This is my entry for the sponsored writing contest organized by @monajam . You can find the contest HERE
Of late, there have been frequent developments around cryptocurrencies and ICO’s which necessitates the need to create more awareness about how these ICO’s are actually structured.
In this article, you will read about:
The difference between security and utility tokens.
The challenges faced by businesses that try to raise fund through security tokens.
How Mobu will facilitate the release of security tokens on the blockchains and the solution it offers to protect investors.
Utility Token
.
Utility tokens are the kind of tokens designed to represent future access to the company’s products and services. It is not investment in the literal sense of it. These features exempt it from federal laws and other governmental concerns.
One instance where utility tokens take the stage is when a startup company wants to attract potential clients before the launching of whatever services it intends to offer. They sell digital coupons to these clients. An example is Filecoin . They raised as much as $257 million through the sale of utility token
Security Token
.
On the other hand, security tokens are those tokens, such as cryptocurrencies, that derive their values from tradable assets and such values are heavily influenced by things that are factored around external forces. So basically, security token is more of investment contract where stakeholders speculate for profit. Because of these qualities, security tokens are subject to security regulations and the respective companies are liable to being penalized if found reneging on the binding security provisions.
The Challenges Faced by Businesses that Try to Raise fund Through Security Tokens
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During the Initial Coin Offering (ICO), companies are made to conform to laws and regulations as provided by relevant security bodies and this brings lots of restrictions on who can invest and trade the tokens.
Consequently, these regulations have imposed various degrees of unfavorable limitations on companies who wish to raise fund through ICOs and, in some cases, they ended up violating some aspect of these rules, actions which are always met with the stipulated punishment and as a result, the intended projects are always hampered, if not killed.
However, with a blockchain technology, the case is different. Companies do not necessarily face these problems that are associated with governmental regulatory policies. ICOs on the decentralized blockchain technology are where the interest of companies and investors are equally secured. This technology has proffered a solution too tempting for any company willing to raise fund through ICO to ignore.
This is where Mobu comes in!
What is Mobu?
.
MOBU is a blockchain platform, developed for business owners to conveniently carry out their ICOs without unnecessary interference from security bodies. Mobu provides a structure that guarantees the safety of both companies and investors, part of which is done through verification of buying and selling of tokens by the means of escrow services. In addition, Mobu has made provisions for exceptional smart contracts through which it allows the extension of the security ICO tokens.
It also contains certain unique codes: MOBU ERC20 platform and the MOB20 standard needed to conform to the standards and requirement of Mobu.
To the users of the platform, Mobu offers lower fees, reduced complexities, and ready-made code for offering their security ICOs to the market. It equally offers the following solutions to business owners:
Easy-to-use platform
It takes away the restrictions imposed on business owners by regulatory agencies.Easy release of security tokens that are backed by real assets.
Smart contract codes that conform - MOBU ERC20 platform and the MOB20 standard.
Availability of authorization centers for KYC/AML compliance.
Availability of authorization centers for SEC approval for securities [reg CF, reg 504, reg 506(b), 506(c)].
Escrow services and easy pulling out of the contract if the ICO is not following there stipulated roadmap.
Ensures higher overall ROI for investors and creates a network that boosts confidence and trust to ensure economic efficiency and incentivizes community growth.
It is worthy to note that Mobu will distribute its own token. It is the main token that conforms to a MOBU ERC20 platform and a MOB20 standard. With Mobu Token, the Mobu marketplace will be created to ensure that trading is done under a fully regulatory compliance to the guidelines, created to provide security to both companies and investors on MOBU.
This token will be traded on approved exchanges and it can as well be used to access services.
MOBU has firmly experienced team, with Juan Engelbrecht as the CEO. They work pretty hard towards bring everything to fruition.
Conclusion
Evidently, MOBU offers the solutions companies have begging for in their ICOs because certainly, none will be willing to be held down again by arbitrary regulatory policies by any agency. One great thing about blockchain technology is its decentralized nature. Companies will now enjoy dynamic approach to business activities.
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Great piece of work, @cuddleme
But I need to ask you some question?
So far it seem that MOBU is one of very few ICOs that are completly launched as security token. I wonder why. Wouldn't it be better to come up with some utility to their tokens and launch ICO as a utility token?
And also how will they maintan the price? Does MOBU offer Masternodes or POS to attract hodlers? If I cannot use those tokens and on top of that if there is no POS/masternodes introduced into their structure ... then what would make price go up or at least stay on stable level?
Upvote on the way! :D
Yours
Piotr
I'm not actually one of the team members of MOBU. While I'm particularly passionate about the project, I have also been trying to get full understanding about some aspects of it too.
I'll give you answers based on the knowledge I already have concerning MOBU.
The security token you are talking about are tokens from ICOs who use MOBU blockchain for their launching. The security token is not the direct MOBU token.
The direct MOBU token itself is what I can call "the internal token". It is utility token not security.
MOBU will build a community where this token can be used and that is going to help improve the value. Also, I understand that they have a program that will retain people to the platform.
Hope my answers help.
Cheers!
Hi @cuddleme
Thank you for your time and effort to write back. I love to see how responsive you are.
Thanks for explaning it to me. I didnt see any securioty token yet on blockchain. i know that there are some. Would you know any by any chance?
I also noticed that you blog about crypto a lot. Cool :) We seem to share similar interests.
Cheers,
Piotr