ICO vs STO – Here is what sets one apart from another!

As depicted by the Best ICO smart contract development company, ICO (initial coin offering) is the decentralized way of fund-raising in the digital world and is token-based. An STO (security token offering) is a fundraising method to help to support crowdfunding and carry out financial transactions at the same time. Both forms of fundraising methods can be quite similar in some terms or the other, but ICO is blockchain-based and an STO can be regulated.

Initial coin offering or ICO – Why should crypto investors opt for it?

Mainly used by the start-ups, launching an ICO works is a substitute of raising funds for the company’s share. ICO service in Kolkata is developed for launching ICO by fulfilling all the needs and requirements and offers the investor tokens in return for the investment in the project as per the set parameters on the smart contract.

However, to launch an ICO successfully, it is best suggested to hire the experts rendering industry-standard ICO development services. These blockchain developers can help with the creation of new tokens and provide end-to-end ICO launching services as well.

Launching an ICO can be advantageous to crypto investors in certain ways by –

•    Helping with the stable and faster sale of tokens.

•    Helping facilitate the supply process of cryptocurrencies across the globe.

•    Helping attract potential investors after developing an open ICO platform.

•    Helping increase the value of the tokens you like to circulate, leading to high returns.

Launching ICO has always been a fruitful way of funding, and companies specializing in ICO launch can help with innovative ways and strategies to help your business grow.

Security token offering or STO – Why should crypto investors opt for it?

Same as ICO, an STO is also a fundraising mechanism best suited for startups and help them sell tokens functioning the same as traditional securities. STO development company Kolkata is the right place to launch an STO, the issuance has to be blockchain-based because can only be issued once there is a supporting infrastructure supporting such mechanism.

In case of an STO, the platform should be capable of managing security tokens and adhere to the KYC and AML policies as well. STO platforms are centralized and have to be regulated and properly licensed in order to trade commodities. However, to sell security tokens the fundraising projects have to stick to the legislative regulation and rules of the local financial bodies in many different aspects, starting with marketing and ending with the KYC process.

Launching an STO can be advantageous to crypto investors by –

•    Offering a cheaper investment solution with no involvement of intermediaries.

•    Dividing a large part of the asset into smaller part as STOs are digital assets.

•    Being fully regulated by governing bodies.

•    Helping acquire underlying assets deriving the value from something else.

The good thing about STOs is that it is launched by complying with the regulations of governing bodies and by meeting all legal requirements as well.

How can be an ICO different from an STO?

As mentioned earlier, an ICO is entirely meant for raising funds in a decentralized ecosystem and most of the ICOs are used to position the utility tokens only to bypass the centralized regulations. The investors launch an ICO to distribute their tokens to be sold. ICO is blockchain-based and unregulated, so the investors are not at all protected from any fraudulent crowd sales or projects that don’t deliver as promised, and is highly volatile as well.

As per the best STO development company Kolkata, when talking about and security token offering, STOs are simply launched to abide by the regulatory norms set by centralized bodies or governing bodies. Only regulatory complaint financial bodies are authorised to sell and purchase security tokens. There is a lot of compliance work that needs to be completed before launching an STO, which is why it is easier to launch an ICO compared to STO.

According to the Best ICO smart contract development company, both form of fundraising mechanism has their share of differences of their own and is highly suited for the start-ups and the new project developers interested in buying or selling of the tokens without any hassle. The only thing here is to decide for yourself is where you want to engage to fulfill all your project requirements.