Is STO replacing ICO as the ‘new sexy’ in the cryptocurrency community
The 2017 boom in cryptocurrency initial coin offerings (ICOs) due to the success of Ethereum was followed by a sharp decline and extended bear market in 2018, amid increasing regulatory concern over fraudulent incidents. According to a comprehensive token report by Fabric Ventures, 58 per cent of all ICOs in 2018 failed to raise capital, disappeared, or refunded participants. However, the decline of ICOs has opened the door to a new type of token offering, the Security Token Offering (STO), which according to Nasdaq, is “set to take centre stage in 2019”.
A Security Token is a cryptographic token that shares the profits, pays dividends or pays interest to the token holder based on an underlying asset, such as shares, bonds, real estate, or art collections.
This is different to a Utility Token, which is used to purchase a good or service offered by the issuer of a particular cryptocurrency.
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