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Tokenisation on the blockchain is a steady trend that started in 2018 and is slowly building a following among asset owners and investors alike. It seems that anything can be tokenised via the blockchain from paintings, to football clubs, to company stocks and real estate.

Tokenisation is the method that converts rights to an asset into a digital token and the investment offering is called a Security Token Offering. As the value of a security token is derived from an external, tradable asset, a Security Token Offering is subjected to federal security regulations, providing investors strong assurances.  Security token holders are entitled to profit share, equity dividends and other rights.

By tokenising an asset and launching a Security Token Offering a company has an opportunity to raise funds legally from accredited investors, while providing further benefits which traditional investments don’t have the ability to.

Tokenising securities improves the liquidity of underlying assets which can engage more investors. Security tokens also come with other benefits like increased market efficiency, lower issuance fees and fractionalisation of larger assets. If a start-up meets the required regulatory obligations, the Security Token Offering can create a vast potential for a variety of applications.