ICO Development Checklist: 11 Easy Steps to Succeed

Over the last few years, we have witnessed how the cryptocurrency ecosystem has been reshaping financial services and the rest of the world. More and more entrepreneurs wanted to harness the power of distributed ledger technology and release blockchain-based solutions. Initial Public Offering or ICO launch has become a popular method of raising funds for such projects.

Regardless of whether you are new to ICO development or an expert who has completed many successful projects, there are specific steps you should take to launch an ICO to win the fundraising game. Though this method offers many benefits over traditional funding solutions, it can be challenging if you rush into it unprepared.

If you are into ICO development, you will find this piece helpful. In today’s article, OpenGeeksLab will route you through all stages of the process: from planning and development to launching an ICO. Let’s dive in.

Definition of an ICO and Its Types

To start with, we use the term ICO development to define the situation when entrepreneurs create and sell digital tokens to investors to raise money for their blockchain-based projects.

Suppose you consider building a decentralized lending and borrowing application, which allows users to take loans using digital assets and decentralized finance (DeFI) protocols. Such apps are a good alternative to traditional lending in terms of security, flexibility, and lower fees. So you have got a potentially profitable idea. Now you need funds for making it real.

When it comes to ICO, entrepreneurs have two available options. Business owners can either develop crowdfunding for themselves, or hire a seasoned ICO services company.

If you are interested in cryptocurrency, you probably know that the term Initial Coin Offering was used for the first time by R.J Willett, founder of Mastercoin (Omni), which eventually has grown into a huge ecosystem in 2013.

Willett launched ICO for Mastercoin in July 2013. He sold digital tokens to early investors in exchange for Bitcoin. Ultimately, R.J Willett managed to raise $500,000 worth of Bitcoins.

Another successful example is Ethereum’s ICO, which took place in 2014, when investors purchased 50 million ether tokens for $0.311 per item. On May 12, 2021, when the price reached $4,382,73, investors got a 1,408,903% return on investment.

Finally, we cannot but mention NEO, commonly known as China’s Ethereum. Its Initial Coin Offering got huge support from the Chinese government and technology giants like Alibaba and Microsoft Inc.

A financial report by the NEO Foundation stated that the ICO raised $97,517 along with 8,169 bitcoins, which were later liquidated for over $8,3 million by February 2018.

Unfortunately, NEO could not surpass Ethereum, and its price dropped from $180 to $40 in September 2021.

To sum up, potentially high return on investment and decentralized nature of blockchain are the main benefits of ICO, which contributed to this fundraising method.

When it comes to transitional fundraising, you can use standard crowdfunding platforms to finance your projects. However, if you create an ICO, you sell tokens on platforms with specific functionality that includes automated token distribution or secure wallet implementation. If your venture is in demand, the token value increases. As a result, investors get more valuable rewards.

Initial coin offerings can be private or public. See the difference below:

• Private ICO ensures that only a limited number of high-profile or high-net with investors can take part in the launch. Additionally, a set of specific investment requirements is defined before the ICO launch.
• Public ICO resembles crowdfunding campaigns initiated by startups. There are no investment requirements and many investors regardless of their portfolio size can participate.

We have discussed the basics of ICO development and explored its most successful examples. Now we offer you a closer look at how ICO services function. Armed with these valuable insights, you will be able to define which option works best for your future token sale.

The Way ICO Fundraising Works

In contrast to stocks, tokens do not offer equity in an organization. The acquisition of your ICO digital assets by investors typically means they get some part of a service created in your company. When it comes to ICO development, blockchain is integrated with the help of proven platforms such as Ethereum, ensuring that the process of ICO token development will be implemented with minimum code changes.

When ICO is launched, tokens can be traded for cryptocurrencies. Alternatively, they can be exchanged for flat money.

Since token sale and decentralization are relatively new terms, there are many tricky nuances you may find difficult to understand. It means that you need a thought-out strategy to manage an initial coin offering successfully.

Laws and Regulations Behind ICO Development

ICO development, being an entirely new phenomenon, has reshaped the financial and technology industries. However, unified laws and regulations governing this capital-raising method are yet to be established. The existing ones vary greatly from country to country.

The lack of consistency in jurisdictions made it necessary to study regulatory frameworks deeply before delving into fundraising. Legal issues arise around non-fungible tokens, too, but that is a different story. With ICO, while some European countries, for example, France, are thinking of compiling new patterns for token issuances, other countries like China and South Korea banned ICO development completely.

In the USA, Initial Coin Offering is governed by The United States Security and Exchange Comissions, which regulates not only ICO launched by American companies but ICO tokens available to US citizens as well.

Australia, New Zealand, UAE, and Hong Kong, went the other way and developed and published straightforward and transparent protocols to regulate ICO development and make initial Coin Offering more attractive.

To sum up, each country has different regulatory policies regarding crypto-based businesses. You have to explore each case individually or hire seasoned lawyers with vast expertise in this field.

What Is Initial Coin Offering Whitepaper and Why Does It Matter?

Whether you succeed in ICO development depends upon many factors. One of the must-haves is a whitepaper. This document contains the primary information about your venture, namely the project outline, chosen blockchain technology, development team, and business potential for investors.

Other aspects of your project that may be described in a whitepaper include mission/vision, objectives, intended funds use, target audience, roadmap including critical milestones, timetable for a token sale, and other practical details.

Moreover, your ICO whitepaper should have a budget breakdown that will show investors how you plan to spend the money you will get and help them assess your project plan and ensure that your idea is worth investing in.

Don’t forget to uncover risks that may arise from relying on a new technology and explain how you are going to mitigate them.

Finally, explain the technical description of ICO development in simple terms to demonstrate that you understand the process.

It should be noted that the whitepaper is, first and foremost, a business document, so you should not overload it with too much information. Besides, the content of your whitepaper should have the highest quality. Otherwise, you will not be able to convince investors to support your project idea.

The importance of writing a good Coin Offering Whitepaper should not be underestimated. At the end of the day, this document will determine whether your projects will attract investors and get the required funding. Therefore, to ensure the highest quality of the Coin Offering Whitepaper, it would be best to hire a seasoned ICO development company to write this document for you.

When preparing to launch an ICO, you should carefully analyze its main pros and cons. Thus, you will be able to understand whether it is worth the hype and make the right decision.

Pros and Cons of an ICO

Before choosing ICO development services, it is great to learn its advantages and disadvantages. The perks cover the following:

• Fewer barriers to entry. In stark contrast to traditional Initial Public Offerings, where only a small group of large businesses and multimillion capitalists and investors can participate in the IPO, the ICO launch provides investors with lower barriers to entry, resulting in the diversity of blockchain-based startup funding.
• No intermediaries. Since non-fungible tokens mean instant custody, financial intermediaries are no longer required. As a result, the cost of funding is significantly reduced while the speed of funding is increased. Besides, as opposed to traditional funding, the ICO launch requires less government control.
• High liquidity. This term means that digital assets can be quickly bought or sold in the market without significantly impacting their value. Due to safety and effectiveness, crypto coins are more liquid than other assets. Another reason why tokens predominate is the huge liquidity premium, which is a compensation for investing in non-tradable tradable assets.
• Convenience for both investors and startups. A wide range of people can participate in the Initial Coin Offering, from freelancers to mature investors and well-established businesses. Besides, there are no time limitations, meaning that contributors can invest their money anytime. These benefits make ICO a great option for startups who often lack funding to kickstart their project.
• Profit potential. ICOs are known as high-risk, high-reward digital assets. It means that even though they can be considered risky and unregulated, the profit investors gain outweighs any financial losses.
• Democratizing model. The emergence of ICO forever changed the fundraising landscape. Access to financial capital was significantly democratized, allowing people worldwide to invest in a business established and operating in any country. Apart from that, by launching an ICO, you get new investment opportunities since your project may appeal to a large number of international investors.

Now when you know ICO development benefits, let us talk about possible stepbacks.

• A risk of fraud. Since ICO projects don’t always undergo the same regulatory process associated with IPO, they become subject to malicious activities and fraud. It makes it easy for illegal companies to extract money from vulnerable investors.
• Volatile. There are so many factors that can affect blockchain technologies and the current value of your tokens. Investors can witness some drastic changes in the price of their assets, which can make their experience either exciting or challenging.
• Often ICOs have a low-profit rate. If your ICO development project is a success, investors receive high returns. However, if it fails, they are left with nothing. Furthermore, tokens issued by ICO developers for Initial Coin Offering may become worthless.

You should analyze all those pros and cons before investing your time and money into ICO development services. Explore the topic carefully and you will be able to make ICO development smooth and effortless.

Steps to Launching an ICO

Initial Coin Offering is popular among businesses and ICO developers due to their simplicity and time-saving. However, to ensure the smooth and seamless process, you need to follow certain development steps. Let’s discuss each of them:

1. ICO Team and Advisors Structure

A successful launch of the ICO design process starts with hiring a highly qualified team. Generally, such projects require six to nine specialists that can be divided into two categories: ICO developers and advisors.

• ICO developers will create your blockchain-based solution. Vast expertise in smart contracts and a deep understanding of blockchain technology is absolutely necessary for these technical professionals.
• Advisors are people hired to assist you at the earliest stages of the Initial Coin Offering. They can find the most efficient marketing techniques to promote your project, identify how to make it more appealing to investors, and offer legal advice.

2. ICO Development Roadmap Creation

Enable potential investors to track the progress of your blockchain-based project by creating a detailed ICO development roadmap. To convince them that your venture has a great chance of success, ensure that you deliver a clear and straightforward project vision and specify SMART goals you expect to achieve. Other vital information that should be described there include the main development stages with clear timelines for their execution. Enable investors to quickly check the work of your team of ICO developers to ensure that your project is headed in the right direction.

A well-developed product roadmap should show potential investors how you are going to transform your business idea into a working and profitable solution.

3. Market Research and Planning

Before launching an ICO development solution, conduct market research to identify market demand, uncover hidden trends, and get valuable insights into the blockchain industry landscape. It will also reveal growth opportunities and potential bottlenecks.

The ICO development company you will partner with will help you conduct competitor analysis and come up with strategic recommendations on how to improve your profitability.

If you are confident about the project’s success, you can try to demonstrate it in the market through several platforms. Thus, you will get specific feedback and gain attention from particular investors.

4. White Paper Drafting

We have already mentioned the importance of hiring a reliable ICO development services company to write a successful ICO whitepaper. Let’s check once again what information this document should include:

• The problem you are going to solve.
• Product target audience.
• A detailed technical description of the solution.
• Market analysis data.
• A project’s prototypes.
• Budget breakdown.
• Technical overview.
• Blockchain adoption.
• A development roadmap.
• The outline of the ICO token release, specifically the value of your crypto tokens, their number, and the crypto token platform where they will be issued.
• Terms and conditions.
• Security information.
• Fund usage.

Typically, it takes around 25-35 pages. We recommend balancing technical and nontechnical language to achieve the best results with your whitepaper.

5. Website for Launching an ICO

You need to develop a visually appealing website with simple and intuitive navigation to showcase your ICO development project. It should have relevant, high-quality, and convincing content to grasp investors’ attention.

To present your ICO development, you need to develop an eye-catching, informative, and intuitive website. Here you should publish relevant information about your project that may draw the attention of potential investors.

It is crucial to make an easy-to-navigate and captivating website for presenting your ICO development. To capture potential investors’ attention, it must contain relevant information described convincingly.

It would be a great idea to hire an ICO software development company that will follow the best UI/UX design trends and guidelines to support the ICO launch with an attractive and informative website.

6. ICO Promotion and Community Support

To achieve the best results with ICO development, you need to develop different marketing strategies to promote your project and get support from your vibrant community. The most popular and proven promotional techniques are as follows:

• Social media marketing. Tell your audience about your venture on Instagram, Facebook, or LinkedIn to fuel interest in your project.
• Public channels or groups. Here, we are talking about such platforms as Slack and Discord, where you can communicate with supporters and active community members.
• Specialized forums. You can also establish an online presence on Reddit, BitcoinTalk, or other blockchain and DeFi forums to attract tech-savvy investors.
• Initial Coin Offering listing. You can ask the ICO development company you partner with to help you publish the information about your ICO on relevant websites where active, past, and future ICOs are listed.
• Conferences, exhibitions, and interviews. You can visit all those events to present your ICO. Additionally, you can use these meetings to make new valuable connections with seasoned ICO development services providers, industry experts, or advisors who can become a part of your team.

All those marketing approaches will help you spread a word about your ICO and gain the attention of potential investors.

7. Choosing Token Sales Model

If you have been wondering how to create an ICO token for some time, you have definitely come across different sales models. Let’s discuss each of them in more detail:

• Uncapped with a fixed rate. With this model, you set a fixed price to sell your tokens. However, the number of participants, ICO duration, and raised amount stay unlimited.
• Hidden caps. Participants don’t know the exact time of the allocation ending. This information will be disclosed in the process.
• Dutch auction and its reverse option: In a Dutch Auction, you use a smart contract to count the token price after receiving all bids and prioritize the highest bids. The reverse method for this auction starts with a high token price and cap, which declines each day the sale runs or for every mined block. When caps are reached, you end this sale.
• Soft and hard caps. Hard caps define the highest amount of money your Initial Coin Offering can raise, while soft caps mean the smallest amount of money you need to continue building your solution.
• A capped model with a fixed rate implies that the Initial Coin Offering has a limited duration of a few months and there is a fixed ratio for the token-to-cryptocurrency exchange. You also set limits for the number of tokens you are going to sell.
• Same as in the previous model, the token-to-cryptocurrency exchange ratio is fixed, and a basic rule for tokens offering is first-come-first-serve. Furthermore, there is a limit on the number of tokens available for sale.
• A hybrid method implies a combination of several sales models. Since the ICO term has appeared recently, many businesses try to explore different token sales models to achieve the best results and find a proper way to create an ICO token.

All those models are worth considering when planning wider token distribution to quality users. However, if you wonder how to create an ICO token that will bring you a stable income, we recommend avoiding too complicated sales models that can drive away your supporters.

8. Developing Smart Contract

If you want to create an ICO token quickly and efficiently, you should not ignore the importance of smart contracts. They perform multiple functions, be it allowing token holders to sell or transfer their digital assets, handling token purchases, or connecting to the crypto wallet.

Given that, it is vital to conduct smart contracts audits to ensure their security and reliability. When building smart contracts, follow the ERC-20 standard for ICO services, which guides the development of new tokens.

9. Establish Your Digital Wallet

Another crucial step is development of a cryptocurrency wallet which will allow you to send, receive, and collect Initial Coin Offering Assets. A reliable ICO software development company will help you with this task.

10. ICO Post-Sale

So, the ICO token development process is finished, and your digital assets can be bought or exchanged, meaning that users can exchange their flat currency to get your tokens or crypto coins instead. If the ICO development was successful and you got the required funding, congratulations. Now, your task is to stick to the promises you gave your investors and stay engaged with your community that encouraged you to create an ICO. Their loyalty will be beneficial for your company in the future.

11. Listing on Exchange Platforms

You need to list your tokens on secure and legally compliant crypto exchanges even when the ICO development process is not completed. By putting your tokens on such platforms, you can promote your Initial Coin Offering organically.

Remember that each platform sets different requirements regarding allowing tokens to be listed there. They may vary depending on your token or the nature of your business. However, some of them are unified. For example, your smart contract should be audited.

The most famous and reliable platforms include Binance Launchpad, Kraken, and Coinbase Pro (former GDFX).

Now that you know the main stages of launching an ICO, you get better chances to deliver a successful and profitable solution.

Unleash the Potential of ICO Solutions

The ICO launch can be a challenging and tedious process that may take from several months to a year. Luckily the partnership with a seasoned ICO development services provider can make things easier for you and ensure that the whole process will go smoothly.

So if you decided to delve into ICO development and now need a technology partner, feel free to contact us. Our experts will be eager to take on your project and provide you with end-to-end ICO development services.