This is a paper named "How Blockchain Will Change Leadership Strategies for Effectively Managing Organizational Change".

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INTRO DUGTIDN Blockchain technology is becoming a gold standard in maintaining data integrity through decentralized data stores. A smart contract allows people to build an application on a decentralized server. lhis fact has an immediate impact on several industries. Anyone can instantly access global liquidity in the nancial sector by using decentralized nance. Artists and game developers can mint a Non-Fungible Token {NI-T] that represents digital collectibles or in-game items in the entertainment and game industry. these phenomena become a new horizon for creating a system that can reach global users instantly. Blockchain also impacts the fundraising process. People can access international funds by introducing their project and offering tokens to represent its ownership. In its early days. a fundraising mechanism through a blockdtain is known as initial Coin Olfering (1CD) {Kondova and Simonella. 2019). Technology causes disruption. not only in the system structure. but also in talent. The Industrial Revolution 4.0 causes an increasing need for qualied digital talent by everyorganiaation (i-'altievi. 2010}. Moreover. in the current pandemic era. technological adaptation is becoming increasingly massive. So. it is important for digital leaders to pay attention to this aspect so that the organization can go further (i-altievi et at. 2019}. 'I'allsing about talent. of course there are skills needed to respond to the challenges of the times. The latest system .such as the Security Token Offering {STD} used by the company is one of the blockchain adoptions that is enough to change the foundation of organizational behavior in modern times to become decentralized. In the old way the organization will raise funds in a traditional way so that the leadership will stick to the old ways such as releases on the stock exchange and using traditional crowdfunding. At this time. along with changing times. it has also changed organizational behavior. especially the behavior ofleaders in terms of raising funds for companies. 5T0 adoption bridges the gap between ICU and Initial Public Oll'ering (1P0). Thus. STDs offer a safer way to raise funds publicly. but still comply with existing regulations and provide easydigital access. In 1C0. the token issuer publishes a \"white paper\" {document like a business plan} that elaborates the projects detail (Momma et al.. 2U 19). People can participate in the offering by sending cryptocurrency to the token issuer's address and getting the token as an exchange. [CO reached its popularity with raised more than $133 over the past 201'? and 2|]IS {E'enu et 31.. lan). However. the easiness of fundraising through 10!) led this innovation to many scam activities. ICU advisory firm Satis Group reports that approximately T896. ofICDs are scams. around 4% fail. and only 15% subsequentlytraded on an exchange (Howl-at and Hod-app. lnlS}. This fact leads several countries to ban [CO activities and warns citizens to consider [0 a very high-risk investment. However. the scam and ban of [C0 are not relieving the fact that ICU is the most promising fundraising Inethod for anyone that does not have access to VC and global investors. Several firms proposed a new investors to fraction the digital asset ownership while easily mechanism called STO. A token offering process should sit under tracking the ownership and transfer of an asset (Levin et al., applicable securities and fundraising laws. 2018). By creating a security token, investors can access a broader An STO is essentially a regulated version of an ICO. It market and generate more liquidity for the capital-raising process involves the creation of digital assets called security tokens. (Liu and Wang, 2019). A well-designed STO will significantly STO could be especially run on a custom-made blockchain benefit the fundraising process (Narayan and Tidstrom, 2020). platform for the transaction or use an existing system, such as In designing an STO, investors' rights and obligations must Ethereum or Hyperledger. The blockchain platform also includes be included in the security token, whether as a code or transfer and other controls to enable regulatory compliance. The procedure (Miglo, 2021). The exchanges-related regulations are token issuers must comply with relevant legal and regulatory also considered essential components that need to be included requirements, as do brokers and exchanges. The issues related in the STO mechanism (Kondova and Simonella, 2019). Several to transferability, electronic transactions obligations, custody more features and functions are considered crucial factors to regulation, insurance, and stamp duty can also arise. be defined in the STO. First, the information of token issuers, The benefits and application of blockchain technology in potential investors, and jurisdictions needs to be disclosed during Indonesia have attracted the attention of a number of parties the STO process (Venegas, 2017; Martino et al., 2019). Second, to adopt the technology. Ironically until now, especially for the government's support, supervision, and verification also the real sector, blockchain optimization is faced with a number become a vital factor in ensuring the accountability of the of obstacles. In addition to lack of understanding, synergism STO process (Chohan, 2019; Momtaz et al., 2019). Finally, the is a factor that influences this. The leadership factor is also standardization and synergy between the regulator, token issuer, important because without a change in management initiated by and every stakeholder in STO also become an essential agenda in the leadership to change their strategy to keep up with the times, the future (Van der Elst and Lafarre, 2019; Zhang et al., 2019). the adoption of blockchain technology will not be rapid. The motivation of this paper arises from the fact that the STO mechanism could allow its stakeholders to reach the infinite potential of a token offering process without ignoring SYSTEM ARCHITECTURE the regulatory barriers in each country. The existence of a decentralized record of a smart contract allows the token to In designing the system architecture, stakeholders and existing be exchanged quickly. This research aims to design an STO software systems involved in the STO are identified. The stakeholders involved in the STO mechanism are identified system to fit the regulatory requirements while preserving as follows. decentralization. With Blockchain, people can benefit from global liquidity access and native data integration in the token . Token issuer: Issuing security tokens as part of the offering process. company's ownership. . Transfer agent: Act as an underwriting company that helps to BLOCKCHAIN verify the token sale. . Public investor: Party interested in security tokens and With the popular definition, Blockchain is a linked list of blocks participating in the public sale phase of STO. (nodes) that contains a set of information. This linked list Private investor: The party invited and participated in the private sale phase of STO. forms a network chain owned by each participant (miners). The mechanism that decides which miners will be authorized Security auditor: Third-party entity responsible for giving to validate a new block is called the blockchain consensus audits and checking security vulnerabilities. mechanism (e-g., proof-of-work, proof-of-stake). Blockchain Furthermore, the existing software system is identified as follows. technology is an immutable, transparent, and traceable platform that could answer the utmost trust, which a standard centralized . Regulation and compliance system: System that provides architecture system does not have. Figure 1 shows the chain- applicable securities and fundraising laws. structured Blockchain, which has become the "gold standard" . Rating system: Software system owned by a rating agency many blockchain networks and projects use. to give the rating to security token based on the token performance and information. Custody system: Storing and managing security tokens on the SECURITY TOKEN OFFERING crypto wallet secured through several mechanisms such as HD Wallet, HSM, and MPC. The Security Token Offering (STO) was coined as an unregulated . Third-party data provider system: Data provider for smart Initial Coin Offering (ICO) solution. The token in STO contract (e.g., price data, historical data). represents a company's ownership and sits under applicable . Decentralized file storage system: Decentralized system for securities regulation (Yano et al., 2020). STO mechanism usually storing and accessing files. has a more straightforward procedure than the capital market's Blockchain platform: Decentralized public/permissioned current capital-raising process (Ante and Fiedler, 2019). The ledger that can record and execute the transaction with a set adoption of security tokens in the financial industry allows of algorithms.Carl's-orient Elly-I1 [or Security Token Offering System -S'|'D \"HIT-lemon FluEi | Comp-onem diagram for STCI web fronteno. Ll-Id: Ii:- P-uni-Ilnmw-e [mm-r nun-n rm\"- .... .....,L_J With the stakeholders and existing systems identied. this paper proposes the system architecture for STD. The rst phase of modeling is the system context diagram. SYSTEM CONTEXT DIAGRAM The diagram will show high-level interaction between proposed system stakeholders. and existing systems. This paper proposes two core software systems in the STD mechanism illustrated in the system colitext diagram. The two software systems consist of: 0 Security Token O'erlng System.- A Webz or Common App including Backend and Frontend application 9 Security Token Offering Dpp System: A Webs or Decentralized App including Smart Contract and Decentralized Storage. Both systems interact with stakeholders and existing systems in the STD mechanism. The proposed system context diagram becomes the big picture for the following diagram. COMPONENT DIAGRAM This section provides a more indepth visualization of the STD system. The component represents a grouping of related functionality encapsulated behind a well-dened interface. The first component diagram proposed in this paper is the STD web frontend. The components are coined based on the essential token offering functions explained in the previous section. The component diagram for the STD web frolttend visualizes the interaction between components and its interaction protocols. The components in the STD web frontend include: - Know-Your-C'nstmner (KYC) page: Store and secume verify the token issuers' and investors' personal information. 0 Taken issuing page: lnitial page for promoting and issuing security token offering. a: Token information page: Require basic token information such as ticker, initial supply, owner. etc. o Token sale page: Security Token listing and sale page for private and public sale phase. a Sales Liering page: Divide the token sales into several phases: private and public sales along with its rules (hard cap and soft cap}. a Supply control page: Track and manage the token supply. including increasing and decreasing the token supply. a Token incentive page: Initiate and manage token incentives related to the changes in token supply. in Compliance page: Lookup and manage the compliance for token offering based on countryjurisdiction. These components represent a static web frontend for handling several activities related to the STD mechanism. Most of the stakeholders will interact with the STU system through these components. The diagram also shows ie interaction between components and the STD web application. This paper proposes a component diagram for the STD web application to extend the details ofthe container. CONCLUSION The outcome of this paper is a novel system architecture of an STD system. The architecture and designwere coined to fulll the basic requirement of token offering and applicable regulations and laws while preserving decentralization. As mentioned in section System Architecture. the basic consideration in designing the system architecture is the token o'ering requirements found in the previous research. This paper uses the E4 model approach to design the system architecture to address the requirements. The system context diagram shows that the 5'1'0 architecture is designed as 5T0 System (off-chain} and S'I'O Dpp System (on-chain}. Off-chain is a system that runs traditionally but is designed to interact with the blockchain system. An Onchain system is a system that runs and is hosted on a blockchain platform. Both systems are complementary to each other in running the STD mechanism. In the system colnponent diagram. basic token offering requirements are represented by several STD web applications and STD web frontend components. The component diagram also explains the security token 's security aspect by visualizing the interaction between crypto wallet. smart contract. security auditor. and external custody system. The diagram also visualizes the smart contract factory and proxy pattern to anticipate future changes in the security token mechanism. The proposed system architecture can be used as a basic reference to develop an STD mechanism in any blockchain platform. The system architecture proposed in this paper can be modied in the future to t the exponential growth of blockchain technology. For example. the KYL' module in the off-chain system can be replaced by zero-knowledge proof in the privacy-preserving blockchain technology. Blockchain technology allows leaders to independently view the same data. Blockchain will eliminate the need for a central authority so that everyone will have the same ledger. have a consensus mechanism. and can build applications. The problem that is obtained when change management uses its own blockchain technology solution is that the company must also manage security. billing data. and the last problem is to create its own blockchain network which costs quite a lot because it requires its own consultant to build their blockchain network. AUTHOR CONTRIBUTIONS RR conducts research. data collection. analysis. and article writing. HP. FLT. and BS guided. directed. and provided advice on this research. All authors contributed to the article and approved the submitted version. FUNDING This work is supported by Research and Technology Transfer Ofce. Bina Nusantara University as a part of Bina Nusantara University