Why is STO better than ICO?
Why is STO better than ICO?
STO Vs. ICO: The Difference Between The Two
Initial Coin Offerings (ICOs) have gained much attention over the past year as an ideal crowdfunding solution. Still, the lack of proper regulation has been a significant problem that has also paved the way for fraud. However, there is a new crowdfunding solution called STO.
The differences between ICOs and STOs
One might be hard-pressed to think that the two are primarily different, but they are somewhat similar. However, to understand what an STO is, one must first understand ICO. The latter refers to a token offering from a company or organization to raise capital for a project. Buyers issue with digital tokens. Unfortunately, ICOs are mostly unregulated, thus putting investors at risk.
Many investors focusing on blockchain and cryptocurrency-related opportunities have lost money from fraudulent ICOs by fraudsters that have elaborate scams aimed at earning them some quick, easy cash. Including the lack of regulatory guidance are the reasons why ICOs have received much opposition from regulators. An STO is a token offering that is similar to an ICO, but the main difference is that STOs are regulated.
STO Vs. ICO – Explained Infographic
Bridging the gap between crowdfunding and regulation in blockchain
STOs register with the Securities and Exchange Commission (SEC), and they take advantage of securities exemption such as Reg A+. They, therefore, have many similarities to shares. For example, tokens issued in STOs give investors some rights to the firm or organization issuing them.
The registration with the SEC is one of how STOs promise to offer more security to the investor. This is because the registration with the regulator discourages fraudulent individuals, thus allowing only the projects that are legitimate and serious about their pursuit. The registration process is also similar to the registration process for Initial Public Offers (IPOs), and this not only a positive step for investors, but it should also eliminate government concerns.
Market experts are highly confident about STOs, and they believe that the market cap will be more than $10 trillion by 2020. In comparison, ICOs have raised roughly $4 billion so far. ICOs might have dominated the crowdfunding market in 2017. Still, this year, the concept of STOs is expected to take off massively by providing investors with safe investment opportunities. Many believe that it might finally be the highly sought-after solution for crowdfunding through the cryptocurrency market.
The company behind the STO idea
The idea of ICOs has been tossed around by a blockchain startup called Polymath headed by Trevor Koverko. The concept expects to gain traction quickly because the crowdfunding market has been seeking a better solution, and STOs bypass the problems associated with ICOs. It also highlights the ongoing trend where regulators have been working together with companies in the blockchain cryptocurrency market to create solutions that will bring more order.
Regulation in the sector of Grand Crypto Technology expects to encourage more investors to jump in because grandcrypto.tech investment is futuristic, durable, reliable, no risk and profitable, because its doubles investment within seven days of placement to make it a 100% profit for all investment