STO – The IPO of Cryptocurrency
2018 was the year of a bunch of failed ICOs. But what is this new STO about? STO is the short form of security token offering. Different from an initial coin offering (ICO), STOs are asset-backed and have to comply with regulation.
After raising billions of dollars through 2017 and 2018, the ICO market is starting to cool off a little. It’s not that there’s no more interest from developers, managers, and consumers. Quite the opposite.
For example, Telegram’s ICO is expected to make well over 2 billion dollars. Johnny Depp-endorsed TaTaTu raised over $500 million last year.
Having said that, many ICOs never turned into real projects – and the market has cooled off as a result. Right now, the public appears to be far more interested in STOs – Security Token Offerings – which are projected to be worth $2 trillion by 2030…
In South Korea alone.
In this article, we’ll explain what STOs are, how they’re different from ICOs, and why they’re becoming such a big deal so quickly. We’ll start with…
The difference between STOs and ICOs
An ICO is an initial offering from a team or an established organization. They’re almost completely unregulated, which means that investors are exposed to an infinite amount of risk.
An STO is similar to an ICO. The difference is that the offering consists of a real security that’s regulation-compliant and bound by law. Put simply, ICOs give investors digital tokens backed by nothing; STOs give investors tokenized securities.
This is a big enough difference as is – but as you’re about to discover, the deeper implications of STOs are rather incredible.
Why STOs are Important?
STOs are regulation-compliant alternatives to ICOs that deliver real securities. This means that virtually any kind of asset available via regular securities – commodities, stocks, real estate shares, etc – can be offered via an STO.
This has 2 important implications. First, STOs can help bridge the gap between the world of blockchains and the traditional financial system. This is hypothesized to create a new $10 trillion security token market in the next few years.
Perhaps more importantly, STOs are regulation compliant meaning anyone can buy them. Banks, pension fund users, and other people previously shut out of the ICO revolution will finally be able to get involved.
Last but not least, STOs are good for regulators because they’re designed to comply with laws and regulations. This will remove a lot of the resistance that institutions have shown over the past 2 years and protect consumers and casual investors from fraud.
How soon will the STO revolution happen?
You may have noticed that crypto markets were comparatively quiet through 2018. That’s because many projects are currently working hard to create the legal, technological, and consumer-side systems necessary for effective STO rollouts.
Unfortunately, none of this means that STOs will become common in the near future. We may have to go through another year or two of crypto niche development and consolidation before projects like Polymath really hit their stride.
In the mean time, you can start investing and trading crypto using the coins that are more stable.
One place to start getting involved is our platform, CoinCola. We’re a hybrid exchange and OTC marketplace, and we have a knowledge base that helps beginners learn the ropes quickly. Visit our User Guide and learn everything you need today. With over 100,000 monthly transactions, we’re one of the most trusted crypto projects on the web.
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