In the world of cryptocurrencies, the Initial Coin Offering (ICO) has generated the most excitement and expectation. Since 2015, crypto investors have been constantly monitoring the ICO development field in search of the next big 10x or 100x opportunity. Between August 2015 and December 2017, the ICO market expanded to historic proportions. However, further studies indicated that over half of the ICOs held in 2017 and 2018 failed to generate even a single dollar because they sought to ride the euphoria and launched without proper planning.
What Kinds of Initial Coin Offerings Are There?
Once you’ve decided to participate in a new ICO, you’ll need to understand the various sorts of Initial Coin Offerings. There are currently two alternatives.
Private Initial Coin Offerings
A Private Initial Coin Offering, as the name suggests, entails engaging a small number of investors to raise funds. You may also choose the minimum investment necessary to participate in your ICO.
Public Initial Coin Offerings
Another type of ICO is a public initial coin offering, which is akin to an IPO. It is known as crowdsourcing, and it aims to attract institutional investors as well as the general public. However, because of regulatory constraints, private ICOs are far more viable than public ICOs.
How Does an Initial Coin Offering Work?
The basic premise of ICO activity is to raise funds by issuing and distributing tokens using blockchain technology. It entails financial contributions from investors in exchange for the project’s cryptocurrencies. Obviously, their interests must be consistent with the overall ICO plan.
Tokens may be sold for other cryptocurrencies like bitcoin or fiat money like US dollars or euros when you launch an Initial Coin Offering.
Factors to Determine Ico Success
According to a study of 630 successful ICOs conducted between 2015 and 2017, an ICO is likely to be successful if it discloses enough information to its investors, has a pre-ICO GitHub repository, a presale is organized, avoids offering bonus schemes, has shorter token sale durations, and has a public team. Despite this, some ICOs failed because they failed to perform the ICO in compliance with the ICO guidelines outlined below:
RULE 1– ICO Research, Planning, and Collaboration
Before you begin developing an Initial Coin Offering, you must first assess and comprehend market demand. Your team’s advisers, IT developers, and business developers will construct the business model based on this. Once the concept has been developed, it is critical to share it with specialists to ensure that it is realistic and to work on the comments offered.
Once the business strategy is in place, you must collaborate with engineers to turn it into an actionable roadmap. When breaking it down, keep the following points in mind:
Your crew should be large and qualified enough to produce on time.
You must have sufficient funds to cover the costs of the ICO development phases.
Investors pay close attention to how frequently your team commits code to open-source repositories like GitHub. As a result, it is critical to have a well-thought-out and feasible plan in place.
RULE 2 – Whitepaper Distribution
Before investing in an ICO, the first thing an investor looks for is the whitepaper. During the initial stage of ICO development, make sure you have a 25–30-page whitepaper available that answers the following questions for investors:
Problems your initiative attempting to address?
What is the magnitude of the market for the problem that your initiative is addressing?
Any solutions provided by your project?
What are your project’s technical and non-technical aspects?
Timeline and plan for the project
Details on the team and advisors
Tokenomics in depth
It is preferable to have a project website where your whitepaper may be found. This offers investors some assurance about your project.
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RULE 3 – Use the Proper Tokenomics
This is the most difficult aspect of Initial Coin Development. Some of the most crucial things to remember are:
Choose the Caps
The minimum and maximum sums that your ICO must raise before it is terminated are defined as soft and hard caps. You must establish these caps before beginning the ICO offering, and after they are met, you may include them in the ICO success. You can also select secret caps, in which investors will not know the precise capitalization until the end of the ICO sale and allocation.
Models with or Without Caps
You must determine whether to limit the number of ICO participants or the amount raised during the ICO. It might be a first-come, first-served ICO with no cap on the number of tokens.
Ico Auction in the Netherlands
You may use a smart contract to determine token pricing based on bids received. The smart contract is built in such a manner that the highest bids are prioritized, and if the caps are met, the sale terminates.
RULE 4 – Smart Contract Creation
To ensure the fairness of the ICO offering, a smart contract must be in place that allows investors to handle, transfer, and sell tokens. This smart contract must be linked to your token wallet and must be audited both internally and externally.
RULE 5 – Create a Digital Wallet
Before you begin the ICO offering, you must have your own digital wallet.
RULE 6 – Post-sale Inspection
Once the ICO offering is complete, make sure you keep track of post-sale activity. This implies that you should have an explorer that informs investors about the vesting durations and timetables. Once the lock-in period is finished, it must provide investors with 24-hour trading volumes and additional information.
RULE 7– Exchange Listing
Getting your coins listed on tier 1 and tier 2 exchanges is critical for improving token circulation. If there are fewer listings or fewer trading pairs, ICO investors may struggle to trade the tokens, which is not a good indicator.
Suffescom Solutions has years of ICO development experience to ensure all needed standards are strictly followed. We provide complete ICO development services, from token and smart contract construction to white paper writing and marketing, to ensure the success of your ICO.