Opening doors for a better tomorrow

Security tokens opposed to traditional stock open up a range of possibilities for improvements of security transactions.

Firstly, the transparent characteristic of keeping a ledger on a blockchain enforces trust among users. Besides transparency among investors, the blockchain also creates a transparent relation between investors and issuers. Fraudulent activities have not been uncommon. For instance, the case of Dole food having too many outstanding shares is a frequently used example in the blockchain space in favor of security tokens. Another example is the gold market which is often accused of having more outstanding shares than physical gold. A security token offering does not allow room for these accusations.

Secondly, security tokens are more easily tradable than traditional equity. Investors have more access to liquidity, as most tokens do not incorporate lockup periods and the market is open 24/7. Furthermore, entry barriers are lower in terms of capital as generally there are no minimum investments and fragmental trading is allowed, opening up possibilities for even the smallest traders.

Lastly, the use of security tokens increases the level of automation. Automatic Teller Machines were an enormous improvement for banks in terms of running costs in the late seventies, logically charged to customers. Likewise, security tokens also remove standard tasks and thus lower running costs and costs of dividend payouts. Again, this improvement has relatively more impact on the smaller investors.