Initial Coin Offering VS Security Token Offering

ICO were the first crowdfunding option to surface in the blockchain ecosystem. It allowed anyone, from anywhere, to finance the development of a company or project. ICOs is the cryptocurrency industry’s equivalent to an Initial Public Offering (IPO). In exchange for their investment, the investor will receive a number of utility tokens, or, user tokens in other words. These tokens represent future access to a company’s product or service.

STO is similar to ICO but STOs are asset-backed and comply with regulatory governance. STO solved the problem of ICO which is lack of oversight. STO offers more guarantees in the space of raising funds using tokens issued on a blockchain.