As we know, there are two most well-known crypto tokens in the crypto industry. That are utility tokens and security tokens. Most people are familiar with security tokens because they provide higher security and liquidity to the underlying asset. A security token is a digital representation of particular assets that you peg and it provides the ownership of an asset.
Generally, these security tokens can be used in crowdfunding platforms such as security token offering to raise funds. Mainly, it is performed by budding startups and entrepreneurs to develop their businesses to reach success. There are three types of security tokens, such as
- Debt token
- Equity token
- Asset token
Debt Token
Debt tokens are the most common type of security token. It represents the debt or money similar to short-term loans at an interest rate for a specific principal amount lent to the company. These types of security tokens represent real estate contracts, corporate bonds, etc.
Equity Token
An equity token is similar to traditional stocks except for how ownership is stored and transferred. This token represents the value of shares of a company through a blockchain network.
Asset-backed Token
It represents the ownership of assets such as real estate, art, gold, etc. so, it allows the user to hold ownership right over that asset in a digital form. Due to its valuable benefits and security, many crypto businesspeople showing their interest in creating their own asset-backed tokens.
Security tokens have unique functionalities when it comes to the fundraising process. To create a security token for your crowdfunding campaign, analyze the whole process of creating security tokens and their use value in depth. However, most crypto startups and business people considered that approaching the best Crypto Token Development service provider is better for developing security tokens. So you can create security tokens in a hassle-free state. Their experienced developer will create your security tokens with outstanding features.
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