An ICO, or Initial Coin Offering is a type of digital crowd-funding tool where blockchain-based start-ups mint a certain quantity of their own native digital tokens and offer them to early investors in exchange for other cryptocurrencies like bitcoin or ether.
How do ICOs function?
When a blockchain-based project wants to raise money through an ICO, the first step for the project developer should be to determine how they will structure the coin. The following three are examples:
- Static supply and static price: The developer of the project can set a specific funding goal or limit on the project, which means that each token sold in the ICO will have a preset price, and the total token supply is also fixed.
- Static supply and dynamic price: The project’s creator can choose to sell a fixed number of tokens with a variable funding goal. This means that the price of each token is usually based on how much money was raised in the ICO.
- Dynamic supply and static price:If the developer opts for dynamic token supply but a static price, it means that the amount of funding received determines the supply.
Why should investors and project developers care about ICOs?
An initial coin offering has extensive benefits for investors and project developers. With tonnes of cryptocurrencies hitting the market, entering the
game early on through the token sale of the product can offer additional rewards to investors. From the vantage point of developers, a successful token sale usually sets the precedent for a successful product launch, riding on the pillars of optimal funding and strong investor community support.
ICO dissolves the country’s barriers, with developers enabled to register at any token sale platform to launch an ICO and reach the intended audience globally. The success of cryptocurrency depends a lot on the vision of the developer, which is available as a whitepaper for investors to read as part of the ICO launch. A simple, careful scrutiny of the product’s white paper can help investors avoid the scam. On the other hand, a well-developed product’s white paper, which includes a basic roadmap that lays out a set of concrete goals with a clear and reasonable timeline for achieving them, can help developers raise the necessary funding to push their product.
How do you choose a reliable and trusted token sale manager for all your ICO needs?
A reliable and trusted token sale manager bridges the gap between the project and the investors. If the token sale manager is transparent, regulated, and trusted, like LCX, then both investors and developers can focus on the ICO launches without the fear of hacks and scams.
Here’s why LCX has an edge over the rest: LCX takes care of the minutest details to lead a token launch to success. LCX Token Sale Manager provides a full-service offering, from token generation and investor verification to post-listing support. Our goal is to allow project teams to focus on building products while we handle their token sale.
LCX offers developers a fully compliant token issuance solution combining all legal and technical aspects: from smart contract development to token sale legal documents, registration at the regulator, investor onboarding and KYC, and VIP investor support. Check out more about the LCX token sale manager here!
At LCX, the token is issued on behalf of the developer’s project, and the issuance is done by LCX AG (Liechtenstein) in accordance with the blockchain laws in Liechtenstein and the Trusted Technology Service Provider Act (TVTG). LCX handles the compliance and regulatory needs of the products after thorough verification. As a “token issuer,” LCX is in charge of the registration at the Financial Market Authority. LCX takes care of all legal document requirements, such as the Basic Information, Token Sale Agreement, and Terms of Token Sale, and sends all the necessary files to the regulator. All the projects taken on by LCX go through a thorough and meticulous verification process, and since LCX runs in accordance with Liechtenstein Blockchain laws, this token sale manager is the platform that can be trusted for secure and safe investments in a token sale. Check out the LCX token sale manager here!
Conclusion
Be it the project developers or the investors, a simple tip to ace the ICO game is to avoid herd mentality and always choose a token sale manager platform that is compliant with the regulations and laws, like LCX. LCX gives investors and token project developers more security and transparency by thoroughly background checking both groups. This eliminates the possibility of fraud, hacks, and scams. If you value security, trust LCX with your ICO needs!
