Tokenized Equities Will Ensure Long-Term Value for Investors
Startups are seeking a meeting point where business owners and token issuers can find full expression.
Traditional methods of fundraising are plagued with a challenges that makes it difficult for businesses to keep up with fierce competition within the ecosystem. This is even more true for startups. Regulatory preferences, the reluctance of banks and financial institutions to issue loans and the difficulty in convincing independent investors are some of the factors that make it difficult for businesses to find adequate funding via conventional methods
Opposite sides of the coin
These methods and the innovative ICO model represent two extremes of fundraising techniques that maintain peculiar advantages and disadvantages. Much flexibility is introduced by tokenization technology. Breaking down products into transferable units whose value is totally dependent on market forces has introduced an interesting dynamism for both token issuers and their eventual holders.
ICO methods of fundraising destroy such barriers as geographical restriction and class-based segregation. ICOs help open up the market to a diverse and global audience. However, sometimes tokens are offered almost as an afterthought without any firm connection to the underlying business.
Balancing the equation
Balancing the system implies finding a meeting point where business owners and token issuers can find full expression. Such a system will enable them to enjoy the benefits of decentralization and tokenized technology without experiencing the traditional resistances. At the same time, investors and token holders should be made to hold onto equity that goes beyond just tokens.
To this end, the Stamp platform uses Blockchain technology to provide a safe, inexpensive, and transparent path for real-world entities to issue equity. They do so in the form of tradable tokens that represent an ownership share of their company. This singular move satisfies the discontent within the industry and offers companies and investors the opportunity for a stabilized and transparent market. Issuers can enjoy the benefits of tokenized technology, while investors can retain tangible equity within the companies running such investments.
The Stamps platform uses an augmented version of the emerging technology of Blockchain. Built on the Soferox dual chain infrastructure, Stamps will streamline the process of issuing equity ownership. Unlike traditional funding methods, when a business issues equity tokens on the Stamps platform, it will instantly have a large following of backers who own a share of the company and prevent the offering from being considered a security.
Soferox is a pioneering (Proof of Pact) architecture that uses two distinct Blockchains to carry two different sets of data. One Blockchain contains transactional data and is immutable. The second Blockchain contains the rules that regulate additions to the transaction chain.
The Stamp platform also allows the issuing organization to create benefits and structural advantages that include:
Dividends - A share of company profits, paid out in regular intervals to equity token holders via Bitcoin.
Voting rights – Equity token holders can take part in certain high-level decisions of strategic value to the company, such as the election of board members or the issuance of new tokens.
Stake increases - Increases in the equity value of the equity tokens. An organization might decide to increase the amount of equity attributed to some equity token holders. This is particularly useful if the valuation of the company has changed, or if an organization wishes to issue new equity tokens without diluting existing STAMP holders.
Merger or Acquisition - In the event a stamp-issuing organization is acquired, equity token holders will be compensated via Bitcoin according to their stake in the organization.
Blockchain technology is still in its early stages of development and several twists and glitches will still be expected. So far, both the conventional methods and the ICO processes have fallen short of effectively delivering total benefits to all parties involved. Therefore, finding a balanced system that satisfies the objectives of both the token issuers and investors is a step toward the stability and value delivery of the Blockchain technology.
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