Are Security Token Offerings Living Up to The Hype? Are STOs Still Primed to be the Next Wave?

Everyone expected to see security token offerings experience substantial popularity, especially with the requirement to be accredited to even qualify as an STO. They entered the market like a dream and a solution, but they have yet to see any success that would live up to those claims. What could STOs fate be?

  • Creators behind security token offerings hoped to be a solution to the needs that were not being met from ICOs.
  • Despite making many promises, STOs have not been very successful.

Security token offerings entered the cryptocurrency market with many promises, giving greater security than what the formerly popular initial coin offerings (ICOs) did. They aimed to be the segue for the traditional financial market to enter the cryptocurrency industry, which already a lofty goal. Ultimately providing increased cost efficiency and offering more access and liquidity, the attention was rather reasonable.

Unfortunately, STOs have not quite gotten the story that they would prefer, based on blockchain-based fundraising.

When the concept of ICO essentially drowned in the beginning of 2018, investors started to see how poor of a fundraising tool the ICO actually was. Funding could be lost by the platform, and investors would be left with no legal recourse. Even during the first quarter of 2018, there were over 1,500 ICOs, but this number has dropped down to 403 during the first quarter of 2019.

Even with the advantages that STOs offer, they have not really seen any additional success during this time. While this year’s first quarter showed 57 token offerings, last year only showed 49 offerings. Even though this would appear to be an improvement in any other situation, but the growth hardly lives up to the promises and progress that was expected for STOs and even IEOs.

Some of the challenges that STOs have seen is in compliance with the current framework. Every country has different regulations and meeting this type of requirement everywhere can be complicated.

Furthermore, the simple launch of an STO can be incredibly expensive, since it requires multiple stakeholders to be involved before it can even get off the ground. While the ICOs have succeeded with the simplicity of entering the market, STOs have come with roadblocks, as these launches have to be accredited first.

Overall, STOs came in with a lot of promises and dreams, but very little of these aspirations turned into anything else. As blockchain projects have seen a lot of the same results, it appears that STOs are seeing a similar struggle to gain the desired momentum.

Get Free Email Updates!

*Action* Enter Best Email to Get Trending Crypto News & Bitcoin Market Updates

I will never give away, trade or sell your email address. You can unsubscribe at any time.

Krystle M
Krystle is an American cryptocurrency blogger that wants to see the future of crypto and blockchain technology evolve. She has been writing about cryptocurrency for about a year, with a special interest in blockchain technology and regulatory measures around the world. While away from writing and learning about the changes in the cryptocurrency industry, she likes to indulge in science fiction novels and further her experience in playing both guitar and piano.

[Alert] Use the author's self-conducted information at your own risk, do you own research, never invest more than you are willing to lose.

[Disclosure] The published news and content on BitcoinExchangeGuide should never be used or taken as financial investment advice. Understand trading cryptocurrencies is a very high-risk activity which can result in significant losses. Editorial Policy \\ Investment Disclaimer


Please enter your comment!
Please enter your name here


Live Bitcoin Price & Latest BTC Charts

Today's Latest Crypto News

Bitfinex Offers $400M Reward For Info on 120k BTC Stolen in 2016; Hackers Can Collect Too

On August 2, 2016, Bitfinex experienced one of the biggest crypto heists of all time, as hackers exploited the system, running off with approximately...

Crypto Trading Platform, 2gether, Unable To Refund $1.4M Hack; Offers Its Native Tokens

Spanish cryptocurrency trading app, 2gether announced on Sunday the platform faced a hack on July 31 on its investment coffers losing €1.183 million ($1.4...

Venture Fund to Invest Majority of $100 Million Raised Fund in DeFi Protocols

San Francisco-based venture fund Electric Capital has raised $100 million from university endowments and other non-profits and it will be using this to invest...

Filecoin to Begins its Incentivized Testnet This Week Ahead of Project Launch Next Month

Crypto project Filecoin which proposes to create a peer-to-peer storage system, will begin its incentivized testnet this week. This testnet will allow users to...

Ethereum 2.0 Final Testnet, Medalla, Rolls Out; Is A 2020 Launch Now In Sight?

The Ethereum 2.0 Phase 0 Medalla public testnet finally went live on August 4, 2020 at around 1AM GMT giving hope of a possible...

BitcoinExchangeGuide is a hyper-active daily crypto news portal with care in cultivating the cryptocurrency culture with community contributors who help rewrite the bold future of blockchain finance. Subscribe on Google News, see the mission, authors, editorial links policy, investment disclaimer, privacy policy. Got News? Contact us, we are human too. Note: nothing here is financial advice, do your own research thoroughly.

Start Using Crypto Today