Types of ICO Tokens

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Do you know the types of ICO tokens? ICOs are the stocks of the 21st century. Born in the context of the new digital economy and driven by the wave of startups, the “IPOs 2.0” have caused a lot of movement of traders and investors enthusiastic about innovation and technology engaged in the dynamics of the digital age.

And, like all technology, ICO tokens are very flexible and can adapt to the needs of scalable new companies looking to grow in such a volatile, uncertain, complex and ambiguous market.

Utility Tokens

Are the most popular type of ICO token as they can be used to run various functionalities within their issuing platform and are the best alternative for capitalizing startups.

Basically, they aim to make a network work. To this end, they offer the buyer the right to use services, products or platforms and are equivalent to an advance purchase at a discount from what the issuing company will offer.

Because they are tokens of predetermined quantity, the generation of profit uses the principle of scarcity, causing the prices of the tokens to rise and, consequently, to be more profitable for the issuing company.

Security Tokens

These are tokens that allow investors to return their invested capital through earnings. ICOs offered in this form of token have securities characteristics and are widely used for trading purposes.

That is, they are tokens acquired with the aim of subsequently making a profit. The advantage of this type of token is the ease of trading for investors.

The downside however, is these tokens need to be evaluated and approved by regulatory bodies and do not grant the investor the right to participate in the company’s decisions.

Equity Tokens

Called ICO 2.0, they are tokens that work like shares in a company, giving the investor profits and the right to vote in the company’s decision-making.

The difference between this type of token and a traditional stock is the fact that the token involves less bureaucracy as it is recorded directly on the blockchain.

They generally work on the principle of equity in voting and receiving profits, that is, if a company issues 1000 tokens, each of them represents 1% of the right to gain profits and 1 vote in 1000 in decisions about the future of the company. company.

Credit Tokens

These are very simple tokens and good ways to capitalize startups. They work like a loan, the investor puts X capital in the startup and aims to obtain X +10%, for example.

Combo Tokens

Some ICOs can combine the function of several types of ICO tokens, such as a token that acts as both a utility and a security token.

Payment Tokens

These are tokens used for the transfer of capital being adopted for payment of products, services, international remittances, etc. Therefore, they are means of payment such as Bitcoin (BTC), Ripple (XRP), etc.

As you can see, tokens are very flexible and can be adopted in the most diverse ways to fulfill the purpose of a company, whether initial capitalization, platform maintenance, trading activities or payments for products and services, tokens are practical forms, profitable and non-bureaucratic for companies to achieve their goals and help to further foster the crypto market and move the new digital economy.

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