Financing Blockchain Projects The Easy Way
Initial Coin Offering and Initial Dex Offering are ways to raise funds for blockchain projects like NFT series, DAOs, service platforms, metaverses, and more. Interested investors can buy those coins and invest their money. Business owners issue coins that they can buy. Over time, these coins and tokens rise in value as the project succeeds, giving a good return.
You can offer an ICO in any cryptocurrency exchange, open listing platform or through your website. An IDO, on the other hand, is an issue on decentralised exchanges.
Types Of Cryptocurrency
It is easy for anyone to confuse between coins, tokens, security tokens and utility tokens. They might look the same, but they are different.
Coins are those cryptocurrencies that have their native blockchain. For example, Ether is the coin of Ethereum Blockchain.
Tokens are the cryptocurrencies that are developed on another coin’s blockchain. For example, Tether(USDT) is a token that uses Ethereum’s Blockchain.
Tokens Are Further Divided Into Security Tokens And Utility Tokens.
Security Tokens: Cryptocurrency tokens that can be used as a medium of exchange are called security tokens. These tokens can be directly purchased using fiat currency like USD, INR, JPY, etc. They are not native to any one platform. Example - Tether(USDT). Security tokens attract taxes.
Utility Tokens: These tokens are limited to only one platform. For example, players can use a game token for only a specific game or set of games. These tokens are not considered currencies. Instead, they are used as units of accounting. There are no taxes on utility tokens in many countries across the world.
Launching An ICO/IDO
Anyone can raise funds using an ICO or IDO. There are very few regulations on raising funds for a blockchain project worldwide. This process makes it easy for budding entrepreneurs, young and energetic people, that have the potential to do a lot but need money for that.
It might seem complicated to create a cryptocurrency that can raise funds. But, it is a lot easier when you follow the proper way. You can create a cryptocurrency coin or token to raise funds in a few steps.
Plan The Tokenomics.
Tokenomics is how you will set the parameters such as how many coins, who will get the funds, how much share for investors, team, and marketers.
Make The Whitepaper.
A whitepaper is a document that notes down every detail from your ideas to your project plan, tokenomics and your plan to execute the project. Recheck the paper for any inconsistencies or errors.
Start The Development.
This step is the hardest part. Global Vox can help you a great deal in the entire process. With over two decades of experience in IT, we test our solutions to perfection. There are no loopholes or errors, saving you from repeatedly redeploying your smart contract.
Good marketing is the soul of any business. Even the best ideas fail due to a lack of marketing activities. Reach your customers much before you plan to launch your ICO/IDO. Let marketing take its time.
Benefits And Drawbacks
The benefits of issuing ICO/IDO are huge. A lot of factors include the benefits of cryptocurrencies too. Let us take a glance at a few of them.
- Low Regulatory Compliance: Most countries worldwide have very few regulatory compliances on issuing ICO/IDO.
- Easy To Offer: With expert firms like Global Vox, blockchain development is as easy as buying something on Amazon. Just pay and forget.
- No Company Ownership: Unlike an IPO that entitles partial company ownership to investors, ICO and IDO do not guarantee anything but coins and tokens. You still own the legal entity (your company). If you wish, you can give up control via the DAO Model.
Some Disadvantages Are:
- Lack Of Legal Recognition: ICO and IDO still lack legal recognition. Consumers cannot take firms to legal actions and vice versa. But with the worldwide development of DAO, ICO and IDO, these issues might get solved soon.
- Low Success Rate: Recently, a low success rate of ICO and IDO have discouraged many investors. But looking it the other way, people are looking for quality, and you can ensure your success by careful planning.
Director@GlobalVox | Founder - BiG Deal - blockchain based auction platform | Certified crypto and blockchain expert | ICO-IDO consultant