Hello awesome people, how is everyone doing today, it has been an exciting new week, the weekend is fast approaching and we are looking forward to another fun and productive weekend. I’m really glad to be showcasing my knowledge for this week’s topic. This week’s topic is about Security Token, Utility Token and Equity Token.
What is a Security Token?
Security tokens are basically a token on the blockchain which represents an investment contract or a proof of a stake in an asset that is verified on the blockchain. Security tokens are very similar to stocks, bonds and can be issued by various entities, representing equity in a company and profit sharing. When we talk of security tokens, we also talk of profit because individuals who purchase security tokens expect profits from market appreciation or revenue share.
Benefits of Security Tokens
Security tokens offer a couple of benefits which are;
- Security tokens are transparent because it is on the blockchain and anyone can view information and data on the blockchain.
- Less risk of investment: This is one of the benefits of security tokens because entities that are offering security tokens must provide investors with the legally required information which greatly reduces the risk of fraudulent activities.
- Another benefit of security tokens is that there is no downtime because everything runs on the internet and on the blockchain.
- Speed of settlement is another benefit of security tokens because everything is automated on the blockchain.
- Another benefit of security token is exposure to free-market which helps increase asset valuation.
- Another benefit of security token is that there is no physical barrier which means that anyone can invest in these tokens from anywhere in the world.
Polymath is a clear example of a platform that focuses on security tokens. Polymath is a decentralized platform protocol that facilitates the creation, issuance and management of security tokens on the blockchain. With polymath, digital securities can be created and issued on the blockchain.
Features of Polymath
- ST-20 standard
- POLY token
What is a Utility Token?
A utility token is another type of token in the cryptocurrency space and they are the most popular type of cryptocurrency tokens. A utility token is basically a token that has utility within an ecosystem and gives holders of the token access to services and also can be spent within an ecosystem. Binance is a well-known ecosystem in the cryptocurrency space. Simply put, utility tokens are meant to have use case within an ecosystem. The Binance exchange needs no introduction as it is one of the biggest cryptocurrency exchanges at the moment. Binance Coin (BNB) is a good example of a utility token which is a utility token of the Binance ecosystem.
Benefits of Utility Tokens
- a utility token is a token that powers a blockchain ecosystem
- Utility tokens have uses cases and real utilities within an ecosystem
- Utility tokens are created around community and users in mind
- Utility tokens can be used to lower fees for transactions in an ecosystem
- Utility tokens can be used to pay for services in an ecosystem
Binance Coin (BNB)
Binance needs no introduction as far as cryptocurrency is concerned. BNB is occupying the number 3 position on coinmarketcap. Binance is one of the biggest ecosystems in the cryptocurrency space and their BNB token is the 3rd largest cryptocurrency by market capitalization. Over the past few years, Binance has grown to become an ecosystem in itself not just the Binance centralized exchange. The Binance ecosystem comprises of Binance Chain, Binance Smart Chain, Binance exchange (CEX), Binance DEX, and a variety of other crypto services within the Binance ecosystem.
The Binance Coin (BNB) Uses
- BNB is a utility token of the Binance and powers the Binance Ecosystem
- On the Binance Chain, Binance Coin (BNB) is used to fuel transactions
- On Binance exchange, Binance Coin (BNB) is used for paying for fees
- BNB is used for making in-store payments
- BNB is used for paying for services within the Binance ecosystem.
- BNB is used to purchase tokens other tokens on the Binance smart chain
Binance Coin (BNB) Supply Statistics
Based on the current statistics on the coinmarketcap website, BNB has a current martketcap of $88,696,706,529, Fully diluted marketcap of $98,581,834,017, a Circulating Supply of 153,432,897 BNB, Total Supply of 169,432,897 BNB and a Max supply of 170,532,785 BNB.
Since BNB operates on the Binance ecosystem, the main exchange that BNB can be traded on is the binance exchange with a lot of volume present. BNB can be traded on other exchanges such as Binance, Kucoin, FTX, Poloniex and Gate.io.
What is an Equity Token?
Equity token is the final type of token I will be writing about in this post. An equity token is basically a type of security token or a subcategory of a security token that represents the ownership of an asset on the blockchain. Equity tokens can appreciate in value based on the success of the asset. Similar to shares, however, equity tokens operate on the blockchain. Investors who purchase equity tokens gain some level of ownership in the underlying asset and also represents the percentage of ownership in the underlying asset based on the number of tokens held. Investors can gain profits depending on the success of the underlying assets.
Benefits of Equity Tokens
- Equity tokens are considered safe because of their regulations
- Equity tokens give holders control
- Equity tokens retain their value based on the underlying assets
BFToken is a clear example of an equity token. BFToken is a platform that focuses on financial innovation and investment opportunities to investors by utilizing blockchain technology.