Evolving Methods of Investment
  • IPO (Initial Public Offering) A business invites the public to invest in it by buying shares with the prospect of sharing future profits via dividends. Such invitations (offerings) are vetted by regulators and underwriters (firms that help handhold the IPO process).
  • DLP (Direct Listing Process) A newer form of IPO does away with underwriters. It is still vetted by regulators but the company sells shares directly to the public. Doing away with the underwriter is like going for a hike without a guide. A guide is not needed if you just want to jog around the park.
  • ICO (Initial Coin Offering) This is a 'tech IPO' with no vetting by regulators or underwriters. As history has shown, this can be a magnet for dodgy offerings.
  • IEO (Initial Exchange Offering) - This is an ICO that is vetted by and offered through a crypto exchange (eg Coinbase). The exchange acts as an underwriter and promoter for the ICO. Not dissimilar to ECF (Equity Crowd Funding) platforms.
  • STO (Security Token Offering) - This is an ICO for security tokens and is (or should be) vetted by regulators. Security tokens are shares in assets or businesses (vs utility tokens such as game arcade tokens, which are meant to be utilised or consumed).
  • DSO (Digital Securities Offering). This is an STO for legacy assets (stocks, property, gold etc) whereby assets are tokenized for better liquidity.
  • SCO (Staked Coin Output) - The latest proposal is radically different. Instead of directly investing money, you are required to participate in the business. Like if your friend wants to open a burger joint, you are not to plonk down cash for a share in the business, instead you participate directly by, say, staking as the supplier of buns to the business. 1
[Image: StakeFish is a validator service for staked networks, used here as an illustration for staking, it is not directly related to the the staked coin output mentioned above.]