Crypto industry is largely based on token issuance, that are not part of the company that is issuing them through ICO, so many of the tokens could be a complete scam, even if the project is not bad, or could be successful. This lead to emergence of STO, where token offerings is similar to share, as a company share. Investors that invest in STO has tokens that represent proprietary rights in an underlying company and/or its assets. This is a way that is preferred by stakeholders and investors, since Investors are provided by the right to claim assets if the project is successful.
STO is widely replacing ICO within crypto industry, and it is expected to ensure trust for Investors, since there is a lack of money currently in comparison with last year. Total number of ICO increased from 2 in 2013, when the whole story started to 552 in 2017, when the crypto reached price peak, with over a billion dollars raised in December 2017.
With a money raised, that was over 17 billion dollars in 2018, a lot of scammers and hackers sought their chance to get a slice of the cake. ICO brings with it scam risks, since 78% of ICOs were classified as scams, Investors did not get any rights in projects, they are investing money into developers, but without voting power, or shares/dividends in case of successful project. Important issue is also that project are online and globally born, so Investors did not met their developers, and developers are virtually unverified group of people, which opens position for scammers to provide a nicely looking website as their company face, but without functional solution behind it, and a lot of small investors do not have enough time and money to check all the projects that they want to be part of. Since there are risks for Investors, it would be fair to count also risks for Developers and Founders, that could be summarized with unexperienced industry that create a lot of fails with it, and a lot of raised money is hacked, since it is digital money, and people did not use to be responsible for their access codes and internet access.
On top of risks for Investors and Developers, there are risks connected to market itself, and primarily government and regulation influence shall be mentioned, since Investment in unregulated market is bringing easy money laundering with.
Eqwity is offering a solution for ICO, through platform that will support token issuance for STO, and provide all-in-one infrastructure to launch a Security Token Offering (STO). Eqwity introduce a hybrid STO plus that comprise Security and Utility token as two-in-one package. It is important to have a high percentage of successful projects for Investors, and that is why Eqwity introduced PoV mechanism to prove that project is viable, since compliant project could fail, and that is also not good for Investors. PoV mechanism shall include independent auditors, that will audit project and provide necessary information regarding project chances to be successful and viable. In the first period, audit will be done by experts hired by Eqwity, but constantly changing team, to avoid centralization, and in the phase of development, this will be organized as self-financing team of people, as detailed in the whitepaper: https://www.eqwity.co.uk/s/Eqwity_WhitePaper_V2.pdf
Project website: https://www.eqwity.co.uk/
Author: https://bitcointalk.org/index.php?action=profile;u=1573369