ICO/IDO/STO

In the traditional business model, the most common way to increase capital in a company is to issue shares or additional shares.

An alternative solution based on the Bockchain network is the issue of tokens. These solutions not only allow you to achieve a similar effect much cheaper, but also allow you to freely define the rights resulting from the possession of tokens. Contrary to shares or stocks, which by definition determine what its owner can do and what he has an influence on - in the case of tokens, the logic determining their capabilities is contained in smart contracts. In the simplest case (when we do not de facto impel any special logic), such tokens reflect the company's value, but do not allow us to influence the decisions of the organization (which we are entitled to, e.g. shares).

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How do individual solutions differ from each other? ICO, IDO and IEO are generally very similar. All of them rely on the issuance of tokens, usually based on the ERC-20 standard, but they differ in the manner of their distribution. In their case, the motivator to buy is trust in the project or people behind it, or faith in the venture described in the white paper.

In the case of STO (security token offering), the situation is completely different. The issue of this type of tokens is much more expensive due to the greater complexity of the entire system and the need to prepare legal documentation, however, the way this type of token works is much closer to the issue of the company's shares and the tokens themselves must be covered in real value.

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