Put simply, an IEO is very much like an Initial Public Offering (IPO) in that it is a process of offering shares of a private corporation to the public with the goal of raising funds on a stock exchange.

However, instead of offering shares of a private corporation, an IEO is a process of offering digital securities (also known as security tokens) of a private corporation to the public with the goal of raising funds on an IEO platform (such as Kapital DX).

Digital securities are essentially digital representation of financial securities, i.e. traditional capital markets securities that are recorded and traded on a blockchain.

They are recognised as securities under the Capital Markets and Services (Prescription of Securities)(Digital Currency and Digital Token) Order 2019, the same way as traditional securities, such as stocks and bond certificates.

Since digital securities are essentially digital representation of financial securities, this means you would invest in them just like you would in traditional capital markets securities.

In other words, you would invest in them---be they private equity, private debt, or private funds---to own rights such as ownership, payment to a specific sum of money, or entitlement to a share of future profits or cash flows.

The exact nature of the rights that you will be provided with from each digital security (or security token) will clearly be stipulated in the white paper of each business that is issuing these securities.

Click here to see the advantages of digital securities over traditional securities.