The cryptocurrency industry is highly valuable. Notwithstanding the values attached to cryptocurrencies, an indisputable fact is that cryptocurrencies are known to be extremely volatile. It is absolutely normal to witness a decrease or increase in the price of cryptocurrencies. Since the industry runs as a decentralized model, it is not unusual to witness a down market.
However, the crypto market situation does not in any way prevent new cryptocurrency projects from launching themselves into the industry. Not even during a down market. Several crypto projects are being introduced through a process known as a token sale. One question which begs for an answer is: Will the launching of a token sale during a down market prove instrumental to the success of new crypto projects?
What is a token sale?
Also known as initial coin offering (ICO), a token sale is majorly used as a method of raising funds for cryptocurrency projects whose products, services, or platforms are in the pipeline. Funds for token sale are generally received through cryptocurrencies such as Bitcoin (BTC), Ether (ETH), and others.
The targeted audience during token sales is majorly crypto investors. These investors are always on the lookout for promising crypto projects which they can invest in that would guarantee them a huge return of investment (ROI).
One point worthy of note is that when investors engage in a token sale, this does not mean they are buying shares or ownership of the upcoming crypto project, rather, it is considered as a form of fundraising for early state crypto projects that are in need of funds to actualize the goals of the project.
The problem unveiled
Quite a number of crypto projects died after their ICO event and the reasons for that are not far-fetched. Some people see the crypto industry as a get-rich-quick scheme, so they come up with blanket projects, organize ICO events that are handled by unapproved personnel, and end up disappearing with the generated funds.
In addition, some of those who run token sales do so in an unprepared state. One of the biggest mistakes they make is running a token sale without having a product, service, or platform dedicated to their tokens. They are not prepared to spend a considerable amount of money to make more.
The crypto industry is run on market dynamics that need to be studied and understood before proceeding with launching a token. Not doing proper research or adequate planning will see your project to ruins is a short time.
Things to consider before launching a token sale
To overcome the crypto market dynamics even in a down market, the following are steps you might want to consider before launching a token sale:
- Product creation: Before running a token sale, it is important you create a product, service, or platform that your token intends to use upon the success of your ICO.
- Legal fortification: Running a token sale means you will have to deal with other people’s money. This is not something you would want to get yourself into without proper legal backing. There must be a documented legal description of the token sale, should anything come up during or after the process.
- Community creation: The success of any project lies in the way people interact with it. Have a community of like-minded individuals, crypto enthusiasts, and investors who would gladly put words out about your project and hype it at all times.
- Whitepaper Documentation: It is important to document the details of your project in a whitepaper or pitch deck. This will be made readily available for investors and individuals who are interested in your offers.
The period of launching a project does not entirely matter. The most important thing is having solid business practices that can stand the test of time. This could be done by getting a dedicated team for your project, marking out strategic project plans and sticking to the plans against all odds, seeking clarity regarding every step you take, conducting extensive market and competitors research, and consistently dedicating yourself to growing the project to the next level possible.
Following the above-listed steps would help you launch a successful token sale and give your project a special position among all others, irrespective of the time it is launched.