The golden rule for ICO success is that the price of the token must be higher than the token’s price during the ICO. The development of the right token sale model enables ICOs to receive initial liquidity for the network from investors. Projects attempt to bootstrap the early stages of their network through strong financial incentives that are appealing to investors.

Before starting any token sale activities it is worth asking the following questions:

Why does a project participate in the network? ICOs need to be fair with users and clearly present the information regarding token utility, crypto economics, and the terms of the sale event itself. Instead of promising the community tremendous investment returns, dividends, and high profits, it is worth describing a real use case in the sphere. Lots of projects just present themselves as a funding mechanism without serving a clear purpose for the community.

What is the goal of the token distribution? The objectives of the token sale might vary and depend on the main goals of the developers. Some projects want to distribute tokens widely to ensure that their decentralized application is truly decentralized by relying on secondary markets. In this case, projects don’t want tokens to be distributed among just a few shareholders. This type of distribution is especially common for projects that live shortly after the sale stage.

Sometimes projects let buyers decide the fair market value of their tokens. This way has some drawbacks as buyers usually face difficulties valuing the token properly because of unawareness of the technology.

Another common practice is to allow buyers to participate in the project sale or to allow them to know what percentage of the total supply their purchase represents.

In all of the scenarios mentioned above, projects need to have control over decisions on how many tokens they want to sell or allocate among team members, investors, etc. to run the distribution smoothly and to reach desired results.

How should tokens be distributed among members? There are no strict answers. However, if more than 40% of the token distribution goes to the team members then it is usually a huge red flag for the community. So, dear ICO, please don’t be greedy.