Talking about the future opportunities of STO: Selling shovels in the Web3 gold rush?

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2023-04-28 13:43 (UTC+8)

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So what are STOs? Can it represent the "future of tokenization"? Where are the opportunities for the future?

original:"The STO Opportunity of the "Tokenized Future" Is Selling Shovels in a Gold Rush》

Original source: Chain Tea House

At the closing ceremony of the Hong Kong Web3 Carnival, Xiao Feng, chairman of Wanxiang Blockchain and chairman of HashKey Group, delivered the finale speech "Three Token Models for Web3 Applications", concluding that "Web3 entrepreneurial projects should choose STO".

The background of this conclusion is that HashKey has obtained the only trading license in Hong Kong, and Web3 companies can conduct STO here.

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1. What is STO?

STO (Security Token Offering), that is, the issuance of security tokens, is simply to tokenize securities.

lCO also tokenizes securities, but there is no threshold for launching lCO, which is almost equivalent to "initial air currency issuance". Therefore, after being popular for a while in 2017, it became famous in 2018. So some Web3 companies (also known as blockchain companies at that time) began to explore new ways of issuing coins.

For example, lEO, which changed the soup without changing the medicine, added a review to the currency issuance-letting the exchange guarantee its own reputation. This black humor decided that it would be equivalent to the "initial air currency issuance".

At the same time, the concept of STO has also been proposed, which is to issue coins in an encryption-friendly country like Malta, but it is only legal in Malta.

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2. What is the difference between STO in Hong Kong and STO in Malta?

Malta's STO and Hong Kong's STO are both "compliant lCOs", but Malta is fundamentally different from Hong Kong - Hong Kong is a world-class financial city, an Asian financial center, and the freest economy in the world...

In other words, if you issue coins in Hong Kong in compliance, you can sell to the global market in compliance (although judging from the activity of Hong Kong stocks, it is no longer worthy of becoming an Asian financial center...).

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3. Will STO in Hong Kong usher in explosive expansion?

Hong Kong's support for STO is a cooperation between the Hong Kong government and the mainland's encryption capital - the Hong Kong government needs the influx of new capital to make up for the capital lost in the past few years, and the mainland's encryption capital needs compliance and endorsement, and STO is the greatest common divisor for the cooperation between the two parties .

Expectations are full, can we usher in explosive growth in the future? It all depends on the barriers to entry.

If the threshold for listing and investment is relatively low, then the attractiveness can even exceed that of lCO. If you know the local financial asset trading platforms supported only by mainland retail investors many years ago, then you can imagine that Hong Kong, whose market capacity is much larger than that of prefecture-level cities in the mainland.

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4. So what should we expect from STOs?

Due to Hong Kong’s predictable regulatory policies, there is no need to have expectations for Security Tokens, because Web3 companies that are qualified to issue Security Tokens can go public directly, and the market capacity is larger.

NFT can directly benchmark the data asset market, so it can be judged that it has a market, but it is not large.

Functional Token (Utility Token) is worth looking forward to. It is positioned as an ecological credit and is a free gift rather than a financing tool. HashKey will make a sample first - issue the platform currency HSK.

However, what is most worth looking forward to is not the above three tokens, but STO service providers...

STO needs to specifically design token economics, legal structure, and token casting, etc., before it can be listed and traded on a regulated trading platform, which requires professional STO service providers and related supporting services.

It's like selling shovels in a gold rush. Regardless of whether the gold rush is successful or not, selling shovels is always a safe and really profitable business.

Regardless of whether STO can complete its narrative—following the Wall Street model and the Silicon Valley model to create a shared capital model belonging to Web3, at least there will be a wave of funds willing to recharge policy dividends.