Literature_Review

<p><span>Security Token Offerings (STOs) are a new and emerging form of investment proposition that focuses on the intersection of the traditional financial market and blockchain technology. They involve the tokenisation of conventional financial securities—such as shares, bonds, or ownership rights—which take the form of a digital token and are traded through specialised platforms that utilise blockchain technology. The key feature of STOs is that, unlike Initial Coin Offerings (ICOs) or other similar formats such as Initial Exchange Offerings (IEOs) and Initial DEX Offerings (IDOs), they do not represent crypto-assets without underlying value, but rather financial instruments that are legally recognised and governed by the same regulations as their “physical” equivalents (Lambert et al., 2022; Miglo, 2021).</span></p> <p><span>In practical terms, STOs incorporate features of Initial Public Offerings (IPOs), i.e., traditional public offerings, while offering a new channel of accessibility through tokenisation and blockchain technology. This means that the investor, instead of purchasing a physical share, acquires a digital token that provides corresponding rights to dividends, voting, or capital gains. This approach reduces issuance and transaction costs, enhances transparency through blockchain recording, and enables the creation of a secondary market even for small, non-listed companies (Lambert et al., 2022; Miglo, 2021).</span></p> <p><span>It is worth noting that STOs already exist in connection with major international assets. Platforms such as Synthetix already provide access to tokenised versions of shares of companies such as Tesla, Apple, and Microsoft. This indicates that STO technology is not only an innovation for startups, but may also transform the way small- and medium-scale investors approach global markets.</span></p>