When we talk about tokens, I will be discussing about the three types of token as

Security tokens are issued on a block chain as a state in certain external business or asset. The security token can be issued by bodies like the government, businesses and they serve the same function as their incumbent counterparts. They are basically digital, liquid contracts for sections of any asset that by this time has value just like a corporate stock, a car or a real estate.

The security token is a natural bridge that connects the block chain and the traditional finance sector which profits both parties equally. Their value is gotten from external assets that can be traded. The token is issued on either a non permissioned block chain or a permissioned block chain.

The security tokens are tools that are used to raise funds that generate the security token. Once ownership is verified the security token holders will now have access to use tokens as insurance loans, trade their tokens for other assets and to also store token in different wallets. The true value of security token is dependent on how they can redefine what ownership means.

The holders of these tokens do not have any ownership privilege to the entity that they are investing in. They can equalize assets and share them among people everywhere in the world.

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Security tokens do not need to suffer from interference from the government in the future as they are already compliant, also with the security token you are sure that your investment is in the right hands because they go through so many regulations.

Security token cannot be transferred without fulfilling certain regulations which includes the kYc requirements and also the AML requirements. This causes the security tokens to become less liquidable than their counterpart at the utility token that can actually be traded secretly.
The security token has four layers which are the block chain protocols, the smart contracts, the insurance platform and also the exchanges.

The security token has certain benefits to be enjoyed by the users such as segmented ownership and reduced cost against IPOs.

Below is an example of a security token.

SIA FUND TOKEN

The sia fund token is actually a token that is used on the sia network, all holders of funds at Sia gets a share of the 3.9% fee that is realized fron every storage associated transaction on sia. The core team of sia currently holds up to 85% of all of sia funds. The sia funds were selected as securities by SEC IN 2018.

WHAT ARE UTILITY TOKENS

The utility token helps in capitalizing and providing funds for projects for startups, project development groups or firms. This is a digital cryptocurrency token that is issued to finance the development of cryptocurrency and can in the long run be used to buy an asset offered by the issuer of the cryptocurrency.

The utility token as its name implies serves a specific utility, it could be that tokens could be used on platforms to redeem an exceptional service or obtain special treatment to services. Often times, it is used by firms to increase interest in their products and also for value creation in services made available in block chain ecosystems.

Utility tokens makes it possible for you to have future access to a company’s product or service, but this utility tokens can not be considered as investments as there are no regulatory framework for them in many countries.

Below is an example of the utility token;

BAT:

BAT is an acronym for Basic attention token; the ERC-20 is a token that gives room for accessing various basic attention token services. This basic attention token is mostly used to pay publishers and content creators. The firm backing the basic attention token launched it so as to be able to develop a block chain platform that will be able to assist content authors of diverse kinds to find money in a more equitable manner. However, the users of these tokens could at certain times be rewarded with a decrease in invasive adverts on the pages that contains this content.

WHAT ARE EQUITY TOKEN

These tokens works more like the traditional stock asset. That is to say that the holders of equity token have some form of ownership in their investments.

The amount of ownership percentage they have is dependent on their tokens, in most cases the equity tokens are a representation of a third party asset, a venture or a property.

These tokens can take many forms which includes the tokenized ventures, the options contract, the futures, the stocks etc. these are stocks that can be offered by any startup where the investors are given a part of the ownership of the block chain.

These token provides the investors with a form of security as they have involvement in the development of the block chain network and the investors are given rewards based on the performance in the market as well as the fact that these tokens are exchangeable.

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The only difference between the equity token and that of the traditional share is their mode of documenting or recording ownership, actually a traditional share once logged into a database can followed by a paper certificate.

Below is an example of the equity token

NEUFUND

Neufund is a blockchain centered equity fundraising platform, it is an ecosystem of smart contracts that are being operated on the Ethereum block chain. The firm focuses more on legal tech and the reg tech. it is a blockchain procedure for securities tokenization and also for tokens to be issued. Their aim is to present the means and instrument to finance projects directly to entrepreneurs who share in their vision.

As a platform that is created for raising funds, it is owned by the community at largr, it serves as a bridge that connects the traditional investment world with the unconventional block chain sphere. Neufund was founded in 2016.