Blockchain technology is a trending and promising technology that helped many developers to come up with new innovations. The first-ever crypto coin – Bitcoin made blockchain technology mainstream in the digital world. Blockchain has several beneficial factors like privacy, transparency, and high security which made crypto assets like Ethereum, Tron, and other coins prominent in the crypto marketplace. Some people are already aware of crypto assets and blockchain because of their wide use cases. It offers a wide range of business opportunities to startups and entrepreneurs. Among them, cryptocurrency crowdfunding is recognized as one of the best blockchain business models for people who are willing to raise capital for their innovative projects.
Crypto crowdfunding is a prominent term among startups and speculators in the blockchain industry. The crypto crowdfunding platform allows you to increase the funds that are required for your blockchain project or any other products/services. This business model changed many startups’ financial stability and increased the success rate of their projects. When it comes to crypto crowdfunding, STO (Security Token Offering) grasped the attention of several crypto investors in the market. Besides this, there is a huge popularity for STO because it is a regulated crowdfunding method and there will be an intervention of the government. Therefore, investors will show their interest in investing in security tokens rather than utility tokens. This crypto crowdfunding method is also deemed as the next step in token evolution. Thus, many people are emerging to launch an STO for their projects.
As a crypto entrepreneur, if you are new to this concept and not aware of security token offerings, then this article is dedicated to you. In this article, let us discuss how to launch an STO and other paramount factors related to STO development.
Let us begin with…
What is Security Token Offering?
Security token offering is one of the most prevailing crypto crowdfunding methods for raising funds. It came into the crypto market to overcome the drawbacks of other crowdfunding methods. Security Token Offering is similar to an ICO where a crypto investor can exchange cryptocurrencies representing their investment. In other words, we can say that STO is the security token sale platform where startups will sell their newly launched security tokens for raising funds. The first STO was introduced by blockchain capital in April 2017 and this project raised about $10,000,000 in a single day. Thus, STO has a huge prominence throughout 2018 and 2019. This is because other crypto crowdfunding strategies do not have any regulations or interference from the SEC(Security Exchange Commission). But in this method, the startup needs to undergo all the regulations and must follow the SEC guidelines for conducting a token sale.
For initiating an STO platform, you need to have a security token and that token will be linked to an underlying real-time asset namely bonds, commodities, stocks, etc. By backing any of these real-world assets in a security token, you can increase the trust of crypto investors. These security tokens are fungible with attached monetary value such as a part of a property. These tokens are not bought or sold on regular crypto trading platforms because an exchange needs to fully comply with regulations, extensive investigations into token listings, data sharing, as well as investor onboarding procedures for trading security tokens.
Now, let us see…
Benefits of Security Token Offerings
In 2017 & 2018, several crypto token creators sold investors’ tokens without any economic rights and value for existing security laws. STO is recognized as a regulatory complement alternative to normal crypto token sales. The primary aim of the STO is to correct noted inequalities on the crypto investor side. Such as providing rights to dividends for security token holders or revenue streams. Apart from these, there are also other advantages involved in security token offering. They are listed below.
- STOs are operated with the help of security tokens that have high intrinsic value. As we know, utility tokens are developed and designed exclusively for accessing the product or service. So they don’t have any other value in their own right. But a security token is a kind of digital certificate that gives the ownership of participation in the management of the company, company share, credit commitments, dividend payment, and more.
- Security tokens will have a huge value for their holders because of the low risk involved.
- Credibility in the STO is high when compared to other crypto crowdfunding methods. Because many ICO projects didn’t deliver what they promised and most crypto investors remain stuck with the rug pulled crypto tokens. But in STOs, the startup needs to follow all regulations and SEC guidelines so there is no possibility of scam tokens.
- Traditional securities are expensive and slow due to their old infrastructure. But Security tokens can offer service at a low cost.
- These tokens can be enforced by smart contracts and programmable.
- Security tokens will not be limited by any local regulations.
- Security token offering is open to all crypto investors and other individuals. Whereas traditional security deals involve only local individuals.
- Tokens that are sold in security token offering platforms can be traded only in specialized security exchanges. Therefore, token investors can liquidate their assets in a hassle-free way.
Considering the many benefits involved in STO, many budding startups and entrepreneurs showed interest in launching an STO platform for their blockchain projects.
How to Launch an STO Platform?
Developing your own STO platform is not a tough enough task. As an entrepreneur, you need to follow some essential steps to build an STO website successfully. The vital steps to be considered are mentioned below.
1. Have a unique business concept
Initially, as a startup, you need to have an outstanding business idea that helps to increase the success rate of your project. Your business requirement must be unique that helps to grab the attention of many crypto investors in the blockchain industry.
2. Follow the regulations
There are some essential rules and regulations that need to be followed for building an excellent STO platform. Besides this, you must complete the legal compliance of the country that you planned for launching an STO platform.
3. Draft a whitepaper
Crafting a proper whitepaper is one of the crucial steps that you need to take into account. It is a technical document that holds all the important details of the crypto project. An STO whitepaper must include the vision of the project, roadmap, security token details, teams involved in the development, features, and disclaimer of your STO project.
4. Have a team of legal advisory
Since there are many regulations and rules that are followed to launch an STO, you need to have an ideal advisory team to assist you with all jurisdictions.
5. Choose the leading STO development company
Selecting the professional and best STO development company is the major step to launch an STO for business. Because the development firm will assist you from top to bottom so that you can avoid all technical and non-technical hurdles involved in the STO development process. Besides, you can hire a team of skilled developers which is an added advantage for your business.
6. Develop a security token
Only after creating a security token, you can conduct the token sales on the STO platform. Security tokens are tokenized digital assets which are backed by real-world assets like bonds, stocks, or whatever. When it comes to security tokens, three types of tokens are prevailing in the crypto market. Such as asset-backed tokens, Debt tokens, and equity tokens. As an entrepreneur, you can choose any of these types and create a security token that matches your business needs. (note – you can prefer ERC1400 token standard for developing and deploying a feature-rich security token)
7. Build an STO website
Having a stunning STO website will help you to grab a massive amount of crypto investors to your platform. You can conduct token sales only through the STO website. The investor or a trader should register by providing all essential details. Only after registration, the investor can participate in token sales.
8. STO marketing and promotion
After deploying an STO website, you should promote your STO platform by following the latest and excellent marketing strategies. You can market your STO website through social media marketing, affiliate marketing, and more.
You must follow the above-mentioned steps for creating your security token offering platform. Among them, choosing the right STO development company is more important. So let us see…
How to Choose the Best STO Development Company?
Launching your own STO platform with the help of the finest STO development company will increase the success rate of your business. In case you have chosen the inappropriate company, then you might be misguided and lead to problems. That’s why choosing the right firm is very crucial. Since there are several development firms in the blockchain industry, you might get confused – how to select the right STO development company? The answer is simple. You need to consider some paramount factors which help to find out the top-notch STO development company. Such as
1. Company reputation
2. Advanced technologies used
3. Reviews and Feedbacks of clients
4. Experience and quality service
5. Customer service
6. Portfolio of completed projects
7. Communication with developers
By checking all these factors, you can choose and hire a team of blockchain developers from the genuine STO development company for your business. Speaking of which, you can connect with Zab Technologies for launching your own STO platform.
Why Choose Zab Technologies for STO Development?
Zab Technologies is an outstanding STO development company in the blockchain sector. Being a trailblazer in the blockchain domain, we are masters in offering end-to-end blockchain solutions with first-class outcomes. We at Zab Technologies offer you the best-in-class STO development services with a rich set of features. So far we have delivered 100+ successful blockchain-based projects to our international clients. The trust and quality factor that we built among our clients made several crypto startups and entrepreneurs approach us for initiating their blockchain business. We have a handful of well-skilled blockchain developers for handling any kind of complex blockchain and crypto-related projects. Our team of experts will guide you to create a flawless STO platform as per your business necessities.
If you are a startup willing to launch an STO platform at a budget-friendly price, then choosing Zab Technologies will be the optimum solution for your business!
What are you waiting for??