What is an Initial Coin Offering (ICO)?

As you know, we are currently running our ZetoChain presale ICO, which ends on the 11th of May. During the presale you get a 20% discount off the ICO price of all ZetoTokens. This is our way of rewarding early backers of ZetoChain, our blockchain-powered end-to-end cold chain management solution.

But what exactly is an ICO and how do ICOs work?

ICOs

An ICO is essentially a way to raise funds to kick-start a project. It has its roots in crowdfunding, but ICOs are powered by blockchain and are typically used to launch blockchain-related projects. While investors in a crowdfunding campaign exchange investment contributions for future products created by the company, investors in ICOs are generally looking for a return on their investment.

With ICOs, investing in innovative tech projects is no longer just for the super rich. A new project can have thousands of investors, each investing an amount that suits them and their financial situation.

Investors exchange financial contributions for blockchain-based tokens, which are essentially crypto coins made by and for the company that are launching the project.

Tokens

Tokens can have different purposes depending on the project:

• Utility token — In a similar way to crowdfunding, these tokens can be exchanged for future access to the company’s goods and services.
• Security token — These tokens have the potential to increase in value depending on the success of the project that it backs.

Investors are usually given the opportunity to purchase tokens in a presale ahead of the official public launch of the ICO. Companies often give incentives for these early investors, such as a discount on the full sale price of tokens.

Next comes the official launch of the ICO. This usually happens during a pre-set timeframe. Once the ICO sale ends, the tokens are distributed to the Ethereum wallets of the ICO investors. If an investor has multiple wallets, the tokens are put into the wallet from which the contribution was made. Once investors have the tokens in their wallets, they can keep them or, in time, sell them publicly on digital asset exchanges. The value of the tokens can rise rapidly, particularly if the project that it funds is successful.

So how can you find out about projects and determine the likelihood of their success?

Whitepapers

Companies that intend to launch an ICO generally publish a whitepaper ahead of the ICO sale. This whitepaper should tell you everything you need to know about the project and the team behind the it, along with information about the industry in which they operate, competitors, expected timelines for the project launch, and so on.

The whitepaper should provide you with enough information to help you make a calculated decision on whether or not there is a need in the market for the product that the ICO will launch, and gauge the commitment and ability of the team behind the product. If you think that the product will be successful, you know that it’s worthy of your investment.

ZetoToken

If you’re interested in investing in ZetoToken, here’s how you can get started:

1. Take a look at our whitepaper, which outlines what ZetoChain is, how it works, and the people behind ZetoChain
2. Set up an Ethereum wallet and buy some ether (you can skip this step you’re already up and running with Ethereum).
3. Complete our step-by-step whitelist application form available from the main ZetoChain website.

Once successful, you’ll receive a whitelist confirmation email. Now you’re ready to buy some ZetoTokens. We have posts on how to do this with MetaMask, MyEtherWallet and on your phone.

Originally published at www.zeto.ie on May 9, 2018.