Initial Coin Offering is evolving as a new or alternative source of raising funds or capital by start-ups or entrepreneurs working in the Blockchain tech or Web 3.0 technologies. All of us would perhaps be well aware of Initial Public Offering (IPO) by corporates, banking & finance companies or even by new-age technology platforms for raising fresh capital or providing an exit route to existing private equity investors and/or venture capitalists.
What Are Initial Coin Offerings (ICO)?
The launch of a new token using blockchain technology by a start-up or an entrepreneur to raise funds from investors who are searching for investment opportunities is known as an Initial Coin Offering. One of the primary advantages of ICO investment is keeping intermediaries at bay and allowing a direct connection between the company and the investors. Such types of coin offerings have caught the frenzy of the investors, though not having ideas about the risk associated and how to mitigate it.
How To Identify Good Initial Coin Offerings (ICO)?
With the emergence of blockchain as a disruptive technology, a plethora of start-ups have launched or are in the process of launching their own ICO for cryptocurrency as a major source of funding. Blockchain-backed smart contracts or decentralized applications (DApps) facilitated developers to create their own cryptocurrency or token.
It’s essential to identify prospective ICO for cryptocurrency having growth potential, and you should look out for the following:
- Establish credentials of promoters;
- Disruptive concepts like NFT or gaming could yield better results;
- Competition in the sector where ICO is planned viz. large players, small companies, entry-exit barriers, and more;
- Upgraded proofing concept with proof-of-stake or sharding technology could better bet;
- Prospectus articulating usefulness of the solutions offered and areas addressed;
- Besides an intention to offer or create value, what are the other functions offered by coins with the platform;
- Finally, the risk appetite of investors plays a vital role.
It’s possible to view the forthcoming ICO Calendar on coinmarketcap and decide on the investment based on the aforementioned criterion.
Top Initial Coin Offerings (ICOs)
Let us see some of the successful ICOs that have been executed in the past. Here are some of the biggest fund-raiser ICOs :
- EOS raised a record US$ 4.2 billion through a year-long 3 biggest funding rounds of 2018;
- Telegram Open Network (TON) raised a hefty sum of US$ 1.7 billion in two tranches in March 2018 and October 2018;
- Tatatu (TTU) succeeded in mobilizing US$ 575 million in June 2018;
- Dragon coin (DRG) raised US$ 320 million in March 2018;
- HDAC coin of Hyundai Digital Asset Company raised US$ 258 million in December 2017.
Diversifying Your Portfolio To Mitigate Risks
ICOs are a profitable investment option, but only if you know what you are doing. A large chunk of ICOs fail, taking investor money down with them. If you want to mitigate your risks and still generate consistent returns, you can opt for profitable investment solutions by Mudrex.