Tokenomica’s Security Tokens Issuance Platform opens the window for everyone to an easier, affordable, and secure way to invest in companies that they want. As STIP will launch this August and the Sandbox version of STIP is already working and investor have a chance to win up to 500 Waves participating in our STO Contest.
Let’s take a look at 5 main reasons to start using STIP for investors.
Quality Assets Only
Since security tokens are created on a blockchain, it is quite common to get them mixed up with utility tokens. In fact, those two instruments have almost nothing in common. In most cases, utility tokens are designed solely to provide access to a service or product that exists on a blockchain platform. They have no other value in their own right, while security tokens are the actual financial instruments which designate existing traditional assets. Just like any existing traditional market instruments, security tokens may grant rights in:
● Virtual or physical assets ownership;
● Financial commitments;
● Dividend payments;
● Direct or indirect participation in the management of the company.
Security tokens created within STIP are treated as “Tokenized Securities” by regulators, thus same traditional securities laws apply for security tokens. This means that a company that issues security tokens has to fully comply with all applicable securities regulations bringing investor protection and setting higher standards for the issuance than ones with ICO.
On STIP Marketplace, you can find the campaign that you want. Above, you can see the whole investment process.
After you click on a campaign, check all important information about the company and STO campaign. Type of shares issued, whitepaper, company’s website available for investors to help them make a well-considered decision.
After the investment is made, all investments are indicated in your profile. All investments made to a certain campaign are indicated when you press the "Invest" button once more.
Invest in Early Stages
Prior to security tokens, there were only two ways that investors could get involved in the early stages of investing, either by becoming an accredited investor or by taking part in crowdinvesting there were two types of fees charged: up to 6% from the whole campaign and 2% from the payout to investors. These factors combined form a major hurdle for potential investors and issuing companies.
With Security Tokens, the barriers are set solely by an issuing company providing an opportunity to offer their assets to a larger investors audience. Security tokens enable fractional ownership by design thereby lowering minimum investments and increasing liquidity. As more people will be able to purchase smaller stakes, many assets that are considered to be illiquid, or not easy to sell can increase their liquidity.
With traditional securities, regulations can vary by asset type and buyer/seller/issuer jurisdictions, the same goes for security tokens. But when securities are tokenized, compliance becomes automated meaning that security tokens may then be traded anywhere where they are deemed as being compliant. Blockchain technology and smart contracts make it possible to include ownership and regulation directly into a token meaning that the smart contract will be able to execute, regulate and govern the token. For example, a Security Tokens can be programmed to verify who can buy them and therefore restrict Security Token holders from transferring (i.e. buying or selling) them to a non-eligible counterparty.
When you purchase a share of a company on a financial market, you’re entrusting the stock issuer, as well as a long list of third-parties who help facilitate the process: Brokers, Transfer Agents, Registrars, Clearing Firms, Custodians. With security tokens, there are only two entities you’d have to trust: the issuer and the issuance platform. Because the number of intermediaries is significantly decreased, chances of corruption and manipulation by third-parties are reduced to a minimum as well.
Another problematic process when dealing with traditional securities is the settlement: traditional securities take at least 2 business days to settle. Exchanges like the Nasdaq and NYSE can execute trades very quickly, but settling asset transfers takes time. Currently, settlement cycles for most broker-dealer transactions are T+2, meaning it takes 2 more days after a trade has been executed to transfer ownership rights.
Security tokens are built using blockchain technology that allows transactions to be executed much faster. Trades on a blockchain settle in a matter of minutes rather than days. Improved settlement and reduction of excessive third-parties are not the only benefits of technology that security tokens are built upon. Along with that, blockchain helps to:
- Simplify accounting and auditing processes;
- Lower issuance fees by removing the middleman (banks) from the investment process. Lower issuance fees for issuers means that the initial price of the token will be lower for investors as well;
- Decrease the role of lawyers in the process (in the long-run) due to the use of smart contracts;
- Automate dividend payouts;
- Make the voting process easier. Investors are able to take part in shareholders voting from any part of the world, everything they need is a computer.
The Potential for 24/7 Markets
Most traditional markets are tied to strict working hours. For example, most US stock markets open trading at 9.30am and close at 4.00pm each weekday, with the exclusion of holidays. After Friday’s closing bell you cannot trade stock again on the major exchange for roughly 65 hours, and even up to 89 hours on a holiday weekend.
While markets are closed, any number of influential events may occur. Security Tokens are available 24/7. By enabling around-the-clock trading of assets, investors get an opportunity to act on new information in a timely manner. This also allows expanding investment geography by opening up access for investors across a range of time zones.
STO Contest for Investors
There are 3 separate categories for investors:
Three users that will invest in the biggest number of STO Campaigns on STIP Sandbox will receive a total prize of 1 000 Waves: 1st — 500 Waves; 2nd — 300; 3rd — 200 Waves.
Three users that will invest in the biggest number of successful STO Campaigns on STIP Sandbox will receive a total prize of 1 000 Waves: 1st — 500 Waves; 2nd — 300; 3rd — 200 Waves.
3) “Fortunate Son”
All users that will make at least 3 investments on STIP Sandbox will take part in the drawing of 1 000 Waves. There will be 10 winners that will receive 100 Waves each.
We are still working on the further development of STIP and we will be delighted to get feedback from our users. If you have any suggestions on how we can improve the final product or need any help launching your STO, feel free to contact us in our Telegram chat. Best of luck!