Top Crypto Fundraising Methods with Suitable Blockchain Platforms
In the fast-phasing world, every one of us has a desire to start a business. However, the majority of our startup trials have been discontinued due to insufficient capital. Here lies the craze of the cryptocurrency that has a booming charm — crypto fundraising. Crypto crowdfunding is the starting point for startups like you to raise capital. Similar to different types of cryptos, we have a variety of crypto fundraising methods. But what to choose and where to begin the business practices are the stumbling blocks here.
To help you in this, let me uncover the options for launching your crypto fundraising platform. In this blog, we will discuss the benefits, significance, and top crypto crowdfunding methods. I also share my knowledge with real-time case studies that may ease your learning gap. Now let us first start with the…
Benefits of Crypto Fundraising
Crypto fundraising simplifies the way you want to collect the required capital. Additionally, it paves a way to impress potential investors towards your business. So as a startup, what else can we expect from crypto crowdfunding? Here we go with them.
Global Investment
Unlike traditional fundraising, the procedures are direct and accessible to a pool of global investors. Thus crypto fundraising bridges a gap between you and global investors without geographical restrictions.
Lower Legal Obligations
Traditional fundraising needs more room to clear legal regulations. Crypto fundraising also follows significant legal and regulatory obligations. Yet, the standards and level of security ease your fundraising efforts with minimal regulations.
Scope of Tokenization
Similar to other tokens, these crowdfunding tokens are also usable for trading, accessibility, and more. Thus you can connect your tokens with several use cases enhancing the business value.
Instant fundraising
Unlike conventional crowdfunding, there is no need for paperwork and stages of approvals. The decentralized approach limits your time spending and complications in capital making.
Business Promotions
Crypto crowdfunding allows you to deliver the business motives to potential investors. As a result, your business will get instant recognition and brand awareness among the crypto community.
These are the advantageous factors that can turn your ambitions into a successful enterprise.
But how does it create magic for you?
Blockchain Technology is the powering source behind it. The right blockchain can help you express fundraising objectives via a technically robust fundraising platform. So let me unwrap the…
Importance of Selecting the Right Blockchain Platform
As a startup, you may look for a promising and appealing fundraising platform. If so, then you can not neglect the blockchain integration. So get to know the guiding factors to choose the best blockchain for crypto fundraising.
Security
Security is the first and foremost thing of any business ideology. Since you are going to deal with financial elements, graded security becomes essential. So before choosing a blockchain consider its security protocols and measures.
Adoption rate
Crypto crowdfunding will connect you with diverse qualities of people. Their expectations and level of convenience will vary accordingly. So choose a prominent blockchain that is widely adopted across the global population.
Speed
For a dynamic crypto fundraising platform, speed and performance are paramount. A blockchain with higher performance and quicker transaction confirmation can contribute well to your crowdfunding.
Smart Contract
The smart contract can automate efficient and seamless crowdfunding without the need for supervision. So you can manage token issuance, investor data keeping, and asset management effortlessly.
Scalability
When it comes to crowdfunding, your fundraising platform should be capable of managing peak operations. So consider the blockchain that offers more scalability to your fundraising strategy.
The said factors can help you choose the right blockchain for crypto fundraising. With the right blockchain, your fundraising platform can produce better outcomes. As a result, you can gain the investors’ attention quickly.
But how can you make them appealing to meet worldwide investors’ expectations is the turnkey here. In this case, understanding the top crypto crowdfunding methods might help you. So here we outline…
Top Crypto Fundraising Methods to Consider
Well! The crypto space has no shortage of crowdfunding methods. Each one is unique and holds incredible profit-making capability. Individually, they are the best choice for certain business ideologies. So what you have to do is learn their concept of fundraising. Let us start from here…
ICO — Initial Coin Offering
If you look at the history, ICO has been a prominent crypto fundraising method. Since it arrived in 2013, Initial Coin Offering directly deals with crypto coin, Bitcoin. That’s why they are also known as Initial Cryptocurrency Offerings. After Ethereum’s success in ICO, the value of this fundraising method has grown. Let me shed some light on Ethereum’s success.
Later in 2014, a prominent cryptocurrency player Ethereum proposed to Launch an ICO. The primary focus of this project is to establish a platform that supports smart contracts, and DApps and allows individual ownership rights. This is not possible with the Bitcoin network. The crowdfunding became successful with a capital of more than 31,500 BTC worth $18.3 million. This is the turning point where people start using ICO and recognizing its profit potential. The next one is,
STO — Security Token Offering
The major reason behind STO is gaining momentum among investors is its security tokens. Generally, security tokens represent real-world assets like real estate, stocks, shares, and more. Unlike utility tokens, security tokens are compliant with the SEC regulations. This adds significance to security token offerings keeping them a reliable crypto fundraising method.
Speaking further, STO came into the market in the year of 2018. The first end-to-end Ethereum blockchain bond was issued by Santander Bank in 2019. This is considered to be a big success for STO worth $20 million. Following the success, many investors and fundraisers show interest in the STO Development.
IEO — Initial Exchange Offering
If you are short of knowledge on regulatory norms and the right marketing practices, then you can pick IEO crowdfunding. In this method, crypto exchanges will conduct token sales and gather funds from investors. Since crypto exchanges deal with fundraising, you can expect higher security following regulatory norms. Also, these exchanges simplify the fundraising needs as they have access to the wider investor community. So your efforts towards fundraising will be minimal in the initial exchange offering.
Speaking of real-time statistics, you may refer to BitTorrent, a file-sharing platform that raises funds through Binance’s IEO launch pad. This is the first IEO fundraising that has raised 7.2 million. So if you prefer a secure and convenient fundraising, then IEO is the best fit for you.
IDO — Initial DEX Offering
The initial DEX offering is also similar to the initial exchange offering. The difference here is that IDO collects funds from the set of traders belonging to a particular decentralized exchange. Since decentralized exchanges have certain reputed traders, it is easy to collect the funds. So comparing the possibility of crypto fundraising, IDO might be quicker with uniform liquidity. However, the DEX has uneven liquidity, which might impact the fundraising potential.
Speaking further, from the inception of IDOs in 2018 to date, more than $1.7 billion in funds have been raised. So thousands of startups have benefitted through IDO crowdfunding. Now let us check with the next method…
IAO — Initial Airdrop Offering
The Initial Airdrop Offering is similar to the Initial Coin Offering. However, the difference here is that the token will be delivered to the existing contributor. And mostly, the tokens will be freebies and do not gather any investment. This is like a promotional activity. The motive of this project is to increase brand awareness by offering such reward tokens. As a result, your enterprise will have a higher business adoption and community engagement.
Some popular and grown crypto enterprises also follow IAO for their enterprise growth. One of the leading crypto exchanges — Uniswap offered 400 UNI tokens to users in 2020. Likewise, Bybit offered airdrops worth $500 free to its users in 2021.
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IGO — Initial Game Offering
The benefits of using blockchain technology and crypto assets are evident in the gaming sector. Many Play-to-Earn games are now integrating NFTs as their game assets. Accordingly, the demand for such assets is also increasing in nature. But if you believe me if I said, you can buy such game assets through crowdfunding. Yes, Initial Game Offering does this for crypto fundraising. The fundraiser will offer game assets or game services instead of tokens here.
Some popular IGO launch pads for your consideration are GameFi, Binance NFT, and Gamestarter. The non-fungible tokens offered through IGO can be traded in renowned NFT marketplaces. So initial game offering is also a perfect medium of investment.
IFO — Initial Farm Offering
ICO is the fundamental principle behind the Initial Farm Offering. But unlike ICO crypto fundraising, here the fundraising process happens in a Decentralized exchange. The platform that hosts IFO sells its native tokens to investors. The investor can contribute to the hosting decentralized exchange’s liquidity. IFO tokens are the native token of the fundraising platform. And so, it is ideal for investing further in platform operations.
PancakeSwap is a decentralized exchange that hosts most of the IFO fundraising processes. The investors will receive cake tokens as a result of rewards when farming. These tokens can be used for platform operations and are tradable in prominent exchanges.
So these are the top 7 crypto fundraising methods trending in the crypto space. Each method has a unique style of fundraising and profit-making strategies. Also, they have different security and regulatory measures. However, choosing the right crypto fundraising method completely depends on your requirements. But to conduct efficient fundraising, you need certain components ready. They are,
Fundraising platform
Whitepaper
Crypto tokens
Crypto wallet
Creating all the said components with your own skills set is definitely a complex process. The creation process needs in-depth programming and other technical understanding. In addition to that, deciding the token, and wallet types, and preparing an informative whitepaper need professional guidance. So approaching a prominent crypto fundraising platform development company might be an ideal option for you. They can help you identify the right fundraising method and overcome the challenges ahead of the development.
Final Thoughts…
The inception of blockchain has been bringing innovations in the crypto ground visibly. Crypto fundraising has no more exceptions in this steadily growing across different fundraising methods. The statistical data on global crypto crowdfunding market value also reveal a positive hope. The expected projection is set to reach around 1.5 billion by the end of 2024. So if you are planning to create a crypto fundraising platform it will be the right choice. On the other hand, fundraising also offers added benefits like global contribution, business exposure, and more.
Therefore what you have to do is pick the right crypto crowdfunding method. And to decide, where you are going to begin your development. In this sense, consider the security, regulatory obligations, and other developmental factors associated with fundraising methods. As a startup, my suggestion would be that you can seek expert professionals’ direction. Their technical understanding and experience might help create a feature-loaded crypto fundraising platform. So that you can work on other promotional activities peacefully. So make a wise decision of choosing the right development partner to turn your fundraising successful.
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