A security token represents an investment contract into an underlying asset; a real-world asset such as a company or property. So while a security token is recorded on the blockchain, like crypto coins and ICO’s, it also resembles a traditional initial public offering (IPO). It’s like a hybrid solution melting the best of both worlds thereby creating novel opportunities.

• STO’s are asset-backed and offer an investment contract under securities law, unlike ICO’s.
• STO’s are regulated offerings like IPOs but because of tokenisation, speed and cost-effectiveness its applications are not limited to large companies.

The democratization of ownership

A Security Token Offering is about sharing ownership and the benefits of ownership. It facilitates the participation of stakeholders, big and small, and does so fast, cost-efficiënt and secure. Key is the STAK (Dutch voting trust foundation), which is a very specific system, unique to the Netherlands, set up to administrate and issue certificates to share holders.

By selling the Security Tokens one can raise capital in the market from private investors in a security token offering (STO). The organization will raise the desired liquidity and will only have to pay out dividends when the investments are paying off. Just as in the regular stock market a company is obliged to report properly and timely on its progress and results. Via an STO up to EUR 5 million can be raised under Dutch law every 12 months.