Profitable Crypto Crowdfunding Ideas 2021
The Crypto market is one of the popular financial markets that is popularising its name through the highest returns. It is a bitter truth that all the financial markets are volatile in the terms of price. But whereas with the crypto market goes one step ahead of all when it comes to volatility. The Crypto market offers a huge space for entrepreneurs to make money by opting for various businesses offered by crypto. Yes, only the crypto market offers different business opportunities; no other financial market is offering such a variety of business options like how crypto provides.
Among such business options crowdfunding is also considered as one of the popular businesses. Apart from business, it is said to be a successful money generating platform for your potential business idea. This platform has helped many startup people, budding entrepreneurs, and other innovative business ideas to transform into a successful business. That is why entrepreneurs choose crypto crowdfunding rather than reaching out to venture capitalists or other business angels for funding their business ideas.
Crypto crowdfunding is nothing but it consists of three ways. The entire package of those three is called crypto crowdfunding.
What are those three methods of crypto crowdfunding?
Those three methods are:
- Initial Coin Offering (ICO)
- Security Token Offering (STO)
- Initial Exchange Offering (IEO)
This might sound new for the beginners and the newbies. Nothing to panic about. I will explain all three with the process carried out during each and every approach. At last, I will reveal the best method for fundraising. To know the reason for choosing the best one, you should read the entire blog for a clear understanding.
With delays let us jump into the first one,
Initial Coin Offering (ICO)
This may sound similar to IPO (Initial Public Offering) that is done in the share market before a share goes public. Similar to that, ICO is done in the crypto market for making a token to go public. Few processes have to be carried before entering into ICO. First thing first, make sure your country supports and legally permits everyone to do crypto trade and crypto-related businesses. If yes, proceed further; if no, then just know this entire process and do when your country says yes to crypto.
The second point is, you should have an innovative business idea. This will drive your entire ICO project on the right path. If you have positive answers for all these two points, then reach out to the trusted token development company in the crypto market. They will create a crypto token for your project. In addition to that, they will create a whitepaper that says about your project idea, the scope of your project, etc. This will help the other investors and traders to know about your token and the project behind the token. After creating a whitepaper for your token, with the help of an ICO website your token will undergo initial sale for listing in the crypto exchanges.
But people’s participation in ICO is very less when compared to the other crypto crowdfunding processes. Because the picture that had been created upon ICO was bad. Many people had lost their investment amount after investing in ICO. When it comes to ICO, it is not one hundred percent sure that all the ICO investors will list their tokens in the exchange. Once they get a good amount of profit during the initial sale they may withdraw the ICO process before completing it. By withdrawing it the entire money will be taken by the owner of the token. That is why many people tag ICO as a scam. One cannot claim or question against the fraudster. Or the investors cannot file a case against the fraudster because there is no intervention by the government during the ICO.
Also, ICO does not have any regulations during the process of development. Taking these factors as advantages, many people are involved in the ICO. These actions fade the real purpose of ICO which is not serving the purpose properly.
Security Token Offering (STO)
Security Token Offering is not like the ICO. This type of crowdfunding is entirely in contrast to ICO. Yes, true. The process of developing the STO is different compared to the ICO. But the intention of creating should have a project idea because every crowdsourcing is done for the cause, the same applies here. If you are having a good and worthy project idea then you can go with STO because the motive of crowdfunding will get accomplished here.
The process of security token is developed by backing the real-time asset with the crypto token, that is why this type of token is called a security token or asset-backed token. The tokenized asset offering is done completely by undergoing all the government regulations during the building process of an asset-backed token. The assets like properties, bonds, ETFs, etc. can be backed with the tokens. So the value of the token is based on the real-time asset that is backed with it.
By backing these real-time assets, it improves the credibility of the token, and investors will feel reliable to invest the token. Because the token owner cannot undergo any fraudulent activities during the crowdfunding because this will affect the real-time asset of the owner as well as he will be sentenced behind the bars. Like I said earlier the entire process will be regulated by the SEC and government. So fraudsters will be easily caught.
Most entrepreneurs and startup owners with great ideas will choose this type of approach for fundraising. Because their biggest dream would be transforming their business idea into a real-time business. This platform is helping them to accomplish it.
Initial Exchange Offering (IEO)
IEOs are exchange based crowdfunding. IEO is a unique feature some crypto exchanges will have in the name of the IEO module or launchpad. This feature is created by having a notion to pave the way for budding cryptocurrencies through which entrepreneurs will find opportunities for raising funds. The crypto users should create a token with a good project idea, as usual, that is needed for crowdfunding. For doing IEO, you must have an account in the exchange that has an IEO module/launchpad feature in it, only then you can do IEO.
The entire IEO process is regulated by the exchange. It is more like STO where so many regulations and back-end verifications will be done from the exchange. Before approving your project (i.e) token for the initial sale, the exchange will look for the scope of the project, feasibility of the project, and other account verifications are done by the exchange before getting approved for the initial sale.
During the initial sale, the token has to cross the margin sale amount that is fixed by the exchange. Only then the token is eligible for listing in the exchange. For every process, you must pay an amount like a fee to the crypto exchange. In the end, the fee amount will be more than the cost involved in developing the token. In terms of cost-wise, this method is not feasible.
Then what crowdfunding methodology will be profitable for entrepreneurs and startup owners for raising funds? You would have concluded which is the best one. Yes, it is a security token offering (STO). The reasons are obvious, by reading it you would have come to know about the practical reasons for opting for STO as the best way for raising funds through crypto crowdfunding.
