Whether it’s a platform, an NFT marketplace, or a decentralized application (dApp), every major crypto project starts with an initial fundraising campaign. In most cases, conventional methods of raising money might not apply to cryptocurrency enterprises, but there is an alternative way to do that. Token crowdfunding, or offering, brings in more investors and generates money for business growth.
There are many various methods by which your crypto startup might raise money for further growth, so let’s go through how it all happens.
Crypto fundraising ? how is it done?
So, how do you raise money at the beginning of your crypto project’s life? A convenient fundraising model will not work well with crypto, so you have to opt for something a little bit different. The path from founding the project to getting your token listed on the exchange has a few stages:
Development and testing. Your team has to work hard to make a unique and promising project ? it can be a dApp, an NFT marketplace, or a full-on ecosystem run by crypto. Paying attention to details and focusing on creating something unique will eventually pay off.
Crypto fundraising. Now that your project is ready to be announced to the public, you must attract investments first. You can take a debt or turn to angel investors. The latter is a great option that will give your project better credibility. This step is not only for raising money for future development but also for gaining social credit and trust from the community. Once you have enough resources, you can apply for IDO or IEO (see later). This stage will give you a boost in project awareness inside the crypto community while raising the necessary funds to provide liquidity for your tokens.
Crypto listing. This is the ultimate goal for every cryptocurrency. Being listed on an exchange means you have enough credibility, and the project is quite promising. This is where a wider public can invest in your project and take it to a new level.
To apply for the fundraising, you have to choose the platform or launchpad and the fundraising method and set a solid ground for your project to launch: marketing and paperwork.
Crypto transparency fundraising ? real or myth?
When you work on your first crypto project, choosing a fundraising method can get tricky. We’ll review the three most popular fundraising models and discuss their transparency.
Initial Coin Offerings were roaring in 2017 ? every big project launched an ICO to raise some money. ICOs are hosted on the project’s website, and the transactions are not supervised. The project owner is in complete control of the campaign, including marketing, payment processing, and everything else. While this model helped many big projects launch successfully, there was no way to predict whether the project would use the money raised for further development or disappear from the public eye. And so, ICO lost a fair share of its popularity, which is where IEOs and IDOs step in.
Initial Exchange Offerings, as you can guess by the name, are hosted by exchange platforms. The exchange is responsible for checking the project and its founders for transparency and advertising the project to the investors’ pool. During the IEO presale, every transaction is executed on the centralized exchange, meaning the platform has full control and responsibility over a fundraising campaign.
While the idea of IEO sounds more appealing and even safer than ICO, there are also IDOs, or Initial DEX offerings, that can be roughly considered a hybrid of these two methods.
IDOs are hosted on decentralized exchange launchpads, with the exchange taking responsibility for the project’s credibility. Meanwhile, transactions are decentralized and executed on a peer-to-peer basis, which is preferable for many investors and some types of crypto projects ? for example, for decentralized apps (dApps).
Choosing a crypto fundraising platform
So, how to decide on the fundraising method for your crypto project?
If you run a decentralized crypto ecosystem or an app, IDO is your best choice. Besides, it’s the fastest way to get listed on the exchange the launchpad belongs to.
You can also opt for IEO if you want to raise better awareness about your project without worrying about marketing strategies ? the platforms will do it for you.
What’s more important is where you will get listed after the fundraising campaign is over. The best option is a tier-two platform like P2B, where promising crypto projects get introduced to a big and loyal audience during the fundraising campaign. Next, the token gets listed on the same exchange, and it will be a thousand times easier than pursuing a listing on a big tier-one platform like Binance.
Start one step at a time, choose your fundraising method and platform wisely, and your project will succeed.