Tokensales of cryptocurrencies: what is and where are the

In addition to the well-known cryptocurrencies (bitcoin, ethereum), several dozen new types of crypts and related blockchains appear on the market every week. With their help, young companies often try to attract capital for their development.

One of the ways to finance cryptocurrency projects is Token Sale, as the primary implementation of pre-issued tokens. The cryptocurrency market is developing very quickly. Since 2017, new ways of organizing the cryptocurrency market have appeared, and tokensales are increasingly becoming closed.

What is tokensale

Tokensale is the release and sale of cryptocurrencies to raise funds for a project.

The essence of the tokensale can be described as follows:

  • project developers start fundraising by selling a certain number of tokens;
  • if the project is successful, the tokens grow in price and investors make a profit.

A similar result can be achieved by the initial placement of securities (shares, bonds) on the stock market (IPO). But with the help of tokensale, or the initial placement of tokens (ICO), it is easier to attract the necessary funds.

ICO (Initial Coin Offering, “initial coin offering”) of tokens has certain advantages over IPO (Initial Public Offering, “initial public offering”) stocks and bonds, in particular, faster registration. If you need to pass complex checks before issuing shares, there are no regulatory authorities in the ICO area yet.

This lack of control has not only a positive, but also a negative effect. Investors’ investments are not protected by anything, and the risk of losing them is quite large.

One of the most successful ICO projects is ethereum, a cryptocurrency developed by Russian-born Canadian programmer Vitaly Butorin (known in the crypto community as Vitalik Butorin). Investors who invested in the ICO for the release of Ethereum received a huge profit. The yield of Ethereum exceeded 9000%.

Advantages of investing in tokensales

Investing in tokens has the following advantages:

  • the launch of tokens is not regulated by law, so anyone can buy and sell them almost without restrictions;
  • speed and efficiency for all parties, including investors;
  • low entry threshold.

But possible risks should also be taken into account.

The best sites where tokensales are held

Cryptocurrency exchanges are well suited for tokensale. These are analogs of stock exchanges where transactions with cryptocurrency are carried out. Let’s look at examples of the most famous cryptocurrency exchanges.

Tokensale on Coinlist

A large crypto exchange from the USA, focused on conducting ICOs and attracting investments in cryptocurrency. The ICO section on this site is carefully thought out. To avoid bots, account verification has been introduced on the site.

The exchange operates 24/7. In addition to the ICO, other operations are carried out on the site, for example, currency exchange. Official website

Tokensale for Binance

Binance is one of the largest cryptocurrency exchanges, which is known all over the world. In addition to traditional trading operations, the launch of the initial placement of tokens is available here. You can invest using not only cryptocurrency, but also fiat money. Official website

Since January 2020, the exchange has been launching monthly fundraising for new blockchain-related projects. Exchange participants undergo mandatory certification.

Risks of investing in tokensales

Any investment is always associated with risk. Investments in cryptocurrencies have additional risk factors associated with the fact that cryptomonets are not legally a means of money and their circulation is not regulated by law. The legal status of the ICO is not defined in any country. Such projects are based only on the trust of investors.

Therefore, the field of cryptocurrency investments always attracts a large number of scammers. Having raised money for the project, the organizers can disappear with them. Such projects are called scam projects.

But even if the organizers act in good faith, you can lose the money invested in the event of a project failure. It will be impossible to compensate for the loss of funds. All investors in ICO should understand this.

Cryptocurrency is a very volatile asset, the value of which can vary greatly even during the day. It is very difficult to assess the real value and profitability of an ICO project. You need to pay special attention to projects whose organizers are unknown, and their social media accounts are fake.

Why the initial sale of cryptocurrencies becomes closed

In recent years, the public sale of tokens has given way to a private (closed) one.

Until 2017, the sale of tokens was public (open). To attract investors, the organizers of the IPO widely used a system of discounts for those who invested in the project at early stages (presales). At the same time, many of the investors bought tokens only for the purpose of quick resale.

To prevent such behavior of investors, private (closed) sales appeared with a period of restrictions during which the purchased tokens cannot be sold. Such financing is similar to venture capital, but investors do not acquire shares in the company and do not receive dividends. Now closed token sales are becoming more and more popular.

Published: 6 October, 2021

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