STO is the future of technology finance. Do you really understand?

STO is the future of technology finance. Do you really understand?

STO is very hot! It's hot! CoinShares chairman Danny Masters said that STO will trigger a third wave of blockchains following the Bitcoin and Ethereum networks. Bitcoin has opened a new era for value transfer and the Ethereum network has brought a second wave and the third wave will be brought by STO.

Although there is a lot of controversy about STO it does not stop STO from reaching its feet. It is understood that the current SEC has approved a total of 39 projects through STO. Rapidash based on the IPFS infrastructure has been licensed by STO the first in the world in October.

Relevant persons of Rapidash said "At present STO has been approved and issued. The SEC has no counseling and only supervision. Therefore for those projects that have passed successfully the follow-up financing is slow and regular supervision is a problem they have to face. Bank Account opening and anti-money laundering are currently two obstacles through STO. Those business models with practical application scenarios are easier to pass STO and those who want to make quick money will become more and more marginalized."

It is undeniable that the idea of ​​STO has many deviations from the original intention of the blockchain but it is in line with the current development status.

The arrival of a big wave of ICO in 2017 has brought more mainstream financial players into the cryptocurrency market. However due to regulatory loopholes and specific attributes such as cross-regional cryptocurrency industry the industry has also experienced a large number of frauds. Today more than 97.7% of ICO breaks the number of ICOs has plummeted and the number of ICOs that have been stopped is increasing.

Governments’ attitudes toward cryptocurrencies have also moved from cautious optimism to caution. The concept of STO the issuance of securities-type certificates was also born. STO is regulated by the Securities and Futures Commission because of its subordinate securities. In the vernacular STO is the cryptocurrency and ICO.

We believe that STO is an asset endorsement a regulated ICO and an IPO issued on the decentralized blockchain. STO is the mainstream of the future.

"Ethereum invented the ICO so that the silk that wants to fight the upper hand can melt the money and realize the dream of creating wealth. But this is also a dialectic and the ICO has evolved into a money-only company because of the too much toxin. The scam tool for cutting the leeks in the currency. In fact now more than two thousand ICOs on the mainstream exchanges 90% of the 100% have no trading volume and are on the verge of death. From this year's situation ICO is stinking the blockchain is going to develop people Shifted the line of sight to STO."

“Actually STO is not new. As we all know there are three categories of certificates in the blockchain. The first one is the payment certificate such as bitcoin which is regulated by anti-money laundering laws. The other is the securities category. The card is STO which is regulated by the securities law; the other is ICO which is not regulated by law and a few lines of code can send out the currency."

Therefore we believe that STO will replace ICO and will eventually replace IPO. However it is worth noting that the decentralization we are talking about is mainly the decentralization of prices on the blockchain platform. There is also a logical command and policy supervision. The two are not contradictory.

In general the core of STO is to meet regulatory requirements essentially the replication and optimization of existing applications in the blockchain. It has the following advantages better liquidity automated management at the protocol level 24-hour trading smaller trading units and overall better liquidity.

STO makes the public offering of assets cheaper and more efficient. Generally speaking the IPO process involves the process of restructuring and establishing a joint stock company due diligence and counseling financial auditing legal opinion preparation pricing and issuance.

STO eliminates the need for intermediaries which simplifies procedures saves time increases speed and reduces costs. As the number of intermediaries has decreased significantly the possibility of corruption and manipulation of financial institutions has fallen dramatically and may even be eliminated from the investment process.

Reduce financing costs. STO eliminates the need for intermediaries simplifies procedures saves time increases speed reduces costs and is superior to IPO in terms of financing efficiency financing time financing cost financing area and information symmetry. Create a business high-tech SMEs.

STO can greatly improve the liquidity of assets and solve the problem of difficult asset realization.

STO can accelerate global capital flows. Any user can invest in securities-type products that he believes to be valuable at any time and in any territory which increases the global liquidity of quality assets. In the future quality assets can be in the form of a certificate. The liquid circulates to any place that is valuable or needs it.

On the other hand due to the huge reduction in the threshold of investors more and more people can participate in the STO transaction.

This infinite cut makes the asset purchase threshold lower and lower; and the lower entry threshold for investors allows the general public to participate in the investment.

STO is more compliant and easy to regulate. The project STO usually has the following characteristics the project code is supervised to prevent the loss of investors due to serious loopholes; the project conducts compliance review to see if the industry involved in the project complies with local laws and regulations; There is a false team background; after KYC anti-money laundering investigation; the issuance of the certificate requires endorsement of physical assets company profits etc.

After the above screening the project STO can filter out some of the inferior blockchain projects reduce the risk of investors suffering losses and at the same time purify the current chaotic market environment avoid frequent occurrences of bad coins and good money and make the project more convenient. Compliance and regulation.

STO can accelerate the global flow of assets. Expand financing channels. Compared with the high threshold of IPO STO has expanded the field of securities tokenization and lowered the threshold for user access. Anyone and any asset can participate in it which greatly enhances the global circulation of quality assets.

It is worth noting that there are still many problems to be solved in STO. For example although STO is highly liquid based on the different regulatory policies of various countries cross-border transactions are currently unable to be effectively controlled which is likely to trigger financial risks. At the same time STO's related and technical challenges also face many challenges. How to implement security review and avoid hacker attacks remains to be solved.

However STO provides the direction of the development of the economic compliance of the certificate and it is expected to solve the current financing difficulties of the blockchain project. We can only make an independent judgment if we wait patiently and think calmly.