Part 2:
The tokenization process
The following information was compiled and published as part of the research project. This is the second part of the three part series.
The STO process
Introduction
The tokenization of an asset or security is first and foremost a digitalization project. Blockchain (respectively decentralized ledger technology) and its nature of decentralization represent only one part of the whole implementation of such a project. Nevertheless, the aspect of decentralization is key to eventually leverage on the digitalization of securities / assets. It is eventually the key driver for the implied benefits of digital assets (eg efficiency gains, higher liquidity and more transparency - see part one of this series of articles). To sum up, a security token offering (STO) combines various digitalization elements with decentralized ledger technology into a holistic process.
However, how does that work exactly and what does it include? The process can generally be split into three main phases: 1. Preparation, 2. Execution, 3. Continuation. Each phase can be subdivided into multiple aspects. Ideally, all of these should be addressed in every security token offering, especially for the tokenization of equity and debt capital. Figure 1 shows a model of this simplified tokenization process. Please note that in practice some aspects may be covered in other phases.
