ICO and STO
ICO is short for 'Initial Coin Offering'. That means 'initial cryptocurrency disclosure'. Initial disclosure means that investments are made by releasing the cryptocurrency first and selling this stake before any product or technology is released.
The information that investors can have is limited, but investors are willing to invest in the coin by looking at white papers issued by the company or the people and partners participating in the company.
Following this approach, ICOs are criticized for being blind investments. This is because there is no information available to investors compared to IPOs listed on stocks.
Amounts raised through ICOs are considered not investments but donations, and there is no legal regulatory mechanism to make investment returns difficult.
Unlike ICOs, which only take tokens, STO (Security Token Offering) also takes the right to invest. Unlike ICOs, which were made in the form of donations, STOs are similar to stocks and are guaranteed the right to invest.
*It is called a “real investment,” or “securities token,” because it can receive dividends or take part of its management rights.
- The STO must have a 'real'. STOs must be held in the form of companies, real estate and bonds.