Crypto Crowdfunding platforms for startups to pursue their business idea
Kickstart your business with the crypto funding platform by generating capital real quick.
Cryptocurrency is widely becoming prevalent all over the world right now. The entrepreneurs who were talking about investing in stocks are planning to invest in cryptocurrencies. They are dialing their crypto business consultant and asking which coins to invest at this time. But most of them think that investing in cryptocurrencies is very complex and needs more amount of money. But the fact is you can start any business by generating capital from the crypto platform too. Amazing right? But that is true. You can collect the capital for your desired business through the process called “Crypto- crowdfunding”.
Many of us would have come across crowdfunding. But what is crypto crowdfunding?
Crypto crowdfunding is the process of crowdfunding from potential investors who are trading in the crypto market through a certain valuable process. Crowdfunding in the crypto field differs based on the platform that you choose to generate the capital from. There are certain crowdfunding platforms in the crypto industry where any startups can generate their required capital and fulfill their business idea. The most prominent ones are
These three platforms have revolutionized the entire crypto industry and had lead to the rise of new tokens into the market. After the success of the Ethereum token, this crypto-based crowdfunding emerged as a successful initiative for business and tokens.
In this blog, we can get to know about these four crypto crowdfunding platforms and their significance for the startups.
This is the initiation of the finances that lead to the trust of raising funds without any central regulations. Blockchain crowdfunding started its phase with ICO. ICO is similar to the Initial Public Offering (IPO) that we know in stock trading. ICO is the initial investment of the public over a particular token. The token is purchased by the public in exchange for cryptocurrencies. This kind of tokenization process evolved in early 2013, but it gets officially launched in 2017. From that point, cryptocurrency-based crowdfunding started gaining traction. Within a few months, almost 860+ projects evolved with the total crowdfunding capital of 6.2 billion dollars.
There are certain benefits in investing or initiating a token in the ICO for your business strategy:
- ICO is easy to start. There is no need for paperwork or any other regulatory principles when it comes to starting an ICO. anyone who has prior knowledge of cryptocurrencies and creating a trusted whitepaper can initiate an ICO token. The whitepaper is the preface of any ICO token which can manage to push the financial flow of that particular token.
- If you see, Ethereum tokens are out of reach now. But when they are initiated as a token for crowdfunding, they have a minimal price. So, from this, we can know that tokens are at a low price when they are at the investment stage. So, it is best to invest in tokens during crowdfunding. Who knows, it can emerge as one of the successful tokens in the entire crypto market one day.
- No need for any regulations or legal hassles if you invest in ICO token. You are free to initiate any token and gather funds. But to be on the trusted side, make sure that your tokens are getting listed in the crypto market. Any token without any listing will be considered a scam. Because investors cannot invest further with it.
Rest assured, ICO is one of the efficient ways to do cryptocurrency-based crowdfunding. There are talks that ICO’s are all scams due to lack of complete regulation even from the exchanges side. But to be specific, not all ICO are scams. Most of them are legit. The second most popular cryptocurrency — Ethereum started its journey as ICO.
IEO came to the rescue as the next level of crowdfunding with certain updations that the ICO had missed.
IEO ( Initial Exchange Offering):
What if the crypto crowdfunding is done by the Exchange platforms? That is true. With its variable trust and efficiency of the ICO, the IEO took the reign stick of the crypto-based crowdfunding. The entire process of analyzing the whitepaper to approving the company for the crypto crowdfunding is done by the crypto exchange companies.
There is no need to worry about the investments that the investor has made as the exchange companies will take care of all of it. Guarded by the Blockchain security, all the investment based transactions to the particular startups will be stored in the ledger and hashed in the separate blockchain. So, there are minimal chances that the particular supplier of tokens will deceive the investor. Also, with minimum listing fees, the exchange companies themselves can list the tokens in the listing pair so that the tokens can be actively generated in the trading arena.
STO is an upgrade to the ICO with enhanced features and updates on regulation and conduction principles. As some of the ICO’s have become scams because of its undefined liberty, many entrepreneurs have become afraid to invest in these ICO’s. Because they are not ready to lose their money for those ICO’s that are scams. So, there came the STO with upgradation.
But what’s the specialty in STO’s?
It is because of the features, the STO’s are considered a priority for the investors to invest in the tokens.
- They are strictly regulated and managed. Yes, unlike ICO’s you cannot create your token and sell it in the crypto market. It needs certain eligibility conditions. These conditions apply for both investors and the seller of the tokens. They are regulated and managed for proper selling of tokens and the whitepaper should contain proper required details.
- They are programmable — STO’s are programmable based on the business requirements and the regulations. Also, if you want to induct certain principles into the whitepaper you can certainly do where it can automatically apply.
- Liquidity — This is not general security that can work only from 9 to 5 on weekdays. It is a token that is working online where investors can invest it and trade on it at any time. So, this token is more liquid compared to regular tokens or securities.
- Ownership on a fraction — With STO, you can own a property on a fractional basis. That means with a security token you can own even a fraction of the property and buy another fraction of the property through another security token. You need not put all your funds into one property when it comes to security tokens.
- Traceable and compliance-based — As the STO’s are programmable, they are completely traceable and compliance managed.
Apart from this three crypto-based crowdfunding, another emerging crowdfunding option is the usage of decentralized applications. As Defi usage is at the peak, DApps is also gaining momentum. As it is slowly gaining phase, the above-discussed crypto platforms will be the best options as of now for any startups who want to generate capital and start their own business. So, if you are a budding entrepreneur, why waiting, just get into your business using the methodology of crypto crowdfunding.