Crypto Whitepapers and Litepapers -Understanding the Key Differences

As a startup, do you think raising funds through crypto tokens is possible? Of course, you can raise funds for your projects through crypto crowdfunding. Many startups prefer ICO and STO crowdfunding methods to raise funds for their projects effectively. This crowdfunding process takes place with whitepaper drafting, token creation, and deployment of the website. Crypto Whitepaper is nothing but a detailed document where the crypto project is explained in an in-depth manner. Here, you will have a query,

What is the purpose of drafting a whitepaper?

The sole purpose of Whitepaper is to attract and gain the trust of investors for the crypto project. Through your whitepaper, investors analyze your crypto project and decide whether to invest or not. So, a whitepaper should be drafted with utmost care. Like the whitepaper, there is a similar term named Litepaper. While talking about this, many people think that both Litepaper and Whitepaper are the same, but that is not the truth here. Certain differences prevail between these two.

So, in this blog, I will explain the crypto Whitepaper, litepaper and the Difference & similarities between a whitepaper and litepaper in a detailed manner.

What is Whitepaper?

The crypto whitepaper is a formal document that holds all the details about the crowdfunding project. These Whitepapers are drafted with a professional outlook and it is the finest tool used by startups to seek the attention of investors. This whitepaper acts as a trust factor that induces investors to invest in the crowdfunding project. The must-have content of the whitepaper is listed below,

1. Introduction — In this section, the overview of the crypto project should be explained.
2. Overview of the Problem — The real-life problem must be illustrated and the solution for that problem is given with the crypto project.
3. Token Components — The components like the working procedure of the token, token distribution, and listings are explained here. And also, the token standard, token supply, and type of blockchain are also mentioned.
4. Team Details — The information about the development company and the team members should be mentioned.
5. Roadmap — The launching date, listing dates, and crowdfunding plans are enlisted here.
6. Acknowledgement — The details of the resources that have been involved in the crypto project are given.

These are the whitepaper’s content details. Additionally, the information regarding tokens is explained with diagrams and pie charts to investors. By publishing a whitepaper to investors, there will be transparency about the crowdfunding project and token. In that sense, the popular whitepaper of the crypto market is Satoshi Nakamoto’s “Bitcoin: A Peer-to-Peer Electronic Cash System” which was published in 2008. This whitepaper has explained all the details of Bitcoin like the transaction process, network, mining process, server details, privacy, and Bitcoin’s calculation method.

These whitepapers are generally used in crypto crowdfunding methods like ICO and STO to introduce project details and tokens. The ICO whitepaper can be seen on the ICO website. Both ICO whitepaper and STO whitepaper drafting methods are the same. They are also used as a marketing tool to promote the company’s native token.

Crypto Whitepaper gives solutions for real-life problems through their project. For example, in Bitcoin’s whitepaper, Satoshi explained the real-life problems faced in transacting money with the third-party interface and gave a solution through his cryptocurrency Bitcoin.

What is Litepaper?

Like the whitepaper, Crypto Litepaper is also a formal document that comprises the token and project details. But the only difference between them is, Litepaper is like a trailer whereas Whitepaper is the movie itself. Litepaper also consists of the same content as the Whitepaper, but the way of explanation is simple in nature. In simple words, Litepaper is the concise version of the whitepaper.

The data, statistics, and pie charts of the project are illustrated more lightly for investors’ quick understanding. Even though it is short, the core information is illustrated properly. The essential contents to be included in the Litepaper are the crowdfunding project’s idea, market size, and token details.

The main purpose to create the Litepaper is to cover the general audience. As the whitepaper is long and thorough, only a few will be interested to read the content. But, the Litepaper focuses more on the key features, solutions for the problems, and benefits. So, it seeks more attention from investors who want to have a glance at the project. The writing style of the Litepaper will be in an engaging manner and also conversational.

Difference between Litepaper and Whitepaper

As mentioned earlier, both the whitepaper and Litepaper comprise the same characteristics and features. But some key differences are there between these two.

They are listed below,

Similarities between a Litepaper and Whitepaper

After seeing the major differences between a Whitepaper and a Litepaper, now we can see the similarities.

1. Detailed Information on Crowdfunding Project

The whitepaper and Litepapers both explain the crowdfunding project’s core concept and also the token details. The way of explanation can be changed but the basic content is similar.

2. Impact on Readers

As both the whitepaper and Litepaper will illustrate the project details, it will make an impact on the investors. Investors get attracted by the content and are ready to invest in the project to get new tokens.

3. Solution for existing problems

whitepaper and Litepaper give a detailed analysis of the problems faced by investors and also provide a solution for the existing problems.

4. Provide Transparency

As the project’s concept, technical aspects, and authoritative information are provided by both whitepaper and Litepaper, it is more transparent for investors.

These are the major similarities between the whitepaper and Litepaper. But, the whitepaper is widely used by startups in the initial stage to aspire the attention of investors. As to be more transparent, there comes the essential need for publishing a whitepaper.

Who Should Write Whitepaper and Why?

Crypto ICO and STO whitepaper is published by the project company on the website for investors’ reference. In the early stages, whitepapers were used only by businessmen to explain their ideas. But later, it was adopted by crypto startups to ensure investors with the ideology of their project. The crypto whitepaper is published on the ICO or STO website.

The same writing style and tone are used to draft both ICO Whitepaper and the STO whitepaper. During the boom of ICO in 2017, many startups started to create their own tokens and gave solutions for real-life problems. But only a few ICOs succeeded. That is because the core details of the project are delivered in the whitepaper in a proper and transparent way. So, as a startup, before drafting a whitepaper analyse the investor’s needs and give importance to the writing style of the whitepaper.

The whitepaper focuses more on Tokenomics like token burning and allocations. This gives in-depth knowledge to investors about the tokens. Hence, the need to write a whitepaper is essential while launching your crowdfunding project. This whitepaper can be written either by startups or through approaching a Whitepaper service provider. While approaching a service provider, the whitepaper can be written in a professional manner without any mistakes.

Effect on Readers

Of course, the whitepaper is the foremost tool used in crowdfunding methods like ICO and STO to engage with investors. Famous research done on ‘Crowdfunding Project success’ by Finance Research Letters, it is found that ‘ICO or STO project success correlated with the length and complexity of the whitepaper’. From this, it is clear that the whitepaper content plays an important role in the deciding factor for investors.

While including the use cases, development team, Tokenomics, funds, and expenses of the project, investors will have a clear idea about the crypto project. This helps the investors to trust the project and boosts them to aid startups with their funds.

Wrap-Up

As a whole, Crypto Whitepaper is an essential and deciding factor for ICO and STO projects’ success. As a startup, you can formulate your own whitepaper, or else you can approach a development company for drafting your whitepaper effectively. I hope you have gained an overview of the whitepaper and its essential factors. So, while drafting a whitepaper for your ICO or STO project be aware of the writing style and professional tone.