The crypto market topped out at close to $3 trillion last year. Now, as the long-overdue market correction seems to end, it’s no wonder that people are looking to cash in on the action. It’s time for ICOs, fellas!
ICOs can be done with a very lean team. While there have been ICO initiatives probably started by a single individual that raised funds in the hundreds of thousands, a typical project will require expertise, a significant amount of time and a committed staff to generate large sums. However, there’s no need to panic as certain ICO development companies specialize in sorting out these hassle for you.
But what is an ICO, and how to go about it? In short, ICOs (Initial Coin Offering) are crypto equivalents of IPOs (Initial Public Offering). But unlike IPOs, investors are issued cryptocurrency tokens rather than shares in an ICO.
ICO is a great way for an aspiring crypto company to raise funds with a token, app, or any other blockchain services . These tokens have a certain value that is directly tied to the company’s product or service. So, without further ado, let’s look at how to go about an ICO.
Come up with an idea:
As the saying goes, “everything begins with an idea”. In order to launch a successful project, you must tap into the current and future market needs. Perhaps, offer a solution that competitors have overlooked or missed entirely. Achieving this differentiator is critical for your ICO’s success and takes know-how of the problem you’re solving. So, it is vital to formulate an idea based on a target audience and what they will expect in exchange for their investment.
Your project will have its own coin if it receives money through an ICO campaign. However, the thing to remember is that there are over 10,000 cryptocurrencies currently active. Therefore, a token will need to generate a high demand if it's going to compete in the fast-paced crypto world. To do that, one must consider how to effectively incorporate a cryptocurrency into a project so that it becomes a crucial component of the result.
Study the competition:
What is the competition’s offering? Let us assume for a moment that it's just another project providing services identical to yours. In other words, you are competing with everyone else as you're vying for the investors' money. Yes, practically each and every ICO that is taking place around the same time as your project has the same goal. Hence, knowing your competition could pay off, literally.
Maneuvering through the legalities:
Initial Coin Offerings are legal, regulated, or vulnerable to future regulation in the majority of countries across the globe.
In the US, residents must notify the Internal Revenue Service (IRS) of any income they receive and foreign assets they own. Additionally, the US Security and Exchange Commission (SEC) is bringing a legal action against ICOs for failing to adhere to its tough Know-Your-Customer guidelines. Due to this, an increasingly large number of companies, like Goldmint, Datum, Monaco Visa, and many others, have explicitly prohibited US individuals from purchasing their tokens.
The lesson here, is that you must become familiar with the present cryptocurrency legislation and closely monitor any upcoming changes. Don't breach the law—this obviously goes without saying—nevertheless, it needs to be said. It might be a good idea to work with a company that has knowledge of cryptocurrencies and ICO legislation.
But keep in mind that even if you're not breaching any laws, legal aspects that don’t seem clear to investors could lead to the crypto community calling your project a hoax. Your ICO is guaranteed to fail if that occurs. Hence, the right legal partner is vital to ensure that everything remains above board.
In addition to abiding by all applicable laws and regulations, you also need to be absolutely open and honest about how you're going to handle the investment. Spending, taxes, fiat withdrawals, and other project-related financial considerations must all be carefully examined.
Creating the token:
Look at the project this way, its entire body is supported by the technical architecture, which serves as its skeleton. Blockchain technology and the token itself are the blood vessels and organs that enable the entire body to function normally.
For various ICOs, different structures are effective. For instance, in 2013, NXT raised over $16,000 in bitcoin donations to an anonymous wallet via the BitcoinTalk forum. NXT's ICO still ranks among the most successful ICOs in terms of Returns on Investment after all these years.
On the other hand, Telegram raised over $850 million during a somewhat covert pre-sale, and it appears that they organized a second pre-sale in an effort to double the number of investments made even before the real ICO takes place.
The actual distribution of the tokens must then be spelled out in detail, and that’s where an ICO development company helps. You should also make a decision in advance regarding the total number of tokens to be issued, the number to be distributed among your team, and the number of tokens to be sold at each stage. Finally, choose the situation in which you will issue more tokens.
With the right blockchain, creating the token itself is a fairly simple operation. However, the customization of some crowd sale logic for your tokens, could pose a challenge and require expertise. So, if you're not particularly tech-savvy, it’s good to think about hiring an ICO development company to accomplish that for you.
Write a white paper:
A revolution was born in 2008 with the release of a white paper titled "Bitcoin: A Peer-to-Peer Electronic Cash System" and the rest is history. Since then, the importance of a white paper in the success of a cryptocurrency has been undeniable.
A white paper covers the details of your entire project. It would typically contain details of everything, including market research, development strategy, architecture, details about the token, legalities, a description of your team, early investors, and much more.
Obviously, not every potential investor will carefully read through a thorough technical explanation of your product. Maybe a hand full of people will actually read it all. However, you must satisfy those individuals with the white paper because they have the potential to influence your ICO.
These people are actually blockchain enthusiasts who are highly regarded and esteemed members of the community given their extensive knowledge and experience in technical matters. They are influential figures with tens of thousands of followers. If your idea has some obvious issues, but you're undertaking a significant PR campaign, those folks won't miss their chance to point them out.
By this point, you have taken care of everything. The coin is built, a white paper has been authored, a committed team established, and the ICO campaign conforms with all relevant laws and regulations. This is where promoting the ICO comes in. And the right marketing can make your ICO dream a reality.
If you want your campaign to be successful, you'll need to publicize it aggressively and get the word out to as many people as you can in the neighborhood. However, it is crucial that you and your marketing team exercise extreme caution with each and every article, post, and response. Hence an ICO marketing company is the way to go.
Get the ICO listed:
Of course, perfecting your product, realizing your entrepreneurial dreams, and improving the cryptocurrency community through the development and integration of your project are all fantastic goals. Your staff and your investors, though, will be expecting something different in the interim: that the initiative will turn a profit.
For that to happen, your token must be valued, and in high demand. Hence, it needs to be listed on a cryptocurrency exchange. Each exchange has its own standards when it comes to token listings, but you shouldn't have any trouble getting it listed if your project offers something distinctive and is backed by a knowledgeable ICO development company.
All in all, an ICO launch has the potential to be revolutionary if it’s done right. It might seem like a lot of pressure to cover all the bases, however there is a simple solution. Certain ICO development companies operate as a one-stop- solution for all your ICO needs. They take care of everything from creating the cryptocurrency token to marketing and launching the ICO. All you have to do is dream it up, and they will handle the rest. So, go ahead, bring your dream to life.