Initial Coin Offerings often referred to as ICO is an unregulated method of raising funds that involve digital tokens. ICO in recent times has gained immense popularity as companies around the globe are adopting it for funding of start-ups instead of raising capital through banks or venture capitalists. This is a new method through which organizations turn to cryptocurrencies with the issuing of new digital coins or tokens. The biggest feature of ICO is that the investor is not entitled to an equity share in the company. Besides the coin being used on the created product, there is also a possibility of the coin appreciating in value that can be in future traded for a profit.
Launching an ICO is by no means a simple task. Below we have given a few tips and insights required for ICO development
Create a Brief and Comprehensive ICO Design
It is essential to build a stable and secure product design using your token on the blockchain. A company uses ICO to release and sell a fraction of tokens to investors. This, in turn, will help to pay a certain percentage of the token shares to investors and also gather funds for developing the product.
Developing a Whitepaper
Your ICO project must be ready with a roadmap and whitepaper outlining all technical details of your project and related problems that need to be resolved. Such reports will present the efficiency of your project for potential investors helping to win their confidence.
Assemble a Reliable Team with Experienced Advisors
It is of utmost importance to have a reliable team and experienced advisors who can effectively win investors and drive the project forward.
Develop a Pricing Strategy
The ICO pricing can be determined by your aims and growth expectations. The basic pricing methods are the undetermined price, fixed price, and Dutch auction.
Marketing of Token Sale
The ICO token sale will proceed only when you attract the attention of your target audience. What is actually required is an initial hype that creates a buzz about your token to activate marketing on social networking sites like Facebook, Twitter, Linkedin, and YouTube. In fact, Reddit and Bitcointalk are effective channels that allow you to be known in the crypto community.
Since potential investors are always skeptical so are not always willing to take a risk, you have to protect the investors as well as the investment by using discounts, Escrow Wallet and Fund Return.
ICO like all digital currency and wallet are prone to hackers. It is very easy for hackers to steal your money through the backend of an ICO by replacing the company’s wallet address to their personal address. It is advisable to invest in a reliable security company to secure your project from hackers and DDoS attacks
Seek Legal Council
You are required to seek legal council or jurisdiction to operate under specific legislation that includes securities, taxes, KYC and AML laws etc.
ICOs have become an integral part of the blockchain technology in the capital market that will transform technology in the time to come. A strong foundational structure is thus a must for developing a successful blockchain project.