ICOs On A Rollercoaster: What To Expect
The ICO market has changed dramatically since the ‘golden age’ of the Q4 2017 when Bitcoin price has reached its top. Since then, according to TechCrunch, over a thousand cryptocurrencies and tokens have become inactive, or ‘dead’, due to a variety of reasons. Be it a drop in Bitcoin’s value, outright scams, harder regulations, increasing competition, a slew of lawsuits or other reasons, — these days many ICOs struggle to deliver on their promises. This leads to a plunge in investor confidence and a reversal of capital flows.
However, the ICOs still have a lot to offer, and the very idea of an ICO remains promising. Let’s delve into the strategies of successful projects to figure out trends and course of action that is more likely to bring accomplishment.
Private Sale Prevails
With the growing popularity of closed pre-sales, about 30–35% of ICO tokens go to venture funds and angel investors these days. An obvious example of that is the ICO of Telegram company, which went so well that they even decided to cancel its public ICO stage. Kodak Coin followed suit and ran a private pre-sale, raising a total of $10 million.
As TokenData puts it, over 80% of all ICO fundraising this year comes from private sales and pre-sales. There’s something in it to adopt, isn’t it? If you’re planning an ICO, consider developing a pre-sale strategy and a roadshow to collect investments from funds.
Meet STO and DAICO
A traditional ICO model has been disputed a lot recently, and both founders and investors are now shifting to more secure and reliable crowdfunding models. One of them is a Security Token Offering (STO). Unlike utility ICO tokens, STO tokens are backed by a real asset or a share in company revenue. These tokens are meant to function like traditional securities and meet the U.S. Securities and Exchange Commission (SEC) requirements. Venezuelan government’s oil-backed Petro coin makes a good example. There is a belief that security tokens will be the leading force in the nearest future. According to Polymath, STO tokens will prevail on the crypto-market by 2020 with a composed value of $10 trillion.
The other modified fundraising model is a so-called DAICO, which is basically a hybrid of ICO and DAO (Decentralized Autonomous Organization). DAICO was originally suggested by Vitalik Buterin, the founder of Ethereum. This model allows a project to attract investments, but at the same time, it provides investors with certain levers of management, which ensures additional security and reliability.
If you are planning an ICO, consider adding more value to your tokens by making them security tokens. Also, think of walking an extra mile and applying for SEC compliance. The last will allow U.S. investors to participate in your crowdsale, and it means a significant raise in funds.
ICOs are on a rollercoaster now, so be sure to hold on tight and do your best not to drop out of the race. Embrace the trends and take advantage of professional assistance from leading ICO marketing agencies like Priority Token, and your ICO will be a blast!
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When it comes to community management, many ICO founders don’t go further than creating accounts on Telegram, Bitcointalk, Twitter, and Facebook to post news every now and then.