Over the past decade, cryptocurrency has managed to revolutionize the finance game by a huge margin. As virtual currencies gained substantial prominence, the concept of blockchain as well as alternative coins grew alongside it. In addition to this growth, many people started to realize the potential of cryptocurrencies as a fundraising opportunity. In a world which possesses several significant barriers for entering into the early-stage investment, crowdfunding through cryptocurrencies are viewed as goldmines.
By using digital currencies as a means of investment, small businesses would be able to raise money significantly by simply creating virtual currencies. In that regard, several fundraising forms began surfacing the floor upon the realization of the exclusive benefits. Among the available methods of crowdfunding, Initial Coin Offering rose as the dominant method of crypto crowdfunding.
Initial Coin Offering:
In the world of digital currencies, an Initial Coin Offering(ICO) has shown multiple parallels resembling an IPO for a stock. Any company looking to raise funds, create a new coin, application or service launches an ICO as a way of raising capital. Token sales, crowd sales as well as coin offerings enable the companies to raise funds significantly. This process is done through releasing virtual currencies to the interested parties in the form of new digital tokens.
The ultimate hope of an ICO is that your primary business idea will receive extensive publicity, buy-ins along with use. This increased circulation eventually leads to the rise in currency value. This in turn increases the people’s initial investments just like the conventional IPO. While talking about the basic differences, unlike the IPO, launching an ICO crowdfunding does not result in stake ownership in the company. These distributed tokens might come with an utility related to the service or the product that the company is offering. In order to understand more clearly we might have to dig deeper into the working of an Initial Coin Offering.
How does an Initial Coin Offering work?
When a digital currency project wishes to raise money using an ICO campaign, the project organizers’ initial step would be to determine the type of structure with which they need to operate. These structures can be of different types. They are:
Static supply and static price: A company is entitled to set a particular crowdfunding target or limit, which simply means that every single token sold in the ICO crowdfunding will have a predetermined price and the total token supply will be fixed accordingly.
Static supply and dynamic price: An ICO is allowed to have a fixed token supply as well as a dynamic funding goal which simply means that the amount of funds received during the campaign fixes the overall price per token.
Dynamic supply and static price: Few ICOs will come with a dynamic token supply rather than a static one and this means that the amount of funds obtained will fix the overall supply.
Apart from structuring the ICO campaign, the cryptocurrency related project normally creates a whitepaper, which in return gets a hold of the potential investors through a new website that is ultimately dedicated to the token. Benefits of crowdfunding allows the frontrunners of the project to use their white paper for explaining the crucial information related to the ICO campaign. The project lets out the white paper as a part of its ICO crowdfunding campaign that is designed to encourage participants and supporters of the project to buy some of the tokens.
Investors commonly use conventional or digital currency for buying new tokens and it is very common for investors to pay using other forms of virtual currencies like Bitcoin or Ethereum. The newly distributed tokens are more or less similar to the shares of stock that are sold to investors during an IPO. In case if the money raised in an ICO is less than the minimum required amount, then all the money may be returned to the investors. When the raised money meets the requirements of the project within the given time, then the raised fund will be spent for developing the project’s goals. If you are to get a grip on the entirety of ICO working then you ought to completely understand the subsidiary benefits also.
Benefits of ICO:
Initial coin offerings come with several extensive benefits that can be benefitting for business owners who are looking to start or grow fresh opportunities. The below given are some of those exclusive benefits of crowdfunding using initial coin offerings:
Anyone can buy tokens: Token launches through big-time initial public offerings differ from the conventional equity sales. Contrarily, tokens sold at an initial coin offering(ICO) can be sold to anyone across the world. The purchases carried out are mostly anonymous.
Tokens are sold globally: An ICO campaign provides the chance for investors across the surface of the earth to invest in fresh coins. Virtual currencies transferring into project coins are a global initiative in many cases. Token sales paid using digital currencies are always open for operation.
Token liquidity premium: When a set of tokens is set up for sales, then they automatically gain some sort of value. This value then will be sitting freely within a worldwide marketplace. This is contradicted to the conventional IPO, where it can take decades in some cases for investments to become exit-capable. Token economy liquidity enables shareholders to take part in new ICOs with the same amount of funds.
Lesser entry barrier: The positive entities of ICOs can raise capital funds from wherever they are located and they can get it from whoever they want. This ultimately eradicates the barrier for entry which was once hailed a success in certain geographic areas.
Free beating business model: A business model that is capable of beating free is the ultimate holy grail of opportunity for potential investors. In that regard, the launch model that comes with an ICO offers a feasible solution. With a coin offering in place, technology-based companies as well as open source projects can spread their wealth. The potential money making ideal from early stages will be an excellent incentive for ICO investment opportunities.
These are some of the benefits that come with a successful ICO campaign. Apart from these benefits, it would be better if you are exposed to some real time examples of a successful ICO launch. Let us see that below.
Successful ICO examples:
All around the world, some of the most successful initial coin offering campaigns have managed to raise billions of dollars for their causes. Despite ICO being a major tech sector, there are plenty of business opportunities for all kinds of businesses. Listed below are some of the most successful token launches that have happened so far.
Ethereum: This was one of the first initial coin offerings ever to take place. Ethereum is much more than just a virtual currency. It is a blockchain technology that is used to develop decentralized applications through smart contracts.
IOTA: This ICO campaign was run with the idea of integrating blockchain technology into the Internet of Things technology. The decentralized transaction ledger provided a scalable environment without any fee charged.
EOS: This is a popular digital currency which has managed to raise around $200 million within 5 days of its ICO campaign launch. EOS claims to be the ultimate alternative to Ethereum’s network. EOS provides several tools for business that operate seamlessly on the blockchain.
NXT: This was formerly known as Antshares and has gone through a couple of token sales rounds. This service is connected with Microsoft and started its first ICO. NXT’s whitepaper has a detailed explanation of substantial ROI coin offerings.
Now that you have read through some of the most successful ICOs of all time, it would be only fair to know about their first big step towards a successful fundraising campaign. In order for their fundraising to be successful, all the above mentioned entities have chosen the best ICO script providers.
The Bottom Line:
In order to run a successful ICO campaign, it is very crucial to carefully evaluate the developing group to whom you are handing over the reins. Upon realizing the benefits and profit margins, there are plenty of amateur developers in the crypto space. You need to be extremely careful before picking the ideal ICO development company. In that regard, we, at Zab technologies have created multiple ICO scripts that have gone on to be very successful. We have a group of professional and technically sound developing personnel to get it started. We are being hailed as one of the best ICO development companies by our clients across the globe. Over the years, we have developed some stellar ICO scripts which we deliver with remarkable quality and at a rapid pace.