Defining Token Rights
Token holders may have various rights, depending on the business model and investment structure. Clearly defining these rights ensures regulatory compliance and investor protection.
Common Token Rights
Voting Rights β Token holders may have voting power in company decisions.
Dividend Rights β Investors receive a share of profits or operational income.
Liquidation Rights β Token holders may have claims on the asset in case of liquidation.
Conversion Rights β Security tokens may be convertible into shares or equity.
Redemption Rights β Token holders can redeem their tokens under specific conditions.
Why This Step Matters
Ensures legal clarity and enforceability of investment rights.
Aligns token structure with investor expectations and risk profiles.
Supports liquidity planning and secondary market trading options.
By defining token rights properly, issuers ensure that security tokens remain compliant, transparent, and investor-friendly.
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