Since we know that future depends on Tokenization, the vast majority of the investors and ICO are looking forward to different types of Token. A token is fundamentally a smart contract based on Cryptocurrencies, for example, Etherium, and does not depend on mining, gold price and so forth., and rather, has its own various characteristics.
Following are the different types of ICO Tokens.
Types of ICO Tokens
1. The Security Token
The token you buy hoping to receive something in return is called Security Token. There are numerous ways you can invest into a Security Token; two popular ways are ICO and Crowdsale.
In addition, you can have different features in a Security Token, for example, Revenue Shares, Dividend, and Profit Sharing and so on. Being untradeable in nature is one of its drawbacks. Which is basically because of the absence of regulated exchanges; however, in the upcoming years we may get to see a few regulated exchanges that thusly would benefit the Security Token itself and as well the Blockchain industry.
2. The Currency Token
Currency Tokens are what we call real digital currencies. They are tradeable in nature however not founded on Assets and are generally alluded to Value Tokens. Like Fiat currency, the Currency Tokens could likewise be utilized for every day online purchasing, yet dissimilar to Fiat currency standards, the Currency Tokens are decentralized in nature and have a tendency to wipe out the association of any third party, for example, banks.
They are popular virtual tokens and catch the vast majority of the crypto market. The most mainstream Currency Token is Bitcoin however; there are alternatives as well, such as altcoins that exhibit distinctive characteristics from Bitcoin.
3. The Reward Token
The Reward Token is the sign of showing loyalty to the users. The industry is quickly developing at the rate of 30% annually, and it is said that around 85% of the people are a part of at least one loyalty program.
The most prominent Blockchain platform where users are rewarded includes Steemit. The platform rewards you in many ways, such as by giving Steem Power and Steem Credit.
4. The Asset Token
Also called Asset-Backed token, Asset token is considered as a substitute for physical assets having equal value. They are yet to be popular in the Blockchain space because of unregulated exchanges, however in the upcoming days, we may see some regulations in exchanges dealing with Tokens.
In addition, the Asset Tokens are generally viewed as the safest and secure investment that give extraordinary incentive to its investors.
5. Equity Token
The Equity tokens are more similar to stocks in the financial market. Nevertheless, what separates them is their concept of being accessible to each potential entity. They are effectively available to all the potential investors and startups.
If you are a startup looking to raise funds using ICO, then Equity-token is what you will probably need. You can easily distribute equity through Equity tokens without any hassle.
6. Utility Tokens
These tokens are the most secure among the various ICO tokens. The majority of the ICOs and exchanges are backing Utility Tokens because of its security. The sole purpose behind Utility Tokens is to help you get access to the company’s products and services.
The Utility Tokens are not for investment yet investors still buy them with the hope that they will increase in value.
At the last, let us know in the comment section how useful the article is, and whether we could make you completely understand each type of ICO. Also, you can tell us what topic you might want us to feature in our next blog post.