Security Token Offering(STO)
A regulated token sale where tokens represent ownership in real-world assets or equity.
In-Depth Explanation
STOs emerged as a compliant alternative to ICOs, explicitly registering tokens as securities. Security tokens can represent equity, real estate, or other assets, potentially enabling 24/7 trading and fractional ownership. Adoption has been slower than hoped due to regulatory complexity and limited secondary market liquidity.
Related Terms
Security Token
A blockchain token that represents ownership of a real-world asset or investment contract.
Initial Coin Offering
ICOA fundraising mechanism where projects sell tokens to early investors before or during development.
Tokenization
Converting ownership rights in real-world assets into blockchain tokens.
More in Tokenomics
View all →Emissions
New tokens distributed by a protocol as incentives, typically to liquidity providers or users.
Liquidity Mining
Earning token rewards by providing liquidity to a DeFi protocol.
Token Buyback
When a protocol uses revenue to purchase its own token from the open market, reducing circulating supply.
Dividend
Direct distribution of protocol revenue to tokenholders, typically in ETH, stablecoins, or the protocol's native token.