STO (Security Token Offering) is the process of offering and selling digital assets classified as securities, such as stocks or bonds, through the blockchain. STOs are an evolution of initial coin offerings (ICOs) and initial token offerings (ITOs) that are more compliant with securities regulations. In an STO, the digital assets being sold are classified as securities under applicable securities laws, so they must meet certain requirements and regulations.

The STO process usually involves the following steps:

1. The project applies for registration and obtains approval from the securities regulator.
2. Creation of securities offering documents, such as a prospectus or offering memorandum.
3. Conducting due diligence and verification of qualified investors.
4. Offering and sale of securities tokens through a regulated platform.
5. Distribution of security tokens to participating investors.
6. Trading of security tokens on a registered securities exchange or regulated secondary platform.

STOs offer advantages such as regulatory compliance, transparency, and better investor protection. However, the STO process tends to be more complex, expensive, and time-consuming than traditional ICOs or ITOs. Security tokens issued in an STO may represent equity ownership, income rights, or other assets governed by securities laws.