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What Are The Different Types Of Tokenization Platforms?

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Vanessa Jane
What Are The Different Types Of Tokenization Platforms?

As tokenization is becoming a commonplace practice, different platforms are emerging to cater to the various sectors. Broadly speaking, there are three types of tokenization platforms:

  • ICO Token Platform: Initial Coin Offering or ICO is rapidly transforming the angel investment and venture capital landscape. Now aspiring businesses can tokenize their ideas and approach a larger investor crowd.
  • STO Token Platform: Security Token Offering or STO is an alternate fundraising tool that can be used by entrepreneurs to collect capital. An STO is pledged against a physical asset and can be purchased by only accredited investors. Moreover, unlike an ICO, a Security Token also offers the investor some form of equity in the business.
  • Asset Token Platform: These types of tokens are backed by physical assets such as bullion, gemstones, real estate, artwork, and the list goes on. This practice helps fragment ownership of an asset, thereby making it easier to sell.

Tokenization platforms enable the entrepreneur or business to issue tokens to investors. These platforms are protected with end-to-end encryption and are required to adhere to regulations such as KYC and AML. By integrating smart contracts, it is possible to automate the different processes and optimize operations.

Usually, these tokenization platforms are built on existing blockchains such as Ethereum, Quorum, Stellar, Hyperledger and other popular ones. However, it is still possible to develop private blockchain networks and host tokenization platforms on them.

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