ICOs have gained popularity and propagated so quickly as they utilized the loopholes of the uncontrolled market and the major utility tokens were generated, in reality, alike securities.
So, we can say that regulators will soon announce their guidelines and these loopholes are expected to be ended soon.
It also indicates that the uncontrolled way of ICO will become limited with real utility tokens.
Consequently, little controlled or uncontrolled ICOs will possibly retain their value to fund the social ventures, startups, and tech where the utility tokens will not be considered under the securities laws.
In upcoming time, STOs (Securities Token Offerings) will be known and used in raising the funds for proven and mature businesses.
As securities´ laws are applicable to such category of issuance of tokens, the mature businesses will be attracted due to decentralized, borderless and highly liquid market.
Further, the VC industry is also expected to attract with the STOs soon to liquefy and exit the many illiquid shareholdings acquired by them in a portfolio.
STOs are likely to impact the internal structure of the corporations. Tokens are also important as they permit the corporations to work in a decentralized business manner.
Here is the future of the utility and security tokens:
The problem with the ICOs is due to many avaricious founders, scammers, half-supported business models and cheeky advisors who fool others with making-rich-ride.
The sale of ICOs will be ended in around 6-12 months.
The other reason is the incorrect arrangement of founders’ and investors interests’ because purchasing utility tokens do not permit the rights to shareholders in a respective startup. Therefore, utility token worth is not associated with the founder’s performance and startup success.
It will establish the world of Blockchain including scalability, transparency, increased liquidity, security, easy and fast shares transactions, more inclusivity.
The race of token investors is expected to become very competitive just like the dotcom bubble in March 2000. The unavoidable token crash will be the start of the token economy. And as the dotcom bubble depleted, the mobile internet and social networks came into effect. So, we never know what is going to happen in the future.
After many years, the World of Blockchain and the World of Venture Capital may come together and unite the two worlds.
The second stream of ICOs will be due to equity tokens sales which will permit the rights to investors as a shareholder and comprise liquidation preferences, reporting rights, dividend participation, exit, voting rights, and Pro-rata investment rights.
The worth of many utility tokens is expected to reach zero in the future. We can think the utility token in term of pre-paid voucher considering a non-real service or product. It is also possible that the business models which are based on a decentralized network or protocols may survive.
When the tokenized equity will have regulated and stable technical framework, the break-down of the Venture Capital industry will start because LPs (limited partners) will not resist illiquidity gap of 10 years and when they have an option of liquid options.
It will also form a world of Venture capital consisting deal structuring, deal selection, due diligence by a veteran lead investor, active portfolio management, a legitimate framework to balance founders’ and investors’ interests.
It is clear that the ICO is not going to end in the future, although we can expect certain tweaks in a manner it will go on different paths as compared to what we are seeing today.