All About Security Tokens

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When it comes to the world of cryptocurrency, security tokens are one of the 3 main types of tokens that is popular. A security tokens is simply a token that runs on a blockchain and represents an investment contract. Simply put, a security token is a token that represents a stake in an underlying asset and is recorded on the blockchain.

Anyone who invests in security tokens doesn’t have any ownership in that underlying asset which the security token represents. However, anyone who invests in security tokens has a percentage of the profits that comes from market appreciation of that underlying assets.

The value of the security token is derived from how well the underlying asset performs. Which means that if the underlying asset is successful, the security token that represents that underlying asset will gain value. Anyone who invests in security tokens expects to reap dividends or gain profits from market appreciation of the underlying assets.

Benefits of Security Tokens?

Security tokens like every other types of tokens in cryptocurrency has its benefits. Some of the benefits of security tokes are;

Since security tokens are cryptocurrencies that run on the blockchain which means that there is no downtimes, everything is handled on the blockchain automatically.
Security tokens greatly reduces manipulation by financial institutions, because running on the blockchain reduces the need for intermediaries which can lead to manipulation.
Security tokens is less risky because of the legally required information that would be provided to investors by any entity, establishment or company that issues security tokens.
The internet is there for anyone to have access to anywhere in the world, this makes it possible for anyone to invest in security tokens from all around the world.
Transparency is another main benefits of security tokens. The blockchain is a public ledger which means that information stored on the blockchain can be viewed by anyone.
Because of the automation that happens on the blockchain, it greatly increases the speed and efficiency of settlements.
Because everything is done via the internet and on the blockchain, it means that trading security tokens can be done at any time, 24/7 trading.
Increased efficiency is another benefit of security tokens because using blockchain technology and smart contracts would greatly increase efficiency.

Source

Example – Habor

An example of a platform that is all about security tokens is Habor. Habor focuses on powering the future of security tokens. The habor platform streamlines and improves the investment experience by automating the manual process, secondary transfers and investor management. One of the main aims of habor is to create a decentralized protocol that is compliant, to streamline the issuance and trading of security tokens on the blockchain.

Features of Habor

Compliant
Security token stack
Interoperability
Partnerships
R-Token
Exchanges
Protocol
Blockchain

Habour: R-Token

The R-Token is the token of habor platform. R-Token is an ERC-20 token on the ethereum blockchain, which supports habor’s compliant protocol. R-Token ensures that security tokens can only be traded on exchanges that are licensed properly.