On STOcheck.com, we are presenting Security Token Offerings (STOs) in one simple overview. STOcheck is a platform that allows investors to compare different types of STO-investments and to better understand them.

Security Tokens are fungible, negotiable financial instruments that hold some type of monetary value and are stored on a blockchain. Security Tokens can represent underlying investment types such as company equity, bonds, funds, participation rights among others.

A Security Token Offering (STO) is a type of regulated fundraising where an investor can purchase a Security Token offered by an issuer. If purchased, the buyer becomes entitled to certain legal and economic rights such as equity ownership, payment of dividends, interest, revenue or profit share etc.

A Security Token representing company equity gives the investor a degree of ownership in a specific company. The investor becomes a shareholder endowed with certain rights (such as dividends, voting etc.) depending on the investment terms.

A Security Token representing a bond entitles the investor to receive interest payments from a loan made by the investor to the borrower (issuer). The borrower (issuer) defines the terms of the loan including interest payments and the time at which the borrowed money (bond principal) must be paid back (maturity date).

A Security Token representing real estate gives the investor certain rights connected to the underlying property. These rights are dependent on the financial instrument that is used such as equity, debt, participation certificate or a hybrid form.

A Security Token representing a participation certificate entitles the investor to receive a fixed percentage of the company's profit and/or revenue that is generated. A PC can be viewed a “hybrid” between a bond and equity. It differs from equity in that it does not grant ownership and/or voting rights. It differs from a bond in that investors usually don't get their principal amount repaid on a fixed maturity date.

A Security Token representing an equity fund gives the investor a degree of ownership in a fund that usually consists of a diversified portfolio of company stocks. Equity funds are managed by experienced professional portfolio managers whose past performance is a matter of public record. The price of the equity fund is based on the fund's net asset value (NAV) less its liabilities.