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STO stands for security token offering. Crowdfunding in cryptocurrencies started with ICOs while STOs came as a necessity. Similar to an ICO, investors exchange funds and get a token in return. there are differences between ICOs and STOs. Unlike an ICO, a security token represents an investment contract in an underlying investment asset, such as stocks, bonds, funds, real estate investment trusts or even crypto
Any financial instrument that holds monetary value is considered a security. This means that securities are investment products that are backed by real-world assets. A security token represents ownership information of the aforementioned investment product, rather than having inherent value by itself. Investing in traditional assets can be improved by recording the investments on the blockchain rather than being written on a document.
