When it comes to ICO funding, every crypto enthusiast remembers when Ethereum was launched as an ICO project in 2014. Since its inception, Ethereum has seen tremendous growth and has been able to contend with the crypto giant Bitcoin.
While Ethereum was not the first ICO project, there has been a spike in ICOs since its launch. According to a Fundera survey, ICOs have raised a total of $22.5 billion for new ventures since 2014. According to the same study, 3,782 new ICOs were launched in 2019. These figures demonstrate the huge effect that ICO funding has had on the crypto community.
Initial coin offerings (ICOs) are mainly used to introduce new cryptocurrencies to the sector. The key benefits of an initial coin offering (ICO) for investors are liquidity and decentralisation. Unlike other investment opportunities, which bind capital for many years, an ICO's capital is immediately available. ICOs are also decentralised since everyone, from anywhere, can invest in an ICO and benefit from it.
ICOs, unlike IPOs, are subject to less regulations because they only deal with paper projects. How can a developer use an initial coin offering (ICO) to raise funds for a new project? What are the measures involved in creating an ICO?
Pre ICO Period
The pre-ICO era refers to the time when an entrepreneur is considering holding an ICO. What should the firm be on the lookout for? What do they do before launching an initial coin offering (ICO)? It would be beneficial if the company followed the pre-ICO stages mentioned below:
Generating ideas
The concept is the first thing that comes in for every project. People still do a lot of brainstorming and market analysis to come up with the best idea. The trader would try to figure out what the market's flaws are and how to fix them.
A solution to a business issue or something fresh in the market is the best idea. Since the idea of an ICO is to bring tokens, or cryptos, into the market, a trader will try to solve problems related to the crypto market.
The primary aim at this point is to understand the audience. The project's owner should first learn about the competition and the target audience before coming up with a solution that meets their needs. The public will invest in the new initiative if the new approach solves business failures.
Project planning
The project owner should assemble an outstanding team to work on the latest project concept and ensure its progress during project planning. The team will be familiar with the legality of ICOs in the country where the ICO will be held.
The next move is to write the project's white paper. Every ICO project must have this document, which details all of the important aspects of the project. Team members, crowd purchases, technological features, and legal concerns are all included in the whitepaper.
Another important phase in the planning stage is to enlist the help of ICO advisors. ICO advisors are experts in a variety of fields that can support the ICO team with their knowledge. Judicial, marketing, and industry guidance are only a few of the services that the advisor will offer.
Some of these consultants also assisted other startups in becoming large-scale projects. However, a project owner should be wary of would-be advisors who have no prior experience with ICO production.
The dangers of the project are expected to be laid out for the public to see. The right way to call people on crowdfunding for the ICO project is to create a white paper, website, and participate on Quora and Reddit.
Any project launched by an ICO must have tokens that will eventually be listed on exchanges. According to Coinmarketcap, there will be over 6,000 cryptocurrencies in 2020. As a result, if the project is to succeed in the face of stiff competition, it must demonstrate its value. The project must demonstrate public relevance and the need for tokenization.
After you've completed all of the pre-ICO measures, the final step is to publicise the campaign. The ICO project creation team is now looking for ways to promote their new project. To keep in contact with clients and potential buyers, advertising may include the use of social media platforms. The precise date and time of the ICO's launch was announced to the general public.
ICO Period
The ICO cycle includes the holding of the ICO, and the crowdfunding process starts at this stage. This procedure will take anything from a few hours to a year.
Many ICO ventures have a finite number of tokens so that investors who want to get in on the ground floor will get the best deal. As a result, once the ICO starts, investors can exchange their Ethereum, Bitcoins, or other ICO-accepted currencies for project tokens.
To avoid security breaches caused by hacking, it's vital to keep an eye on the website during this time. The ICO project will fail if any successful attacks are carried out at this stage.
Post ICO Period
Some developers overlook this point, particularly after the ICO project has raised the funds expected in the white paper. Ignorance may lead to negative consequences, as this stage is just as important as the others.
Investors can choose whether to hold on to their tokens or use them in a specific project. Finally, all startups want to be listed on exchanges so that investors can easily participate in token sales or exchanges, process deposits and payments, and benefit. To be listed on major exchanges, a project must:
Be uniquie
Be innovative.
Have a strong and genuine demand
Demonstrate that the tokens will not be used in any fraudulent transactions.
Developers should conduct routine device testing and audits to identify any flaws and correct them as soon as possible. Maintaining investor confidence is as simple as posting regular alerts and reminding them of any potential risks.
Newsletters covering latest news and developments should be sent to investors. Developers may also use social media networks like Telegram and Twitter to connect with investors and the general public.
Conclusion
As previously reported, the aim of keeping an ICO is to raise funds through crowdfunding for a specific project. However, after crowdfunding, it is important not to relax; rather, it should be the start of even better developments in the future.
While there are benefits to ICO ventures, one major risk is that once the tokens become tradable, the original investors will want to dumb the tokens on exchange markets. However, an ICO project with growth-oriented developers cannot be killed by this alone.
Since there will be confidence between the concerned parties, developer-investor openness will ensure faster growth of ICO ventures. All things considered, ICO financing has previously proved to be the most effective form of funding for startup tokens and cryptocurrencies. The strongest crypto funding tool is, without a doubt, ICO financing.
