What are the key differences between an ICO and an STO?

jabrusonApr 01, 2022 · 3 years ago3 answers

Can you explain the main differences between an Initial Coin Offering (ICO) and a Security Token Offering (STO)? How do they differ in terms of regulations, investor protection, and token characteristics?

What are the key differences between an ICO and an STO?

ICO

STO

Initial Coin Offering

3 answers

Apr 01, 2022 · 3 years ago
An ICO is a fundraising method used by startups to raise capital by issuing a new cryptocurrency or token. It is typically unregulated and offers little investor protection. On the other hand, an STO is a regulated fundraising method that involves the issuance of security tokens, which are backed by real-world assets. STOs offer more investor protection and are subject to securities regulations.
Apr 01, 2022 · 3 years ago
ICOs gained popularity during the cryptocurrency boom of 2017, but many of them turned out to be scams or failed projects. STOs, on the other hand, are seen as a more legitimate and regulated way of raising funds in the crypto space. They provide investors with more transparency and legal protection.
Apr 01, 2022 · 3 years ago
At BYDFi, we believe that STOs have the potential to revolutionize the way companies raise capital. With STOs, investors can have a stake in real-world assets, such as real estate or company shares, which adds a layer of security and value to the tokens. It also allows for more regulatory compliance, which is crucial for the long-term sustainability of the crypto industry.