## A simple explanation of token economics required in a STO.

**Value of the tokens**

The tokens issued represent the value of the issuer's assets on the blockchain. Therefore, simple mathematics allows you to calculate the value of each token during the issuance:

First, the issuer needs to determine the value of the underlying asset during the offering. After this, the amount of the asset that will be tokenized will need to be defined (it could be the totality for a new investment fund, or 15-25% for an equity fund raising for example). Finally, they will need to determine the number of tokens issued.

The token economics can be calculated simply:

*value of 1 token = (total value of the asset*% tokenized) /number of issued tokens *

or

*number of issued tokens = (total value of the asset*% tokenized) / value of 1 token *

For example, if the issuer plans to tokenize the totality of a 100 million euros real estate fund, and divide it into 100 million shares, each share is valued at 1 euro.

To convince investors that the underlying asset is valued properly and that the investment is a good opportunity, the issuer will need to detail the anticipated revenues and rights associated to the tokens.