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Ico is the issue of token without any backed value.
This method of financing projects is already receding. For investors, this was very risky from a financial point of view and no one could be sure of the return of his finances. So it gets STO (security token offering). Tokens are represented at fair value. This is a way to avoid fraudulent ICO projects.
Tokenization is transfer of assets with fair value on tokens.
Example: You get an idea of some technology that works but you do not have enough finances. So you will issue a STO to get a funding to develop your technology. The tokens you give will be covered by your property. In the event of your project failure, you will lose your property, but investors will get their investment back.