Right from the birth of Blockchain Technology and first ever cryptocurrency, the blockchain network, and cryptocurrency platforms have experienced an uprise in the launch of strategies such as ICO, IPO, tokens, equity token offering, etc. The Blockchain network is continuously growing with the introduction of cryptocurrencies every year.
Bitcoin, the first cryptocurrency launched before 9 years is still ruling the present crypto world. This form of currency has created a new way of thinking about the safety of fiat currencies and the general transaction way that the world uses.
The introduction of digital currencies has brought a new thought in the financial sectors across the world as it creates the perception of a decentralized form of transaction. This platform continues to grow and more application of this system continue to create.
With the fact that this is a unique and thriving industry, many people try finding ways of investing or owning these cryptocurrencies whereas these companies also look to amass funds to develop and run the networks and for-profit making.
This has imprinted a great effect in Initial Coin Offering platforms! In ICO, the network offers different forms of tokens depending on the application and network setup. These tokens are Equity, Utility and Security Tokens.
This article mainly focuses on strategies of Equity Tokens and how it can help businesses!!
Let’s move on to the discussion!
What is Equity Token Offering?
To speak about this token, these are the stocks offered by any startup where individual investors or companies will be a part owner of Blockchain and voting rights over the Blockchain. These tokens actually provide a form of security to the traders as they are associated with the growth of the Blockchain network. The fact behind this is, these tokens are mutually interchangeable.
Equity Token Offering Services is a mode of fundraising that involves the issuance of Blockchain strategy. These tokens can be issued in both private and public platform through any regulatory country.
The most common query every trader comes up with is the primary difference between Equity, Utility and Security Tokens.
Equity Tokens Vs Utility Tokens Vs Security Tokens
Before launching ICO and other token platforms, it is highly suggested that you know the difference between the tokens. These the major differences encountered with these three tokens:
|All Equity Tokens are Security Tokens.||All Utility Tokens are not either Security or Equity Tokens.||Some Security Tokens can be Equity Token.|
|These Tokens represent asset ownership.||Utility Tokens are used to access service or products.||Security Tokens represent a share in the company that sold them.|
|An Equity Token implies ownership and control.||Utility Tokens are not designed as investment tools.||Security Tokens are backed by tradeable assets.|
|The ICO’s are heavily regulated in some countries.||The ICO’s are not regulated since the tokens do not count investments.||The ICO’s are heavily regulated in some countries.|
The process of Equity Token Offering:
To conduct Equity Token Offering Development for any blockchain company, the following steps can be useful!
- Registration to an Exchange Platform
This step involves registering the Blockchain Company to an exchange platform in an instance where the company does not have its own platforms. This actually requires the company to put forth the company’s registration documents or other documents for identification and verification.
- Commercial Terms
Creating commercial terms involves specifying the terms of offers to potential investors. This requires the company to state its value and present the total amount of investment available.
Once the commercial terms are stated completely, a contract is signed between the company and token holders. Thus this enables the company to create the public listing details on the website for investors to follow up on.
- Pre Equity Token Offering
This move enables to offer its token to a set of investors, particularly high-worth investors where a set amount of tokens can be offered to them before the public offer. This stage can also be used to enhance the full intended amount in a case where these investors buy all the tokens being offered by the company.
- Public Placement
This stage occurs only when the maximum funding amount is reached. Therefore, this means that the remaining fund will be issued to the public. This then sees the end of the financing stage where an investment agreement is signed with the token holders which picturize the release of all purchased token to the investors.
- Shareholder’s Community
This is created whenever any form of a share is sold to the public. The company’s responsibility, in this case, means to ensure shareholders have access to the company’s activities and information. This involves voting platforms, reporting tools and payment modes to the token holders.
Once these whole set of equity token ico process gets done, new Equity Tokens can be done as a follow-on to create more fundraising efforts.
List of Equity Tokens in the market:
These tokens are primarily categorized into two:
- Dilutable Token
- Dilutable Tokens tends to reduce the ownership percentage from the company share of stock.
- For instance, If the company shares 50 shares to 50 individual shareholders each holder will hold 1% ownership from the company.
- Non-Dilutable Token
Non-Dilutable prevents investors from the dilution of an equity position. In these stages, the percentage of stack value get decreased when the total number of shares increase. Also, share value can get improved when new shares being issued due to the round of equity.
Dilution is a concern for preferred shareholders if the stock issue laterally when the price cheaper than their current shares would dilute their total ownership.
Mostly superior of Dilution process will be helpful to gain more profitable ROI.
Benefits of Equity Tokens:
There are a hell lot of benefits associated with tokenized equity. Here are a few for your need to know:
These tokens are the most proven token economy in the world. They are similar to stocks or shares.
- Keep Control
It is possible to issue tokens as non-voting shares, so you don’t give control of your company but allow investors to trade safely.
- Retain Value
Your tokens will retain the value as long as your company is making money.
- Align Interests
You will align your investor’s interest with your own for Equity Token Offering Platform Development.
- Feel Secure with Regulations
If you go with Equity Fundraising model pertaining to security, according to your local regulator’s laws, you can remain calm and safe.
- Voting Rights
Similar to shareholders, equity token holders have the right to vote in the decisions of the company, hence ensuring the transparency factor.
- Cash Flow
The company’s cash flow for a share is on the smart contract, making it immutable. The company can be clear about its earnings, per token, with its investors.
- Automated Dividends
The dividends from the investment will be transferred to the investor’s wallet straight away! The wallet is secured on the Blockchain using Elliptic Curve Cryptography technique.
- Holdings in another fund
The equity tokens can be deposited into a fund who can handle the funds in an efficient way!
What are the Features of Equity Tokens?
With the rise in Token Development, there is also a huge uprise in ETO Development & Launch Company across the world.
Here are the features you need to be aware of:
- Programmable Equity
The digitized tokens can assist you with taking the complete control of illiquid asset into an equity issuance through a programmable code.
- Enhanced Market
Provide assurance to investors with its recognized structure and advancement in technological domains, which can possibly result in gaining trust for investors.
- Personal Blockchain
These popular tokens are created on your own Blockchain, which gives you complete access and control.
- Backend Dashboard
With ETO Development Services you will be leveraged with a complete panel for you to manage retail and institutional investors such as dividends, buybacks, and announcements.
- Global Capital Investment
Equity Token provides trust and reliability to the investors joining the crypto space leading to a larger pool of capital investment.
- Regulatory Compliance
By building SEC compliant tokens, one is assured of high-end regulatory compliance.
- Secure Wallet
The Wallet is composed as a multi-signature, multi-device wallet on a blockchain with elliptic curve cryptography scheme, which makes the storage of funds more secure.
Future of Equity Token Offering
Equity Token launched as the Version 2.0 of Initial Coin Offering strategy, is packed with huge benefits for the future!
What can they be?
- ETO can change ICO Landscape
ETO’s can be popular in the upcoming future. More companies will consider selling ET through ICO’s to raise the funds instead of utility tokens.
- Equity Tokens will be popular than Utility Tokens
Moreover, Utility Tokens will lose their popularity to Equity Tokens. This tokenized equity will be sold in a high-liquidity environment.
- More Aligned with the future
These tokens will be robust in the legal environment. Some regulators are in favor of Equity Token Crowdfunding and would treat them on the basis of Security.
ETOs are universally considered the future of ICOs by experts around the world. Once the legal stand is clarified and as companies and startups adopt this model in larger numbers, a clearer picture will begin to appear. Without a doubt, ETOs hold the key to the future of fundraising on the blockchain and are here to stay.
On a final note, having considered the intensities of ETOs and its uncomplicated nature, ETO’s are likely to be ranked as the highly-preferred method of fundraising. It ensures investors security. There is also, the utility added to both the company and investors and is affordable and faster than other capital raising avenues.
Where to get Equity Token developed?
Well, so need an Equity Token to be developed? You are already landed at the right place!!
We, Icoclone, ETO Development company are here to assist you and cater to your unique requirements. We have desired expertise in diverse areas pertaining to Equity Token Offering and would customize the product in accordance with your expectations!
Wondering what features you will be rendered with?
Now issue equity in real-time with a single click. Simplify your Equity with our Smart Contracts.
With our ETO platform, one can be assured of reduced costs, thereby saving the money and onboard stakeholders for less!
Is there any factor needed more than a trust? Now eliminate the errors and clarify with the most transparent and traceable system.
One can effortlessly invite Stakeholders such as co-founders, employees, investors, and advisors to share the information.
- Document Storage
A safe and secure place for all your team files.
Why still waiting in the wings? Contact us right away to get your product developed instantly!!
Happy Crypto Reading!!