an existing cryptocurrency in which a new currency is created.

 

STOs offer more rights to the Investors

In theory, the symbolic economy can improve network effects by rewarding user involvement and even better governance by giving the most active users a more significant influence on future protocol decisions.
Some traders earn their living by doing so with the public market share, and the behavior of investing is one of the driving forces behind the current cryptocurrency market.
Stos are usually granted an exemption called D 506 ( c ), which is a public offering of securities to accredited investors ( each person with net worth 1 million dollars plus or annual income of 200, 000 or more dollars over the last two years – 300, 00.

STOs are becoming more and more convincing for investors and companies to raise capital.
Securities can offer many financial rights to investors, including shares, dividends, income shares, profit shares, voting rights, and other financial instruments.

#Explained

Alert EOS Holders, REX is here: All about the Resource Exchange

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REX is a marketplace made for the EOS blockchain that allows for the leasing of network resources where you can borrow or rent out your resources.

The big thing everyone is chattering about right now is REX or Resource Exchange. REX is a marketplace made for the EOS blockchain that allows for the leasing of network resources in a risk-free way. It establishes a market where you can either borrow resources or rent out your available ones and then receive a return on those lent-out resources on a 30-day loan basis. When renting out your resources you do retain full custody of your EOS and you do keep your EOS votes.

 

REX: EOS Resource Exchange

REX will be held in maturity buckets that cannot be sold until they actually reach maturity. REX is a separate token which is used for the accounting of  EOS resources on the EOS network.

 

Risk-Free: The REX tokens will be redeemable for no-less than the number of EOS that you put in. So if you put in 1000 EOS and no one uses your resources, then you get your 1000 EOS back but if someone does want your REX, then, for example, you may get back 1050 EOS. The following is just an example and the current rate of return is incredibly small but that, of course, could change in the future.

 

In order to be eligible to buy REX, the user must be voting for at least 21 block producers or delegating their vote out to a proxy and when they stake their tokens, they enable developers or anyone else who wants to use their unused resources.

 

Remember: When you are staking, you are basically claiming a percentage of the EOS network resources. That’s whether you decide to use those resources or not.

 

The NOT part is what REX is focusing on as many users have large unused surpluses that could be used others at a very low price. Thus, the Resource Exchange is trying to create an efficient on-chain marketplace for maximizing network resources.

 

The service is already in very high demand as we have seen millions of EOS staked in just the first hours of the REX going live and thousands of buyers lining up to get those cheap network resources.

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IEO replacing ICO: Initial Exchange Offering Explained.

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Initial Exchange Offering (IEO) is a fundraising procedure in which developers create coins for their project and send them to crypto exchanges for selling.

Initial Exchange Offering ( IEO ) is a fundraising procedure in which developers create coins for their projects and send them to cryptocurrency exchanges for selling to cryptocurrency investors and traders.

 

Initial Exchange Offering:

Initial Exchange Offering is usually an agreement between developers and cryptocurrency exchanges, with some of the conditions that are common in the ICOs in the fundraising model. Initial Exchange Offering is an abbreviation for the “initial offer of exchange” – a fundraising procedure in which the exchange takes place on behalf of the token issuers.

 

Although IEO is a relatively new phenomenon in the cryptocurrency industry, it is clear that securities trading is very similar – it can be estimated as a sign of the crypto’s maturity. From Huobi to Okex and Bitmax to Bittrex, the number of cryptocurrency exchanges offering the sale of Initial Exchange Offerings has increased.

 

In order to maintain trust with its customers, the exchange must carry out a comprehensive evaluation of the project before the IEO is launched.

 

IEO replacing ICO:

While in the ICO, it is the developer’s business to ensure that the intelligent contract is correct and that everything goes according to plan, in the IEO model, a third party, such as a cryptocurrency exchange, fulfills the same obligations.

 

Anyone who wants to participate in the IEO token sale must create an account on the exchange platform and fund their portfolio so that they can be willing to buy the token. While digital exchanges were only a platform for cryptocurrencies, the Initial Exchange Offering has introduced a new, value-added business model.

 

Since the Initial Exchange Offering is usually carried out on cryptocurrency exchange, some potential investors may be excluded from the possibility of creating a new account and passing through the verification procedure, which usually takes several days.

 

With IEOs, a cryptocurrency ( not the project developer himself ) acts as a counterpart, facilitating the fundraising process. While the exchanges continue to charge high fees for leading an IEO, the team behind the pawn can shift its focus from marketing and fundraising to the development of its project.

 

The initial offer of Exchange introduces an intermediary to the decentralized fundraising model, which gives cryptocurrencies a strong sense of trust as they participate. You can invest in IEOs by simply having an account on a cryptocurrency exchange. By hosting the IEO on their respective exchange platforms, cryptocurrency exchanges directly confirm the credibility and reliability of the project. For IEOs, token issuers do not have to worry, as the exchange manages the KYC – AML process is also managed by cryptocurrency.

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Analysis: Decentralization is the future

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decentralization is the basis of bitcoin blockchain. A development that has threatened to dig up decentralization is the creation of integrated circuits.

In 2008, when Satoshi Nakamoto wrote down the famous white paper in which he proposed a decentralized financial system, he did so in the context of crumbling banks and governments, which as a centralized institution, caused an economic collapse due to poor decision – making and management. Decentralization is the basis on which the entire Bitcoin blockchain is based, and that is why Bitcoin was created primarily to provide an alternative to the central authorities that operate our current global monetary system.

Today, the concept is challenged by the uncontrolled growth of Bitcoin mining – giants such as Bitmain, a Chinese mining company that continues to generate absurd profits and continues to monopolize the Bitcoin network in pursuit of industry dominance.

 

Ethereum Blockchain

The cryptocurrency economy has come to a conclusion – at least for the foreseeable future – Ether will continue to feed the ICOs and lay the foundations for distributed applications. Called Ethereum’s Proposals for Improvement ( EIPs ), they allow for massive participation in decisions that could radically change the future of the network. However, the use of EIPs Ethereum tries to embody the principle of the blockchain technology, namely centralization leads to errors and inefficiencies, while the network, with the right technology, can make better decisions and work more effectively. So, when companies such as Amazon and Chile’s Energy Authority support Ethereum, they do so in a project that advocates – and through EIPs – real practice decentralization.

 

The need of Decentralization:

Where buildings such as capitalism, money, and democracy need new codes, new software, updated smart contracts, better AI and a more united kingdom, full of corporate social responsibility, equal opportunities, and prosperity shared with all. It is not only software decentralization, but it is also the shift of human values to a new way of thinking about exchanges, energy and the shared future of humanity.

The blockchain technology, which offers an alternative to existing trading, governance and finance systems, has the potential to disrupt the industry and create new and exciting opportunities for billions around the world. A development that has threatened to dig up decentralization is the creation of integrated circuits or ASICs for applications. Even more complicated and challenging to decentralize is the rapidly changing world of hardware and the fact that a large technology company now produces most ASICs on the market.

While many Bitcoin advocates see the blockchain as nothing more than competition for existing payment methods or gold, others believe that the blockchain technology is the harbinger of things the world has never seen before.
Bitcoin’s market share has been declining slowly in recent years, and although many believe that bitcoin will continue to grow, there is a rapid rise in other parts of the blockchain ecosystem. When decentralized blockchain protocols begin to break down the central web services that dominate the current internet, we will begin to see real sovereignty on the internet.

 

The future of Decentralization:

Recently, blockchains have become the focus of attention as the first technology to use decentralized device networks. With the promise of full ownership and monetization of their data, blockchains are seemingly convincing alternatives to older third-party data farms. While blockchains use the increasing movement of increasingly powerful personal devices, they have a relatively limited use case and do not fully exploit the potential of paradigm shifts.

This is decentralization, which is a decisive factor in cryptocurrency and blockchain technology in general.
In addition to the major cases of well – known use, there are examples of massive companies that eliminate a “one – point failure” in their closed systems, for governments that approve university degrees. Secondly, governments have historically been serving exchanges with asset seizures, which have paralyzed merchants who hold large amounts of cryptocurrency in the market. If decentralized exchanges become a real reality, the regulatory war will become even more complex for legislators: their current strategy is to target exchanges that operate under their jurisdiction.

Blockchain technology can provide a new way of confirming identity, ways of moving data faster and cheaper, easier transactions such as payments, claims, and data sharing.

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