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 crypto world having significant barriers to entering into an early-stage investment, crowdfunding through cryptocurrencies is 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, ICO platform rose as the dominant method of crypto crowdfunding.
What Is Initial Coin Offering?
In the world of digital currencies, an Initial Coin Offering crowdfunding (ICO) has shown multiple parallels resembling an IPO for a stock. Any company looking to raise funds, or create a new coin, application or service launches an ICO crowdfunding 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 possible by releasing virtual currencies to curious parties in the form of new digital tokens.
The ultimate hope of an ICO crowdfunding is that your primary business idea will receive extensive publicity, buy-ins along with use. Eventually, this increased circulation leads to a 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, Creating an ICO crowdfunding platform does not result in stake ownership in the company. These distributed tokens might come with a 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 ICO.
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. Eventually, 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 number of funds obtained will fix the overall supply.
Why ICO Crowdfunding is Mostly Prefer For Startups?
A cryptocurrency-related project normally creates a whitepaper and structures its ICO crowdfunding platform. It is used to hold the potential investors through a new website dedicated to the token. Besides, the benefits of initial coin offering crowdfunding allow the frontrunners of the project to use their white paper for explaining the crucial information related to the ICO platform. So, the project lets out the white paper as a part of its ICO crowdfunding campaign which 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 common for investors to pay using virtual currencies like Bitcoin. When the raised money meets the project requirements shortly, then the project will spend the raised fund on development. In case the money raised in an ICO crowdfunding is less, then the investors may receive all their money back. Moreover, the newly distributed tokens resemble the shares of stock sold to investors during an IPO. If you are to get a grip on the entirety of ICO crowdfunding platform working then you ought to completely understand the subsidiary benefits of ICO platform also.
Benefits of Initial Coin Offering (ICO)
ICO platform come with several extensive benefits that can be beneficial for business owners who are looking to start or grow fresh opportunities. Below given are some of the exclusive benefits of initial coin offering as a crowdfunding campaign:
- Anyone can buy tokens: Token launches through big-time initial public offerings differ from conventional equity sales. Contrarily, tokens sell at an ICO can be sold to anyone across the world. The purchases carried out are mostly anonymous.
- Tokens are sold globally: An ICO crowdfunding campaign provides the chance for investors 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 sale, then they automatically gain some sort of value. This value will be sitting freely within a global marketplace. This is contradict by the conventional IPO, where it can take decades in some cases for investments. Token economy liquidity enables shareholders to take part in new ICOs with the same amount of funds.
- Lesser entry barrier: The positive entities of Initial Coin Offering can raise capital funds from wherever they are located and they can get it from whoever they want. This ultimately eradicates the barrier to 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 opportunity for potential investors.
These are the benefits of Initial Coin Offering that come with a successful ICO campaign. Apart from these benefits, it would be better if you search for 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 ICO ever to take place. Ethereum is much more than just a virtual currency. It is a blockchain technology 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 and provides several tools for businesses that operate seamlessly on the blockchain.
- NXT: This was formerly known as Antshares and has gone through a couple of token sales rounds. Microsoft connected this service and it started its first ICO. NXT’s whitepaper has a detailed explanation of substantial ROI coin offerings.
Now that you may be clear about the benefits of initial coin offering ICOs of all time. And it would be only fair to know about their first big step towards a Fundraising campaign. In order for their fundraising to be successful, all the above-mentioned entities have chosen the best ICO scores.
The Bottom Line
In order to run a successful ICO crowdfunding campaign, it is very crucial to carefully evaluate the developing group. 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.
Our clients across the globe hail us as one of the best ICO development companies. Thanks to our group of professional and technically sound development personnel who have gotten it started.. Over the years, we have developed some stellar ICO scripts which we deliver with remarkable quality and at a rapid pace.
