This is my entry for the sponsored writing contest organised by 
Source: https://www.mobu.io
INTRODUCTION - INITIAL COIN OFFERING
Initial Coin Offering (ICO) is sometimes referred to as Crowdsale. This is a process when a new cryptocurrency business releases it's own cryptocurrency with a purpose of funding. It usually releases a certain number of TOKENS and then sells those TOKENS to it's intended audience. In an ICO campaign, a percentage of the cryptocurrency is sold to early backers of the project.
TOKENS
There are at least three major types of ICO tokens in current use. These are Equity, Utility and Security Tokens.
Equity Tokens - One of the most perspective applications of smart contracts is the potential for start-ups to issue stock or equity tokens through Initial Coin Offerings. This benefits start-ups since the barrier to entry into the financial markets is lower. It makes stock trading more accessible to an average investor. However, this method is less attractive due to the fact that there is current lack of regulatory guidance.
Utility Tokens - They provide the user with access to a product or service. They are sometimes called app coins or app tokens. Utility Tokens will normally appreciate over time if demand for the product or service increases because total supply is fixed.
Security Tokens - These are tradeable assets. Investors have access to a wide variety of Security Tokens through ICOs. A token is described as a security if it involves "an investment of money. And a common enterprise. With the expectation of profit, primarily from the efforts of others" by Cooley LLP Fintech Team Leader Marco Santori.
Source: https://medium.com/mobu-io
There are three major differences between Utility and Security Tokens and they are listed here under:
- Security Tokens are subject to federal laws and regulations whilst Utility Tokens are not. Security Tokens have the status of the stock while Utility Tokens act as coupons on the web.
- Security Tokens' value may change in accordance with the success of the platform. This is a similar principle with traditional stocks in a Initial Public Offering (IPO) setup. The value of Security Tokens is derived from tradeable assets whilst the value of Utility Tokens is mainly dependent on the users and their activity within a platform.
- With Security Tokens, real profits are realized. ICOs that utilize the Security Token model usually notify stakeholders how their profits will be appropriated. Utility Tokens, despite their current value, always serve an in-platform coin.
An example to illustrate the above points is Filecoin. Filecoin raised $257 million with plans to provide a decentralized cloud storage services that will utilize unused computer hard drive space. ICO contributors received UTILITY TOKENS that they will use to purchase storage space from Filecoin once the service has launched.
Source: https://medium.com/mobu-io
SECURITY TOKENS
Security Tokens have major advantages over IPO and Venture Capital investment markets. These advantages include but are not limited to:
. Lower fees are involved to launch an ICO than an IPO
. There is immediate transfer of investment transactions
. Because of the ease of performing global transactions with cryptocurrencies. Security Tokens bring with them free market exposure of assets
. Since deals are done online, the potential investor base is dramatically increased.
Again, almost all ICOs launch Utility Tokens because they avoid laws and regulations associated with Security Tokens. As a result the Security Tokens market still remain an untapped resource on the blockchain.
THE PROBLEM
Despite these rather glaring advantages and obvious potential to tap into this market, there still remain problems that businesses who try to enter this space face. The major problems for potential businesses in the Security Tokens market are:
- Strict federal laws and regulations
- Technical processes which are difficult for non-tech businessmen
- Complicated procedures
Source: https://medium.com/mobu-io
MOBU
MOBU took a decision to venture into the Security Tokens market. This was based on the opportunities that the company identified in this niche. And so was the challenge to resolve burning issues bedeviling this market.
MOBU prides itself as a "next generation user-friendly smart contract and all-in-one platform for real businesses (security tokens)", in their website https://www.mobu.io.
And also as a "decentralized Organized ICO platform for Security Tokens" , in their White Paper https://www.mobu.io/assets/mobu_whitepaper.pdf?80172489074.
The MOBU tokens will be standard MOB20 and will power the new MOBU ERC20 platform for issuance and trading of regulatory compliant securities on the Ethereum blockchain, though they will also be compliant with other blockchains.
THE SOLUTION
As a solution to the problems in this market, MOBU came up with an intervention. The solution package entails:
- MOBU will offer a decentralized and organized ICO platform which will facilitate the release of compliant security tokens on the blockchain.
- MOBU will create an abstract smart contract from which all Security Tokens ICOs will be extended.
- MOBU will introduce a new innovative method of escrow services to ICOs which will allow investors to exit the ICO after the crowdsale on a pro-rata basis if the ICO issuers do not adhere to their set roadmap and goals.
- A "lockup" utility to MOBU tokens for service providers, which will be be introduced to access services rather than spend the tokens, will create scarcity of supply in the market and increase demand and value of the MOBU token.
- As MOBU will boast a regulatory-friendly token and a user-friendly platform for trusted ICOs, both will allow institutional money to enter the blockchain and non-technical businessmen to participate in the blockchain.
The overall aim of these tailor-made solutions is to ensure higher overall return-on-investment for investors and create a network of confidence and trust that will boost economic efficiency and bring incentives for community growth.
Please visit the MOBU whitepaper at https:www.mobu.io for details.
Source: https://medium.com/mobu-io
CONCLUSION
The qualified and experienced Management Team backed up by a strong Board Of Advisors should without a doubt deliver a high quality end product.
MOBU is an end-to-end which lowers barriers for launching security tokens on the blockchain. MOBU is an ecosystem that implements a unique MOB20 standard protocol to ensure the protection of both investors and ICO issuers to create a more competetive ICO services pricing environment which complies with SEC and other regulations including KYC/AML.
SOURCES:
Website: https://www.mobu.io
Whitepaper: https://www.mobu.io/assets/mobu_whitepaper.pdf?80172489074
Medium: https://medium.com/mobu-io
The Team: https://icobench.com/ico/mobu/team