A startup company in need of capital has traditionally raised funds through issuing equity or debt, customer-based financing, and, more recently, crowdfunding platforms. Token Sales, a new type of funding, have exploded this year. This article will introduce this platform and the features you need for your token sale platform.
1. What is a token sale platform?
Token Sales have emerged because of the advancement of blockchain technology. Blockchain is a digital ledger that uses cryptography to keep transactions secure and chronologically records transactions. These transactions can involve transferring money, goods, or sensitive data.
A Token Sale occurs when a company sells a portion of its tokens through a digital token crowd sale. Tokens are exchanged for a fixed or tiered amount of an existing liquid medium of exchange, such as Bitcoin or Ether (Ethereum).
The company can then use Bitcoins or Ether raised in the Token Sale or convert them to fiat currency, such as dollars. This enables the company to fund the development of its products and services and to grow and operate the business. Buyers of the company’s digital tokens may use the digital token as part of the system, product, or service being developed by the company, depending on the platform design.
2. Three things you need for your token sale platform
Most token sale platforms are built on bad ideas
Most token sale platforms cannot fulfill all of their promises. Or they can, but their business concept is flawed and makes no sense.
Token sale platforms will be subject to pump-and-dumps and high volatility
Since its inception, the altcoin market has been subject to wild swings and high volatility, which isn’t always the fault of token sale platform teams. Pump-and-dump groups, which artificially raise the value of a cryptocurrency to sell it at a profit, make the growing cryptocurrency market hazardous for inexperienced investors. Exit scams are also ineffective.
Then there’s the fact that cryptocurrency is such a new asset class that everything, especially in a bear market, basically tracks Bitcoin. Everything is up when Bitcoin is up. And when Bitcoin falls, everything falls.
Every token sale platform experiences a large pump shortly after the launch (or whenever it’s token first appears on an exchange), sending the price skyrocketing into the stratosphere. The token price then quickly collapses, usually to a resistance point near the initial sale price.
If you plan to take part in the token sale platform market, you should know these issues. And it would help if you devised a strategy to protect the value of your token even in turbulent times. Pump-and-dump schemes will occur, but your actions will still determine the long-term value of your token. Token burning, token buybacks, and airdrops can all help to preserve value.
There is still a lot of chance in this blue ocean market
Given the current bear market, the growing number of token sale platforms, and the ongoing regulatory uncertainty, it’s easy to believe that the time for launching a token sale platform has passed. However, we believe that time gets involved.
Blockchains are a maturing technology with far too many potential applications to list here. These use cases have only been briefly mentioned in token sale platform white papers and road maps. None of them have been thoroughly investigated.
Placing real estate sales on the blockchain, for example, would solve a slew of issues related to illiquidity and ease of investment. Vendors would pay on time by putting the freelance marketplace on the blockchain.
There are also several issues with cryptocurrencies that must be addressed immediately. Because real assets do not back them, nearly all cryptocurrencies and tokens experience high volatility and unpredictable price swings.
Creating the world’s first true stable coin (as the guys at Basis did after raising $133 million from VCs like Andreessen Horowitz) would revolutionize finance as we know it. Editing immutable code efficiently is another ongoing challenge.
Launching a Token sale platform can catapult your company to unprecedented heights. However, to provide a peerless Token platform, selecting the best digital asset company to manage token sales is critical. Employ a team of Blockchain developers to assist you with your Token Sales. Please get in touch with SmartOSC if you require help with Blockchain services.
Contact us if you have any queries about Blockchain development services, dApps development, NFT marketplace development, Crypto wallet development, Smart contracts development.