The Future of Funding: Equity Tokens in Evolution

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Web3 projects are increasingly turning to equity tokens as a more secure and transparent way to raise capital. Brickken,
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Web3 projects are increasingly turning to equity tokens as a more secure and transparent way to raise capital. Brickken, a tokenization solution provider, is simplifying the process of issuing equity tokens, making it easier for projects to tap into the benefits of this innovative approach to fundraising.Asset tokenization, the process by which an issuer creates digital tokens on a distributed ledger or blockchain, has become one of the biggest trends, and it has only scratched the surface of traditional finance as of today, preparing the stage for what may transform capital markets.According to recent reports, tokenized assets have already established a $75 billion market. It has the potential to go as high as $10 trillion by 2030 while penetrating asset classes like private equity, corporate debt, real estate and fine arts.Previously, utility tokens made waves during the initial coin offering (ICO) craze that culminated in 2017. Popular blockchain networks and projects, including Ethereum, Cardano, Filecoin and Chainlink, have succeeded following ICO events that secured crypto funds from communities.However, the mentioned networks reflect the best-case scenarios. After surging in popularity, ICOs attracted opportunistic projects that couldn’t clearly define their tokens' utility, and some turned out to be outright scams.From utility tokens to equity tokensAs blockchain technology evolved, financial and crypto literacy has also increased. This creates a window of opportunity for new crypto and Web3 companies to use tokenization mechanisms to align the interest of early investors with the success of their venture by adapting the concept of equity tokens instead of utility tokens. These projects can either launch by selling equity tokens or convert a portion of existing utility tokens to equity tokens, giving ecosystem members a chance to become partial owners.Equity tokens are a type of security tokens that represent equity or partial ownership in a project. They can be seen as the Web3 equivalent of shares in a traditional company. The regulatory framework has matured and evolved to the point that it enables the issuance of equity tokens compliant with securities regulations.Equity tokens offer several benefits to Web3 companies:Retail and institutional investors can get exposure to early-stage blockchain projects that are not listed on public stock exchanges. This is an efficient capital-raising mechanism for Web3 projects around the world that can also turn into revenue opportunities for investors.Equity tokens offer transparency, secure ownership records, and real-time trading capabilities, making them more attractive to a wider range of investors.Moreover, equity tokens offer cost savings on management fees and bureaucracy, further enhancing their overall efficiency.How Web3 projects can leverage equity tokensWeb3 projects can use any network as their underlying blockchain, including Ethereum, which dominates the tokenization trend. However, they also need a specialized tokenization platform for all the behind-the-scenes work. Brickken, a tokenization solution provider, aims to simplify tokenization in the same way Shopify did for e-commerce, supporting Web3 teams with the entire process of tokenization.Token Suite, Brickken’s flagship product, comprises user-friendly tools and features to simplify the creation, selling and management of digital assets, empowering entrepreneurs and investors alike.Token Suite is a one-stop solution for managing relationships with investors. Instead of dealing with multiple platforms, Web3 projects can rely on Brickken for anything from token creation to interacting with their community and distributing earnings or dividends to them.Source: BrickkenBlockchain companies offering existing utility tokens can use Brickken to convert a portion of them to equity tokens, giving investors a chance to become stakeholders. The platform makes the entire process of exchanging utility tokens for equity tokens easy and hassle-free, ensuring a smooth transition for both the blockchain business and its investors.Leveraging Brickken’s extensive partner ecosystem, the Token Suite service empowers companies to tokenize their assets securely and compliantly, enabling global access to tokenized opportunities.Converting utility tokens to equity — case studyBlockchain auditing firm Hacken decided to upgrade its relationship with investors by converting a large portion of its utility tokens to tokenize a 10% share of Hacken OU equity. It has become among the first companies to leverage existing utility tokens to tokenize equity. Hacken partnered with Brickken to use its Token Suite platform for the entire tokenization process.“We have reviewed tens of different tokenization platforms, and Brickken is, by various parameters, our number one choice,” Hacken Group co-founder and CEO Dyma Budorin said at the time.Offering equity tokens is a win-win for both Web3 projects and investors. Web3 compani
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