Learn what an ICO is and its popular types while gaining useful insights into the essentials to launching a successful ICO in 11 steps.
What is ICO & Its types?
In the crypto world, an ICO full form for Initial Coin Offering - is the equivalent of an IPO. The only difference is that instead of equity in the company, investors receive digital tokens. Due to this, ICOs are also sometimes referred to as token offerings and token crowdfunding.
There are two types of initial coin offerings: private and public. Here's how they are different:
1. Private ICO:
A private ICO is true to its name since only a limited number of investors are allowed to participate. Participation is restricted to a few approved high-net-worth individuals or financial institutions.
2. Public ICO:
A public ICO is one in which the general public may participate, and almost everyone can invest. In contrast to private offerings, public ICOs are less popular due to regulatory concerns.
How does ICO work?
As opposed to stocks, tokens do not provide equity in a company. When investors purchase assets from your initial coin offering, they gain access to a service that your company developed.
With ICO token development, you use blockchain platforms such as Ethereum, ensuring that minimal code changes must be made in order to develop ICO tokens.
Tokens can be traded for cryptocurrencies or exchanged for fiat currency once an ICO has been established.
Due to its decentralized nature, a token sale is a relatively new process and has many tricky nuances. An initial coin offering can only be successfully managed with a carefully thought-out strategy.
A contributor can contribute "X" amount of an existing token and receive "Y" amount of a new token (at a set conversion rate) at a date set by the issuer.
Top 11 essenitals to launching a successful ICO
1. Team and advisory structure of an ICO:
To launch a successful ICO, you must set up a team of professionals who are knowledgeable about crypto and ICO procedures. There is no need to hire a large team for your project. A mid-sized ICO project can be handled well by a team of 6 or 9. It is important to hire ICO developers and advisors who are proficient in ICO development in order to balance the composition of your team. Blockchain and smart contracts are essential for your ICO so make sure the developers you get on board have a good hands-on experience with it.
2. Creation of an ICO development roadmap:
Before you launch an ICO, you should develop a thorough roadmap that outlines your plans for taking your project forward and how the investors and community will benefit in the long
Keep the roadmap as simple and transparent as possible, it should not include any complex technical details.
3. Analysis and planning of the market:
Before you begin with the final ICO, you should analyze the market and conduct research. Successful ICOs cannot be achieved without adequate facts and data. Invest more time in the market trends, monitor trending prices, what investors are looking for, what makes community members happy, and once you have collected these data, verify that your ICO meets the requirements.
4. Drafting whitepapers:
Another crucial step to consider before launching your ICO. The whitepaper answers all questions regarding the ICO development services you will deliver and provides accurate information regarding:
1. An issue that users face
2. What you offer as a product and solution
3. Details about an ICO, including tokens
4. Commercial applications for tokens
5. Your project's technical aspects
6. Timeline and roadmap for the product
7. Skills and experience of your team and company
8. Your token's future and features
9. Funding plan
10. Stages of token price
11. Currently active users (If you have any)
5. An ICO website:
A website is like a hood of your project. You need to ensure that you get your hands on an easy to navigate and aesthetically pleasing website that is combined with clear content. Moreover, it might be a good idea to hire an ICO web development company to ensure that your ICO website is up to the mark.
6. Community Support for ICOs and promotion of the ICO:
Marketing your ICO and cryptocurrency through all available channels is key to generating interest. A presence on Reddit and BitcoinTalk is at least as important as social media accounts.
It's also important to interview and attend conferences. Besides pitching your ICO in these conferences to industry veterans, you'll also get a chance to connect with special advisors that might prove beneficial for your ICO.
After all, a good community support will help you spread the word for ICO as quick as fire in the forest.
7. The choice of a token sales model:
Next, create an ICO token and choose its sale model. Here are some of the main ones.
Soft Caps -
A soft cap is the minimum amount of funds that an ICO needs to raise in order to be successful. Contributors need to request their money back if ICOs fail to reach their soft caps.
Hard Caps -
A hard cap is the maximum amount of funds that can be raised. After reaching the hard cap, an ICO ends.
Uncapped with Fixed Rate -
There is no limit to the duration of an ICO and the ratio of tokens to cryptocurrency is fixed. Contributors who contribute early receive a discount and there is no limit to the number of contributors or the amount raised.
Capped with Fixed Rate -
The duration of an ICO is limited to several months and the token-to-cryptocurrency exchange ratio is fixed. Tokens will be offered on a first-come, first-served basis and there are a limited number of tokens available for sale.
8. Designing smart contracts:
Setting up smart contracts that allows easy transfer and Buying-selling of tokens is a must.
There is no specific requirement for the type of token used in blockchain networks to be fungible or nonfungible, it can be any. A thorough audit is essential to ensure the security and functionality of a smart contract. Furthermore, you can also take help from your community or audience by offering bounties for reporting bugs.
9. Get Your Digital Wallet Set Up:
In order to receive and store the ICO assets, the first prerequisite is developing a cryptocurrency wallet. If you don't have adequate resources to develop and set a wallet by yourself, it is advisable to hire a software development company that has experience in the development of ICOs.
10. Post-sale for ICOs:
Well, we are done with the ICO sale by now. This step calls for post-sale. By the time your tokens or coins are live on platforms and investors would have started engaging with them.
Once your ICO development is complete, it is time to prove you stayed by your word. Maintaining promises to contributors and the community is your responsibility after the sale. Make sure you keep in touch with the audience that contributed to the creation of your ICO. As a result of their loyalty, your company will benefit in the future.
11. Exchange platform listing:
The listing of your tokens or coins on cryptocurrency exchange platforms is an essential part of ICO development and marketing. Assets can be exchanged based on their market value.
It is crucial to choose a popular and reliable platform for smooth trading. Most cryptocurrency exchanges limit the number of assets that can be traded. However, some allow crypto-to-fiat currency trading.
If you are planning to launch an ICO project, make sure you check these points. However, if you still encounter some difficulty taking the project to end, do not hesitate to contact us. We at AIM2DOOR specialize in helping companies develop and execute their ICO strategies.
Getting your first time on the ladder of success right will be no problem for our team of experts.