The cryptocurrency market has experienced the most terrific year since its creation. The investors have lost millions of dollars. This market crash has badly affected the most promising cryptocurrencies, like Bitcoin and Ethereum. And the situation has not yet completely recovered.
So, people are now more skeptical about investing in crypto. But surprisingly, this is not the case. Some cryptocurrencies are thriving at the moment. We are about to explain how to use these thriving cryptocurrencies in an ICO.
What is an ICO?
ICO stands for “Initial Coin Offering.” It is a popular method to raise funds for a crypto-based startup. ICOs are similar to traditional IPOs (initial public offerings). When conducting an initial coin offering (ICO), a blockchain-based company creates a specific number of its native digital tokens and sells them to early investors, typically in exchange for other cryptocurrencies or utility.
Conceptually, an ICO creates a win-win situation for both parties involved. Buyers can gain access to the service that the token grants as well as a rise in the token’s price if the platform is successful (a huge IF!). Whereas for business owners, ICOs provide an easy funding model and an innovative way to acquire money.
How Does an ICO Work?
Even though ICO is a relatively new concept, there is a method to follow. The first part of the ICO is the coin structure. There are several possible ways to structure ICOs, including:
Static Supply, Dynamic Price
An ICO with a fixed supply of tokens and a variable funding target implies that the total price per token will depend on the amount of money raised during the ICO.
Dynamic Supply, Static Price
Some ICOs feature a variable token supply but a fixed price, which means that the supply is determined by the amount of investment received.
Static Price, Static Supply
A company can specify a certain financial goal or limit, in which case the total supply of tokens is defined, and each token sold during…
