Steemit Crypto Academy Contest Season 6 Week 6 - Security Token Offerings STO

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Hello all my friends...
How are you? I hope everyone is healthy wherever you are. I'm fine here too. Today I am grateful that I can still take part in the Steemit Engagement Challenge in the SteemitCryptoAcademy community with its sixs week. I will try to describe this week's topic as follows;

Steemit Crypto Academy Contest Season 6 Week 6 - Security Token Offerings STO

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In your own words, define the STO by explaining its process (how does it work?).

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Security Token Offering or commonly abbreviated as STO is a public offering in which this STO offers security tokens on a crypto exchange that runs on Blockchain technology. STO is similar to an IPO (Initial Public Offering), which also involves the sale of securities to raise capital, and an IPO is carried out by a company when it starts marketing its shares to the stock exchange. Both function to attract investment in the form of fresh funds from investors. What makes the two different is that, as I said earlier, IPOs are carried out on stock exchanges, while STOs are carried out on crypto exchanges.

The Security Tokens offered in STO are investment contracts which are then recorded on the blockchain. The tokens offered in STO are not only around the crypto world, but STO also represent physical assets in the real world such as gold, stocks or bonds. In practice, STO are designed to bridge the gap between ICO (Initial Coin Offerings) that occur in the blockchain space and IPO in financial exchanges.

STO also has several important aspects such as smart contracts which allow automatic execution according to the terms of the contract when certain conditions are met. STO also offers a way to increase capital funds in accordance with government regulations because STO is here to provide convenience and simplicity but with a better level of security so that it remains easily accessible digitally and away from manipulation of transactions in it.

The way STO works is also what you know so far. Conventionally, when investing in a stock, the transaction will be recorded in a document and sent to you, right? In addition, the share transaction will also be written in a certificate of ownership, right? Well, the STO process is almost the same as the conventional method above. When you invest, you will receive a digital coin or token that contains ownership information for the real-world investment asset recorded in the blockchain.

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What does STO bring to the world of cryptocurrencies and also to the traditional financial world?

As we know about STO is a fundraising method that offers tokens based on securities (security tokens) on a crypto exchange that runs on Blockchain technology. STO (Security Token Offering) offers are currently increasingly in demand because of the various benefits they offer that make it easier for people to transfer assets more safely. Various kinds of benefits offered by STO are as follows;

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As STO runs on blockchain technology, it will have higher security. Investors do not need to be afraid when making any transactions because they are recorded and cannot be changed, only renewed.

We know that if investors get hit by an ICO scam they will only end up losing a lot of assets and are left with coins with no intrinsic value or economic value. Whereas in STO, all tokens comply with the rules required by financial supervisory institutions and are guaranteed by securities so that such risks will be very rare.

The traditional security system as we know it hasiki transaction capacity is very slow and the cost is also expensive. However, security tokens offer fast service and lower costs than conventional financial systems. Programmable STO Security tokens are programmable and adopt smart contract technology.

There are no local restrictions or rules that can limit cross-border transactions with security tokens, so their use is much more flexible and profitable for anyone anywhere. Securities tokens can also be traded on certain securities exchanges, so investors have an easy way to liquidate their assets.

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The traditional securities that we know only involve certain individuals in their transactions, while the security tokens are unlimited, and open to anyone with internet access. STOs are also transacted on the free market with fewer intermediaries, thereby reducing the potential for market manipulation.

Every decision must be examined in advance about anything related to it as well as STO. Someone must know the definition and how STO works so that he can understand and have more confidence in the decisions he makes, because anything can happen even when above high security. Even though it is not like an ICO, STO has provided extraordinary benefits for its adopters. In fact, many have raised funds from investors and are currently being developed throughout the world, including Indonesia, whose permits are still in the process.

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What are the differences between STO and ICO, IPO and IEO?

STO is certainly very different from ICO, IPO and IEO. We can recognize some of the differences, but below I will try to describe them;

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Difference between STO and ICO

These two things are similar but not the same, even though the Security Token Offering (STO) and Initial Coin Offering (ICO) processes both take place on the blockchain, but have different token objectives.

ICO-generated Utility Tokens do not give any rights to their holders. If the company goes bankrupt, investors are unable to claim losses, or they are left with coins with no intrinsic value or economic value. Meanwhile, STO provides privileges for the holder in accordance with the securities owned and existing regulations. One of them is getting income from interest, dividends, or profits, which come from real-world investment assets that can be traded.

In addition, in most countries, ICOs are also not strictly regulated under security laws such as STOs so the level of security is also weak and very risky, STOs also have a shorter duration and process and are flexible. Besides that ICO does not deal with any real assets, but STO deals with real assets like gold, stocks or bonds.

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Difference between IPO and IEO

Initial Public Offering (IPO) IPO is a condition where a company will sell some of its shares to the public or the general public or an initial public offering in exchange for funds. In an IPO, investors receive a share of the company they buy with the rules that have been enforced.

Meanwhile, IEO, which stands for Initial Exchange Offering, is a new crowdfunding strategy for blockchain-based projects. IEO was present when the ICO in Tokyo was banned by the government in 2017. Now many crypto projects are turning to using initial exchange offerings to raise funds because they are considered more effective where IEOs act as a medium for selling crypto tokens, and managing crypto asset exchanges.

Now, after we know what IPO and IEO are, then the two must have the following differences;

IPO	IEO
The IPO issuer fully manages all responsibilities	In an IEO, those responsibilities are carried out by a centralized hosted exchange
The IPO process is much slower and less flexible	The IEO process is much fasterand flexible
selling part of its shares to the public or the general public by the Company	Fundraising held directly by the token issuer
IPO offers investment in buying and selling shares only, the process is carried out electronically	the IEO fundraising strategy is carried out through trusted stock exchanges or media exchanges as third parties

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List and explain some types of security tokens?

The main challenge that must be faced by all of us in the world of Cryptocurrency is security. There have been many tactics and strategies used by Crypto Scammers in carrying out their actions so that this will change the view and even the direction of the movement of the stock. Investors will also decrease so that the crypto world will experience a decline.

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However, currently intensive protection is also being developed by several project developers to avoid these things and to give developers and investors confidence to invest, namely with Security Tokens. Security tokens are crypto assets whose prices follow the price movements of certain underlying assets which are issued in a security token offering (STO) mechanism.

There are 3 types of security tokens, namely;

Equity token is a token that makes shares a reference instrument. Just like stock investors in general, owners of this type of token are also entitled to receive dividends or voting rights or even both.

Debt tokens are tokens that make bonds a reference instrument. Just like bond investors in general, owners of this type of token are also entitled to get coupons, full payments on the maturity date and claims on company assets if the company is invalid.

Asset-backed token Is a token that makes assets in the real world other than bonds and stocks to become instruments of reference. These assets can be in the form of property projects, mining goods or assets in other commodity markets.

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Do you think these types of tokens are secure and reliable? if you want to participate how does it work?

The Security Tokens offered in STOs are investment contracts which are then recorded on the blockchain. The tokens offered in STOs are not only around the crypto world, but STOs also represent physical assets in the real world such as gold, stocks or bonds. In practice, STOs are designed to bridge the gap between ICOs (Initial Coin Offerings) that occur in the blockchain space and IPOs in financial exchanges.

So, I think it will have a higher level of security, thereby minimizing the occurrence of Crypto scams. Using a safer token allows investors to invest and develop the project. Of course this will provide better profits because if there is a loss of funds, investors still have assets in the form of a percentage of profit percentage.

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To participate in STO is an easy thing and you can do it anywhere and anytime using the blockchain network. Blockchain serves for network security which we will use later on a decentralized ledger. Apart from that you also have to;

KYC is one thing that is very important because it will reduce the risk of fraud on the network. The in-service guidelines in STO require professionals to make clear efforts to verify identity, suitability and the risks associated with maintaining the business relationship.

This is an important thing to do. We must introduce STO to the world and be known more widely and to whom you will introduce this STO. Knowing and making a list of marketing goals is the main thing as well as forming the right team which must also be known to the public (transparency)

Products thatin building must support security tokens and also provide support and your real action in supporting investors who invest by being directly involved with them and don't forget to choose an experienced team because this will really help you in evaluating and developing the project.

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Conclusion

Security Token Offering* or commonly abbreviated as STO is a public offering in which this STO offers security tokens on a crypto exchange that runs on Blockchain technology. STO is similar to an IPO (Initial Public Offering), which also involves the sale of securities to raise capital, and an IPO is carried out by a company when it starts marketing its shares to the stock exchange. Both function to attract investment in the form of fresh funds from investors. What makes the two different is that, as I said earlier, IPOs are carried out on stock exchanges, while STOs are carried out on crypto exchanges.

The Security Tokens offered in STO are investment contracts which are then recorded on the blockchain. The tokens offered in STO are not only around the crypto world, but STO also represent physical assets in the real world such as gold, stocks or bonds. In practice, STO are designed to bridge the gap between ICO (Initial Coin Offerings) that occur in the blockchain space and IPO in financial exchanges.

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Until here my participation this week, good luck to all my friends and also thank you for visiting my block, nut before I end my post, I want to invite my friends to also participate in this contest @muthmainnah @nyakjaja @okere-blessing @f2i5 @amryksr @preye2 @nadiaturrina @ tocho2 @sailawana @abialfatih @fantvwiki @patjewell @asiahaiss

Finally, see you soon
from your friend,
❤

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