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What is ICO? We provide a simple breakdown of ICO in this ADN Coin blog to help you learn ICO and grasp the ICO basics.

Initial Coin Offerings (ICOs) are a relatively new phenomenon that has quickly become a dominant topic of discussion within the blockchain community. In line with this, many people in the crypto community agree that ICOs is the long-awaited solution for non-profit organizations to gather funds, especially if they are eyeing to build ground-breaking projects.

ADN is a blockchain-based platform designed to secure ICO investments. Before we delve deeper into the technicalities, it would be better to tackle the basics first. In this blog, we aim to enlighten our readers regarding the things they need to know about ICOs.

The Idea Behind ICO

ICOs provide a financial campaign that allows the collection of funds similar to crowdfunding. Running through blockchain, this advanced technology ensures that ICOs are not regulated by any central authority. Tokens for new projects are sold during the ICO to collect funds vital for the company’s development. During the ICO process, if the money raised does not meet the minimum funds required by the company, the money is returned to the investors and the ICO is deemed to be unsuccessful. Otherwise, if the requirements are met within the specified time-frame, the money raised will sustain the project’s advancement.

Who Creates ICO?

ICOs are created by cryptocurrency startups that want to receive financial assistance and moral support within the crypto industry. By conducting ICOs, the companies can gather adequate funds to fulfill their purposeful projects. ICO builds a path that enables these businesses to collect money by avoiding regulated channels and financial sector restrictions.

With sufficient knowledge, skill, and experience, capable individuals and starting firms can develop a token and write a whitepaper that describes its use cases. At present, even blockchain-based ventures tend to catch the attention of mainstream media, and ICO is one convenient way for these projects to get enough funding to proceed with their developments.

How Does an ICO Work?

Startups that want to get involved in cryptocurrencies can use ICO to gather funding. Taking ERC-20 tokens as an example, a company may use Ethereum-based smart contracts to create and issue their own digital tokens. Once the startup founders have created their tokens, they can now start the ICO process of convincing investors to participate in their ICO.

One vital aspect that could affect an ICO’s success is the whitepaper. The whitepaper should support the project details of investment, goals and vision, and a roadmap that gives an overview schedule of what is expected to be attained by that certain project. If the ICO gathers sufficient funding, the money will be used to launch and operate the project.

The amount of time required to complete the token crowd sale will determine the length of the ICO campaign. This usually ranges from 3 days to 1 month, sometimes even more, as companies need to exhaust their token sales to achieve their set amount of minimum capitalization. If the ICO will not meet the funding requirements after a specific period of time, the ICO will be considered unsuccessful. To gain more credibility, founders may also create a website that provides more information about the team involved, explanation regarding the value proposition of the project, and anything compelling that will persuade the public that this project is likely to succeed.

Should You Invest in ICO?

Although there are many successful and profitable ICOs that were held over the years, the risk of fraud remains high due to little-to-no regulation on this activity.

Despite the fact that some ICO’s suffer from malicious fraud attacks, several ICOs have moved forward with success and greater momentum. If you think you can make a success on a promising ICO, then go for it. Just make sure to do your homework beforehand. Cryptocurrency is a relatively high-risk and high-reward investment, and ICOs are no different. On our previous blog, we have shared five tips to help you determine if you should invest or not.

The Future of ICO

With ADN’s secure blockchain technology that intends to safeguard investments and ICO participants, users are protected from malicious hackers and scams. ADN is committed to building a platform that could encourage both new and established companies to conduct their ICOs, as well as convince investors as backers of these promising ICO projects.

Another breakthrough technology that ADN has to offer in safeguarding the investments of ICO participants is the ICO Wallet wherein funds will remain unlocked to the ICO-holding companies unless approved by the investors.

As ADN progresses, it will preserve and protect the interests of ICO investors through its technology, diligently working on its mainnet, as well as the ICO Wallet. We are relentlessly doing this to secure a better tomorrow, for both investors and companies alike.

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