STO (Security Token Offering)

The process of creating a new token on the blockchain, especially NFTs or ERC tokens.

What is it? - Dummies

An STO is like an IPO, but in a blockchain version. Instead of handing out paper shares, the company issues digital tokens that represent a real stake: a share, a slice of debt or an economic right. Because these are genuine investments, they play by the serious rules of the stock market, not by the loose rules of unregulated crypto.

What is it? - PRO

An STO (Security Token Offering) is the issuance and offer of tokens that constitute financial instruments (typically transferable securities) represented through distributed ledger technology.

Because these are financial instruments, an STO is subject to securities markets law: MiFID II Directive 2014/65/EU, MiFIR Regulation (EU) 600/2014 and, in Spain, Ley 6/2023 (BOE-A-2023-7053). It is not governed by MiCA Regulation (EU) 2023/1114, which excludes financial instruments under Article 2(4).

Key points

Issuance of tokens that are financial instruments (transferable securities).
Governed by MiFID II, MiFIR and the LMVSI, not by MiCA.
Usually requires a prospectus or securities information document.
Differs from an ICO, which offers non-financial crypto-assets.

Advantages

Disadvantages

Related Concepts

NFT (Non-Fungible Token)

A unique digital token that represents ownership of a specific asset, such as digital art, music, or collectibles.

Smart contract

Self-executing blockchain programs that automate agreements and processes without intermediaries.

NFT metadata

Additional information that describes the characteristics of an NFT, such as a name, image, description, or unique attributes.

Token

Digital representation of an asset, value or utility within a blockchain.

ERC-721

Standard for non-fungible tokens (NFTs) on Ethereum, used for unique assets such as art, collectibles or digital property.

ERC-1155

Hybrid standard that allows both fungible and non-fungible tokens to be created in the same contract.

Related Services

Create NFT collections

Development of smart contracts

Token development

Issuance of tokens

White label tokenization platform

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