A Security Token Offering (STO) is a fundraising method where companies issue digital tokens that represent ownership in an underlying asset, such as equity or debt. These tokens are often built on blockchain technology and comply with regulatory frameworks, making them legally recognized as securities.STOs provide investors with certain rights, including dividends or profit-sharing, depending on the nature of the asset being tokenized. This offers a level of security and transparency often associated with traditional investments.Unlike Initial Coin Offerings (ICOs), which typically involve utility tokens with uncertain regulatory status, STOs require issuers to comply with legal requirements. This lowers the risk for investors and can attract a more traditional pool of capital. STOs can facilitate access to funding for startups and established companies while allowing investors to diversify their portfolios with digital assets linked to real-world assets. Overall, STOs blend the benefits of blockchain with the structure and investor protections of traditional securities markets.