Stages and common types of tokensales in 2022
The peculiarity of the cryptocurrency is independence from the control center (for a conventional currency, the role of such a center is usually played by the Central Bank of the state). This means that almost any user can create their own crypt. The initial sale of new coins at the stated price is called a tokensale. There are quite a lot of sites for trading tokens (which are held almost daily), the forms and types of tokensales are also different.
Tokensale is part of the crowdfunding program. This is what they call fundraising on a voluntary basis for a specific purpose. In the case of bringing cryptocurrencies to the market, the purpose of crowdfunding will be to collect investments for the development of the project.
The participation of users in the purchase of coins at the tokensale stage usually has two goals. You can invest at the initial stage by buying coins cheaply, and immediately after the new cryptocurrency enters the market, sell them at a higher price. If investors believe in the success of the new coin, they can choose another way to generate income – long-term investment.
There are usually three stages of tokensale: private, pre-sale and public.
At this stage, a limited number of large investors are allowed to purchase coins. The purchased tokens are blocked, it is impossible to conduct any transactions with them. This type of investment is quite risky, but the price of the crypt is minimal.
This stage is also called presale or PreICO. The circle of token buyers, in comparison with the private stage, is expanding. Coins can be bought by people from a special list (also called the white list).
The purpose of the resale is to conduct an advertising campaign that helps attract the attention of a wide range of potential investors and identify the existing shortcomings of the project.
The last stage of the tokensale, when anyone can buy coins. Tokens begin to be sold on exchanges and the risks associated with their purchase become less.
Any of these steps may be skipped by the decision of the project team.
Common forms of public tokensales
The following forms of tokensales are the most common.
ICO (Initial Coin Offering)
This is the simplest kind of tokensale, which was very popular a few years ago. Tokens are placed on the platform through smart contracts, and each investor buys the amount of coins that he sees fit. The tokensale ends when all coins are redeemed.
ICO can be considered as an analogue of IPO in the initial placement on the stock market of securities. But there are also significant differences. To conduct an IPO, a company must undergo a number of serious checks and obtain permission from regulatory authorities. No permissions are needed to conduct an ICO. Therefore, investments in ICO, compared to IPO, are considered more risky.
IDO (Initial DEX Offering)
This is what tokensales are called, which are held on decentralized exchanges. The advantage of IDO is that after the end of the tokensale, the token is guaranteed to get into the list of coins traded on this exchange.
IEO (Initial Exchange Offering)
The difference from IDO is that tokensales are held on centralized exchanges. The organizers of the project of launching a new cryptocurrency on the market are not engaged in independent fundraising. The exchange takes on the task of attracting investors, but carefully checks the project.
IFO (Initial Farm Offering)
The placement of tokens takes place on the decentralized exchange Pankace Swap. To participate in the tokensale, you must create an account on this exchange.
ITO (Initial Twitter Offering)
A non-standard type of tokensale, when the initial placement of coins takes place using the social network Twitter. To participate, you need to have a Mask Network cryptocurrency wallet.
IGO (Initial Game Offering)
One of the trends in the development of cryptocurrencies in recent years is the combination of the issue of tokens with the gaming industry. As a result of IGO, the initial placement of game tokens takes place. The most famous IGO platform is the Gamefy platform.
SHO (Strong Holders Offering)
A special case of a tokensale from the DAO Maker platform. SHO is organized in such a way that it is profitable for investors not to sell the purchased tokens immediately, but to keep them on the site for a long time.
LBP (Liquidity Bootstrapping Pool)
Tokensale takes place in the form of an auction. With a small demand, the price of the token falls, with a large one, it rises. Tokensale usually lasts several hours and takes place on the Balancer platform.
Thus, there are various forms of holding and types of tokensales. Each of them has its advantages and disadvantages. But it should be borne in mind that it is impossible to make an accurate forecast of the development of the project and such investments are always associated with increased risk.
Published: 6 January, 2022