The world of cryptocurrency is a mixed uncertainty in its two-way approach. One way it seems to be commendable and optimistic for the developers as well as investors, in terms of speculating and arguing about the future of digital currencies. On the other way, many cases of scams and fraudulent schemes have badly affected the investors closely. It raises a question mark on the credibility of cryptocurrency. Initial Coin Offering (ICO) is one such example of dichotomy here. There are projects for every blockchain-based projects like Ethereum and NEO, which have made the best use of successful ICOs for the beginning of the new platforms and products. But there are also some ICO that have been overhyped much or proved to be worst. Today, we will be highlighting those key factors that are behind the success of ICO.
What Do You Understand By ICO?
Before moving ahead to know about the key factors, behind the success of ICO, let us understand the concept of ICO. The full form of ICO is Initial Coin Offerings. If you have been abreast with Initial coin offering news, it is a way of raising capital for all blockchain projects to sell cryptocurrency. It is used by newer projects who want to sell fresh new crypto coins in exchange for Bitcoin and other digital currencies. It may remind you of the Initial Public Offering (IPO), but it is different from the latter, as ICO is unregulated and gives least or no right to investors. But why would anyone consider ICO for buying or launching? Well, there is a valid reason for this:
- An investor can enjoy the benefits by obtaining new cryptocurrency at low cost and having good returns on the investments.
- ICO coins bring additional benefits, including privileged access to products and services and revenue distribution.
- It is supportive of teams and projects of your choice.
Risks Involved In ICO
Apart from the advantages, ICO comes with risks too. Some of the major risks which token buyers may face are:
- An inexperienced team, which is unsure about the project success.
- There is no guarantee of returns and no regulatory security.
- The risk of the project is vulnerable to scams or fraudulent schemes.
Key Fundamentals Which Are Behind The Success Of ICO
After getting to know much about ICO concept and the factors which indicate benefits and risks involved in it, now, let us switch our attention to understand the key fundamentals that are behind the success of ICO.
Beginning with our first key factor is the whitepaper. While working on any given project, it is better to have a thorough study and analysis of your whitepaper. The whitepaper is a kind of document which are found on the project’s website. The purpose of it is to outline the strategies and aims at every detail levels. It is a must step to analyze the doubtful shortcomings of the project.
An appealing whitepaper may not seem to guarantee success. Still, it is much better than an incomplete and incorrect whitepaper, which may become the reason for the failure of your project. Be very sure enough while preparing a whitepaper for the launch of your ICO, as investors will crosscheck every minute details. It is better to take time to make your whitepaper presentable and appealing.
Another very key factor behind the success of ICO is the teamwork. Here it would be best if you spent the time to research on the team of individuals which are associated with the project. Many times it has been noticed that companies put misleading information about the people as the team members, which is not true when it comes to reality. Although it is very tough to track such things, if you are an investor, then you need to be extra cautious while approaching a situation carefully.
Use Of Token For Funding Project
For funding the project, ICO makes the best use of tokens. Investors buy these tokens which are either created specially or allotted for the project. They become very hopeful with the increase in the token value, which depends on the successful launch of their project. Before making an investment in ICO, you need to understand about how tokens are owned and distributed.
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There are always some key factors behind the growth of any technology. Similarly, these key factors also have a major role in the success of ICO. So now you must have got a clear understanding of the concept of ICO and the factors which makes it successful. The whitepaper is the primary component for ICO. It makes you study thoroughly and analyzing the grey areas, which can badly impact your project. It is advisable to crosscheck your whitepaper as it will be reviewed very deeply by the investors. So don’t let them pointing any error which may go against in launching of your project. Take as much time you want to study it and then come prepared with confidence after you are done with final revision.