Types of Security Tokens

📊 The security token world is growing exponentially — 2021 may become the year of the security tokens rise

⚡️ The global listed trading volume of security tokens is expected to grow to $162.7tn by 2030, with a total security token issuance worth more than $4tn in the same period.

Stobox highlights such types of Security tokens:

📣 Equity — tokens that represent common shares in companies, thus making tokenholders co-owners of the company;

📣 Preferred Equity — a type of tokens similar to common stock but different in the form of repayment: while common stockholders need to rely on corporate profits, preferred shareholders get guaranteed payments;

📣 Convertible Preferred Equity — a type of hybrid security that functions as preferred equity until it is converted into common stock under certain conditions;

📣 Bonds (debentures) — a security that offers investors the right to guaranteed periodic interest payment and repayment of the body of the investment at a certain date.

📣 Callable Bonds — give the issuer the chance to redeem bond issues early. In return, the buyer gets a bond with a higher coupon rate and likely a higher price upon redemption;

📣 Convertible Bonds — a bond, that is converted into equity under certain conditions;

📣 Fund Units — securities that represent the participation of investors in a collective investment scheme;

📣 Derivative — a financial contract between two or more parties that derives its value from an underlying asset ie., stocks, commodities, or cryptocurrencies;

📣 Revenue Sharing — confer their owners a right to a portion of revenues or fees generated by the business;

📣 Hybrid — have features of a security token, currency token and/or utility token;

👉 Given all the benefits, security, and flexibility that the security token guarantees, it is clear that its adoption will increase dramatically in the coming years.

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