Utility and security tokens within ICOs
Surely you have ever heard of the Initial Coin Offering (ICO for its acronym in English). Well, these activities were very fashionable in the world of cryptocurrencies thanks to Ethereum. The objective of this activity was to allow recent companies to obtain financing for their different and nascent projects.
To achieve this, the companies used the utility tokens in order to access investments and guarantee said investors access to the platform once it was built. With this, the company guaranteed access to the monetary resource and kept all the company's assets under its control. In all this activity, the only thing that supported this fact was the confidence of the investors that the developers would fulfill their promises.
Sadly, not all cases were like this and there were many cases of scams. It was clear that the figure of utility tokens did not provide the necessary security for a business that was often multimillionaire. All this led to the need to change the business model while guaranteeing transparency and decentralization at the blockchain level.
To solve this problem, the scheme changed to utility tokens, creating two new forms of financing. The first in the form of Security Tokens Offer (HUNDRED) and the Equity Tokens Offer (ETO). These two forms of financing must comply with regulatory requirements and are in effect a safer form of investment for both the company and investors. It is the appropriate and necessary answer to adapt the growing crypto economy to the needs of transparent and secure business for all.