In the crypto space, there is one question almost everyone has googled at the time. It’s the important question that makes crypto lovers sit up all night, scrolling down various medium finding for an answer. The question that has started a lot of online mediums and cryptocurrency talk communities, and yet, has handled to stay open.
"That question is, what is the Consumer Token Offering?"
Fortunately, we’ve learned & updated a thing on the subject. In fact, we do know actually a lot, discussing our cryptocurrency development team of experts has built and continued improving one of the best crypto tokens on the modern crypto market for businesses and start-ups. As it happens, when you’re working on a crypto token based project, you must watch what your business competitors are up to. We have to accept, some of the top crypto tokens have done a good job with their products, and it’s right time their work be praised!
But before we gonna talk about here ICO, STO & CTO, we want to let you know that this blog is based on our research, experience, and has a lot of opinions.
ICO vs STO
After many infamous events related to countless ICOs, their popularity has clearly been dented. Investors became more aware and learned how to make weighted decisions. The world started accepting new regulation procedures country by country.
The 2018 crypto market crash also played its role and those investors who were unfortunate enough to lose all of their investment were not so keen to keep on losing it. It seems that today, the ICO madness has gone quiet, and STOs have smoothly started taking over.
According to ICObench statistics, there was an overall drop-off of the ICO market in February. With $178 million raised and 78 completed ICOs, the count of numbers is almost twice less than in the first month of the year.
It’s interesting that 38% of the funds raised in February went to a single project, launched by the United Arab Emirates.
Another February trend includes a success rate that has fallen below the general average. ICObench listing is systematically decreasing.
Currently, Europe, Japan, and the US have already started working on offering a healthy, lawful environment for conducting token sales. Surprisingly, France is aiming to become the new home for crypto startups.
To part themselves from ICOs latter days reputation, new projects come up with alternative approaches to blockchain crowdfunding.
STOs are currently among the positive trends and, in common, the number of STO projects has increased. In February there were 170 STOs running and 120 of them were completed and raised more than $500 million.
Although ICObench listing has a general descending trend since summer 2018, STOs are clearly earning the trust of both projects and the community.
A Security Token Offering is very interesting for the reasons mentioned above, but has also some important drawbacks:
One of the biggest drawbacks to security tokens is the inefficiency of non-accredited investors to own them. In the US, this means that more STOs will need you to be an accredited investor as part of their SEC compliance. Unfortunately, you require to earn at least $200,000 per year, or, have at least 1 million dollars in the bank, if you want to be an accredited investor.
Unlike ICOs, STOs require to include a host of other organizations in their crowdfunding campaign. Underwriting companies are a perfect example of an added cost that STO member must foot the bill for. Regulation isn’t cheap and it’s more expensive to host an STO when compared to an ICO.
Another drawback detected by security token investors is secondary trading market restrictions. Security tokens can only be transferred via licensed platforms. The platforms must possess a security trading’s license in the country they operate in. Also, security tokens feature a time-lock mechanism. You can only trade these tokens between qualified investors for a fixed amount of time after the STO.
ICOs, STOs, What’s Next?
Heard about CTO yet? Possibly, this is the next big thing! Yes,
The topic of consumer token offering definitely grips the attention of the audience. First, we told you about the rise and fall of the ICO & STO era. Then the CTO model started to take over. And now there’s a brand-new player in the game that many start-ups are willing to consider.
So, without further confusion, may we present you the CTO – Consumer Token offering – a new and improved type of ICO & STO.
So what in the world is a Consumer Token Offering—and, way more basically, how will it pass muster with the U.S. Securities and Exchange Commission?
Consumer Token Offering
Consumer token is nothing but it’s one type of crypto token just like utility token that is designed and marketed and sold using the “consumer token framework” created by the ConsenSys-backed, crypto legal consortium The Brooklyn Project.
“The bottom line is that these are digital assets that are constitutionally consumptive in nature— meaning, they’re designed fundamentally to be used or consumed,” says Brooklyn Project co-chair and ConsenSys Deputy General Counsel Patrick Berarducci.
“Joseph Lubin, the founder of ConsenSys, said - the company will be planning to launches 4 to 5 consumer tokens in the year of 2019.”
Will consumer tokens create the next big Hype in Crypto? If so — what does that mean for Utility Tokens? Will they ride out?
In order to find answers to these questions, the following section will help you to understand the differences between Consumer & Utility Tokens and provide you with knowledge about the advantages and shortcomings both token types represent.
Utility tokens are comparable with the token. Holding one entitles the owner to access a company’s product or service. Utility Tokens are not likely to be investments and are therefore probably exempted from federal laws governing securities.
Consumer tokens are similar to the “utility tokens” of the past. Fundamentally, they are the same—tokens meant to be used, not traded and resold as speculative, financial tools. They vary, however, in their extrinsic properties. Consumer tokens aren’t just a clever re-branding of the utility coins in-name-only sold by ICOs looking to pull a fast one on federal regulators; these are tokens specifically designed to not rise in value and are highly restrictive in the way they are distributed and later resold.
As such, the sale of these tokens is absolutely open to the public. There’s no need to register these sales with the U.S. Securities and Exchange Commission, file a registration privilege, or restrict them to “accredited investors,” according to ConsenSys General Counsel Matt Corva.
What is Consumer Token Framework?
The framework consists of principles and practices covering important aspects of consumer token projects and outlines a set of “ transparency goals” on which projects and communities should focus their attention.
Explore more here - Consumer Token Framework
How To Create A Consumer Token Offering (CTO)?
If you are thinking about how to structure a token sale or distribution, The Brooklyn Project community has tapped into the expertise of its community and the industry to create an extensive consumer token framework, highlights of which are below.
What To Expect:
Some say it’s just another bubble and that only the two crypto startup has sold their tokenized wares using the CTO framework—blockchain-based journalism network Civil, and proof-of-location, GPS alternative FOAM.
Reasonably, it is still too early to say if this alternative model will go better than an ICO & STO. It goes beyond the smart contract system and adds a new layer of trust.
Now that you have a better understanding of the consumer token offering (CTO), you can make an informed decision on which is the right one for your business or start-up.
Consumer tokens are the chain that links current markets to the crypto space. You should expect to see high growth in this sector over the upcoming months as the advantages of blockchain technology continue to become better understood globally.
Developcoins is the leading cryptocurrency development company in India. We provide complete consumer token offering development services and solutions based on your business requirements. We assure that our CTO development services stay relevant to your business and give maximum output to your users. For making this happen, we utilize avant-garde technology and consumer token framework strategies in making the consumer tokens, their smart contracts and wallets. We assure that you get an end-to-end CTO development services with which you can reach your audience anywhere in the world. We create Consumer Token Offering a game-changing project for your business with the latest technology, effective strategy, and flawless execution. We help you create a network through our marketing team which makes sure that your project is heard, read and seen by every user in the world. Our services assure that you get nothing but the best when it comes to launching a CTO.
Still Got Questions?