A token sale is a limited sale period of crypto tokens to the public. The most common type of token sale is an Initial Coin Offering (ICO) where investors can purchase units of a new cryptocurrency from the project team before it becomes listed for sale on a crypto exchange. Before running a token sale, some crypto companies sell some tokens to specific investors. This early sale of tokens is called a pre-sale.
In 2017, ICOs were very popular, and many scammers took advantage of them. As a result, some countries do not allow ICOs, while others impose regulations on them.
Token sales are essential since their mother companies gain public attention, which allows their coins to flourish. These sales also help the investors to buy more tokens at a lower price.
How to Make a Successful Token Sale
It is easy to build a startup since raising sums of money for servers and software is over. Some investors are also willing to risk some investment on relative unknowns due to traction records of other tokens. Therefore, an ICO will serve best in raising money for a token.
When preparing to premier a token sale, it is necessary to pay attention to all legal issues. The following steps are essential in making an excellent token sale.
Create a Product
The most basic requirement of a token is creating a product that will use this token. Just like any other investment, you will need money to start this process.
Make a Token
The next step is to make a token on an excellent Smart Chain ecosystem like Ethereum. These tokens should represent the fungible products of your company.
Get Legal Advice
Legal advice is necessary to evade issues that arise from the mismanagement of public funds. Do not ignore this step at all costs.
Draft a White Paper
Drafting a whitepaper is necessary since they describe the financial plans of a token. An influential white paper will market the token well.
Build a Community
A community is vital in the initial days of a token sale. This community should have proper communication between its participants.
Launch the Token on Exchanges
After completing all other steps, reach out to potential exchanges that will launch the token. After fruitful discussions with exchanges, make official announcements of the release schedule.
The Future of Token Sales
Since startups have trouble in raising equity capital, they will now turn to token sales. Using token sales is a good move since it will help the world to embrace cryptocurrencies. Token sales have significant potential and may cause massive shake-ups in the next few years.
It is just the beginning of a new era of a unique fundraising model with many winners and losers. Now it is up to dreamers to use this method for raising cash for new ventures.