Checklist for launching an ICO
ICOs or Initial Coin Offerings are currently in trend, despite the severe backlash they have faced for raising funds through dubious means and for equally dubious schemes. Last year as per the estimates, billions were raised in ICO funding. Even an unusually named project, Useless Ethereum Token, managed to raise $200, 000 in contributions.
Funds are raised through a token sale. In simpler terms, a token sale is a tool for investing in digital economies by trading in bitcoins, Ethereum, and other cryptocurrencies. Investors invest in the expectation that the value of their tokens will increase over time.
Coming back to the moot question of ICOs. Though ICOs may seem tantalizing, they are beset with several issues; there are no set rules, and the competition is fierce. A competitor may come up with a similar idea.
So, here’s a checklist that will help you launch your ICO:
· Come up with a gem of an idea. One that has no rival. One that the market needs. Think of ways of integrating cryptocurrency into the project. In case, your project can be run without tokens successfully, investors will be turned off.
· Research on the legalities. Quite recently the Securities and Exchange Commission (SEC) cracked down on many start-ups funded through ICOs. Some of the start-ups shut down were said to be using “misleading marketing” or false claims. Therefore, before the launch of an ICO it is necessary to enlist the help of a lawyer who is well versed with cryptocurrency and legalities around it.
· Creating an ICO token. This is by far the most important process. The pre-requisites for this are:
· Solid distribution plan, incorporating the different stages of the token sale.
· Clear outlining of the number of tokens to be distributed. The number of tokens that would be issued. The number that would be distributed in the team, and the number that would be sold. Under what circumstances would further tokens be issued.
1: Taking the help of a white paper: As the name suggests, the white paper is a technical document covering the A to Z of the project. From market analysis to the development strategy chartered out, and the goals and architecture. It would also include information about the tokens and how it would be distributed. Apart from the aforesaid, the document would also cover legal issues, and information about investors and advisors and so on and so forth.
2: Design a suitable website layout. One that is user-friendly and is suggestive of the nature of work. The website could also incorporate additional features such as a detailed structure of the token sales. The idea hitherto would be to inculcate the fear of missing out.
3: Security is equally important: once the ICO is launched, there would be many prospective investors who would be queuing up to view the website, which could lead to a crash. Likewise, hackers have been known to hack the website address. There have been instances in the past where these hackers have replaced wallet addresses, with the result that investors’ money ended up in the wrong hands.