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What is Consumer Token Offering (CTO)?
In this developing world, crypto space is emerging rapidly in the evolution of blockchain technology.
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In this developing world, crypto space is emerging rapidly in the evolution of blockchain technology. This technology is coming up with many more new concept that is striking the world in daily routine. In that to consider about the token sales and the diverse models, it acts as a part of selling new coins that is in market with its own raised volume.
To state, the very first of this token sales begins with Initial Coin Offerings (ICOs). That found a major hit back in 2017. Due to its flaws in the ICO model it was found to be extremely unregulated and has many risky facts. After then, it became replaced in 2018 by Security Token Offerings (STO), that is constraint with many laws and regulations. Additionally, this model brings tokenization of real assets that ensures the investors to hold new coins with the coin having its own value.
As a fact, the blockchain is capturing a lot of traction over wide range of industries in the cryptocurrency market that introduces new funding mechanisms mainly for the investors is CTO.
What is CTO?
Consumer Token Offering (CTO) is the trending recent concept in the cryptocurrency market. Now, many investors and business traders are not aware of this concept yet. Though it is not so familiar about the concept of consumer token towards all the enterprise traders, it has its own predictions that this business model will definitely go viral in 2019.
Consumer Token Offering is one of the fund raising mechanisms that is similar to ICOs and STOs. It has its uniqueness and individuality when compared to other models in such a way that consumer tokens have its feature availability to sell only to consumers who ready to buy a product or service utilizing that token. In general, consumer tokens are not considered with high securities and also not only designed for trading purpose.
Why CTO?
STOs found to be an improvement due to the scam made in ICO and its several projects that have not much future scope. As STOs are more secured and regulatory-friendly, it complies a specific regulations in order to launch a security token.
STOs permit security tokens in which it will be sold only to accredited investors. Due to this, it is found as a challenging one to trade or sell the particular products that too preferably to the consumers. To mention, it is not seem that STOs remains not much good to sell over many and it is not restricted to limited groups. Say for an example, it is like a large enterprise or institutions ready to invest in crypto tokens. Thus, Consumer Token Offerings (CTOs) came as an enhanced fund raising model included with the consumptive consumer tokens.
Is CTO, a utility token?
As of now, some may treat consumer tokens as utility tokens but it is absolutely not a right one to agree. It is necessary to understand that utility tokens will be varying at anytime and can sell and buy on the exchange platform. Thus, while considering the consumer tokens, then it is completely designed for consuming services and goods.
Regulator’s Reaction to Approve CTO
Some of the following reasons mentioned that why SEC needs to get approved Consumer Token Offering:
- This tokens are preferably designed to be utilized or consumed.
- Consumer tokens are designed utilizing the consumer token framework developed by ConsenSys, The Brooklyn Project.
- Tokens not found with high securities and thus there is no necessity to get register with the SEC.
- It helps token holders to claim service or product with consumer tokens.
- Consumer tokens will not be sold again once it is sold as speculative financial elements.
Once SEC gets approved the CTOs, then investors will arise with the question and also eager to know about the creation or launch of a Consumer Token Offering.
Consumer Tokens Creation
At present, to launch or create a consumer token, one should follow the below guidelines that is mentioned by the consumer token framework.
The consumer token framework focuses on the below listed concepts:
- Design of Consumer Token
- Project governance and operation
- Accountable token distribution
- Defining the intention of token distribution
- Supply of tokens
- Explaining the token Safety and Security
- Exact goal on marketing practices
- Defining how the token empowering the consumer
- Compliance with the applicable law
Why Securitytokenizer?
Consumer Token Offering is still in its budding stage and many of them are keen in understanding the concept whether it is a better alternative to STO or not. At Securitytokenizer, we comprises a team with adroit blockchain experts analyzing with in-depth research on Consumer Token Offerings and in what way it will benefit consumers as well as business owners.
Securitytokenizer is the top rated cryptocurrency development and token offering company. We furnish abrupt consumer token offering development services and solutions according to your business needs. We ensure that our complete CTO development services will get an exact relevancy to your business demands and provide you with much satisfied as well as maximum output considering your business enhancement.
Interested to launch CTO for your business? Get a free consultation here!