This opens a whole new world of possibilities, but it’s also important to evaluate if ICOs are the best choice for your project.
So, here are the Pros & Cons of ICO Development.
Quick & Easy Fundraising:
ICOs are a quick way to raise funds for your projects. Most of the time, all you need is a good White Paper.Project ownership: The investors invest in your project “idea,” not the project itself. So, you can raise funds while keeping the ownership rights to your projects.
Since everything is done over blockchain, payments and investments are quicker and safer than conventional money transactions.
Although the value of tokens are volatile, popular tokens have the potential to generate high liquidity, making millions in 24 hours.Democratizing Investments: Venture investments have been concentrated in the big cities for a long time, ICOs allow anyone to invest and fundraise, regardless of where you are.
You can showcase and promote your project to a massive audience using websites, forums, groups, etc.
ICOs generate high liquidity, but early liquidity can cause token value to be highly volatile. Legality: Being a decentralized market, ICOs have no regulatory authority. The legality of ICOs may depend on the regulations of your country or area.
Uncertain Token Valuation:
Investors buy tokens based on expected resale profits, not the underlying economic utility.
There is a concern that ICOs could be used to launder money, especially by criminal organizations. This is why it’s always important to employ KYC verifications.Lack of Due Diligence: Investors make their investments based on the White Paper. ICOs may have technological issues or might just be unsuccessful due to sloppy work.
Some people (Whales) buy a whole lot of tokens early on, which means that a large number of tokens are in the same place, affecting the liquidity.
Thanks You For Reading
Looking start an ICO campaign? Congratulations, ICOs are a great fundraising method for crypto start-ups and the possibilities are limitless. But there are certain things you need to consider before embarking on this journey. So, we’ve listed some general things you need to think about before deciding whether the ICO route is the best one for your innovative project.
This is BlockchainX, and here is everything you need to know.