A token (security token) that issued by means of security token offerings (STOs) that represents ownership (equity interest/ stake) in an underlying asset, usually a share of stock of a company. All the terms and conditions related to the stock holdings (equity holdings) are registered on a blockchain. Equity tokens are specifically issued through the equity token offering (ETO) process and are tradable on the blockchain, offering their holders more voting transparently as to decision making and control of voting rights of the issuer through the blockchain.

Equity tokens holders become shareholders in the token issuer, and all amounts paid to acquire the issued tokens are directly invested in a company’s operations.