How Do Crowdsale Work for Blockchain Companies?
It is easy to launch your own crowdsale, especially if you are using a reputable ICO platform to do so. ERC 20 tokens can be distributed in a variety of ways, and one popular method is holding a crowdsale, like an initial coin offering. Crowdsales are a way for a company to raise capital for the business by creating their own ERC 20 token that can be purchased with ether, or ethereum’s native currency. Whenever a crowdsale takes place, a company gets liquid capital in the form of ether that was paid in by investors in exchange for the token. The company is also able to reserve some amount of ERC 20 tokens that were sold in the crowdsale.
In order to participate, an investor must connect to the ethereum blockchain with an account. This account has a wallet address that can store ether, as well as the ERC 20 tokens that are purchased in the crowdsale. The investor must visit a crowdsale website that talks to a smart contract, and this smart contract governs all the rules about how crowdsale works. Whenever an investor purchases tokens on the crowdsale website, they send ether to a smart contract, and smart contract instantly dispensers the tokens that they purchased to their wallet. This smart contract sets the price of the token and also governs the rules about how the crowdsale behaves.
Crowdsale can take on many different shapes and sizes. They can have multiple phases or tiers like pre ICO, ICO, and ICO bonus phase. Each of these tiers can happen at different points in time and behave a little differently. They can also have white lists to restrict which investors can participate in the ICO. They can also have a reserved amount of tokens that aren’t sold in the crowdsale, and these reserved amount of tokens are usually set aside for founders and advisors. This reserved amount can be a fixed amount of tokens a percentage.
Whenever a crowdsale has reached its goal, it can be finalized by an administrator where all of the reserve tokens will get distributed to the appropriate accounts, and the company will have all of the capital that they have raised for their business. Once this is over, you know the crowdsale is finalized and no one can purchase tokens any longer. It will officially be over.
There are many blockchain companies that facilitate the tokenization of assets of enterprises, big and small, and manage the process of listing their native digital coins on leading currency exchanges. Names such as Coin Factory, Coral and HashCash are a few prominent ones in this regard, with HashCash being one of the global leaders in producing white label cryptocurrency exchanges – the platforms required to list and trade tokenized services on.